Few things (other than the fact that Alliance sucks, consists of a majority of 12 year old boys pretending to be girls and playing female Night Elf rogues and hunters) divide the general public on Blizzard’s WoW more, than the practice of buying and selling gold on the Internet for in-game purposes. Some call it a heinous crime, some simply frown upon it, others see no harm in the practice, and few applaud the ability to make money of virtual goods.

But what’s really behind WoW Gold? Where does it come from, who buys it, and how does – if any – it impact our day to day gameplay in Azeroth?

Let’s begin with the people behind WoW Gold. Who’s farming it, who’s selling it, and who buys it?

Gold in the World of Warcraft is accumulated in a few distinct ways. It drops off humanoid, dragonkin, and undead monsters, it is received as quest rewards, and it can be made by selling items to vendors or on the Auction house. Unlike “real” economies, the amount of gold available to everyone in the game (or one server, for that matter) isn’t fixed. There’s no finite number of coins in circulation, rather every new spawn has a chance to increase the amount of currency available, while vendors, trainers, flight path masters, and such function as money sinks, gabbing currency and effectively destroying it.

Because of this, and due to the fact that even a fully destroyed, all epic, set of clothes rarely costs more than 12g to repair, a frugal player can, and will, increase the amount of money owned slowly but steadily. The trick to accumulate more money than on average is to spend little on items, transport, and repairs, while hitting places with easily to kill mobs whose chance of dropping something good and good (above 30s) amounts of money. In Winterspring alone, I can point out four areas with such mobs.

Another means of acquiring gold is by hitting places that show no competition, drop above average items and gold, and are – especially on PvP servers – non susceptible to interruption by player interaction. Those places are usually found inside instances, yet there are a few places outside, which qualify as well (Darkwhisper Gorge comes to mind).

The menial task of acquiring gold is usually performed by full-shift 24/7 characters whose gear is just good enough to do the deed, yet not expensive/good enough to cost a lot in repairs or to acquire. The common theme of “Chinese Gold Farmers”, while not absolutely correct (as much as it’s an incorrect statement to assume that every Chinese player is a Gold Farmer), describes the situation quite well. Paid often less than $3 an hour, these “Farmers” seek out above described places and attempt to accumulate as many items and gold as possible within their 9 to 12 hour shifts. To reduce downtime, Farmers are often visited by mule characters, which pick up and transport gold and items to the nearest big city. From there, a third character, often on a different account, posts wares on the AH, sells Greys and un-auctionable items, and announces services and goods in local trade channels. This char is the most public and therefore most likely to be banned. Most farmer “workshops” therefore ensure a separation between collectors and announcers.

Batches of Gold, often 10,000g or more, are then moved in-game to mules owned by Gold Sellers. The biggest gold selling provider in the USA is IGE, whose background we’ll investigate in a second. IGE and similar pay between $20 and $60 per 1000g, offering the same amount on their websites for $100 and more. To increase turn-around and revenue income, Gold Sellers also employ a number of techniques to ensure AH prices for easy-but-hassle-to-farm items stay high, anticipating demand (such as the items needed for the War Effort, the Dungeon 2 set, or class quests), and providing not only a higher income for posted items, but also a higher demand for purchased game currency by making some items simply unobtainable, financially.

As mentioned above, most of the gold sales in WoW, EQ2, and Lineage2 are funneled through IGE. IGE itself sells gold at discounted prices in large quantities to other sellers and holds a number of gold sales domains not visibly associated with IGE, so even gold sold by other entities may, very likely, fund IGE. Recently, in January 2006, IGE itself spun off into IGE, the Gold Seller, and RPG Holdings, which functions as a parent company to IGE, Thottbot, Allakhazam, OGaming, and others, making it possible for IGE to purchase and – indirectly – control fan sites without directly attaching the stigma of a gold seller to those assets.

Financially, IGE is very well off. Pre-WoW it purchased two competing gold selling operations, each for an undisclosed amount over $10 million. Its purchases of Thottbot, OGaming, and Allakhazam are rumored to be in a lower, yet still financially very profitable margin to its previous owners.

But who are IGE? Former dot.com fiends, avid Disney fans, and those of us who follow the news, will recognize the name Brock Pierce. A child actor, Pierce made technology headlines as one of the tree founders of DEN, the Digital Entertainment Network. DEN tanked something fierce, something not completely unrelated to the fact that, three days before its IPO, all three of the founders were accused of pedophilia. Pierce moved on to start, and tank, a Data Storage business, and following that, IGE.

So much for the outside. An “outstanding” company, controlling all but a few of the current main fansite targets, spending millions of dollars every month in acquisitions, marketing, and more, financed entirely by the farming and sale of a virtual good, gold.

After waiting in queue for about 34 minutes, let’s check the inside of WoW for signs of farmers. As mentioned previously, pure gold drops off mobs are by far not sufficient to cover the needs of our farmers in terms of daily gold turnaround. To accumulate the needed amounts, rare and otherwise precious items must be farmed and sold to individuals or in the Auction House. This would be an equally futile approach at fair market prices (about 300% above vendor prices). Gold can only be made quickly and in satisfying quantities if the market prices are controlled and artificially increased. To achieve this, farmers depend on the seller community, which – in turn – relies heavily upon two dynamics: control of the market and Auctioneer.

First, control of the market. It might sound hard, but in reality it isn’t. Some farmer groups enjoy the particular edge, illegal (as in “banned by the ToS”) tools give them, others simply use numerical advantages and a level of ruthlessness, to come ahead of regular gamers. To see an example of illegal “hacks” and tools used, I suggest a routine “/who Dire Maul” and to count the number of Hunters around level 48 inside the instance. DM is neither designed to be soloed, nor survivable by a level 48 Hunter in grey and white armor, so Gold Farmers use tools allowing them to teleport, use terrain advantages, and increase movement speed, while avoiding trash mobs and going right for bosses from a safe spot. One such boss is the Ogre King in Dire Maul, which can be soloed quite nicely after installing a program downloadable on the Internet.

Since such a run takes less than fifteen minutes, and Bizzard’s instance timer is conveniently set to allow four instance resets per hour, a farmer can emerge from DM after eight hours of work with enough money and goods to sell and Disenchant into shards, to make his or her quota of 2000g a day.

Secondly, control of AH and general prices. Complicit in this scheme is an unlikely offender – Auctioneer. This addon, loved by everyone who ever set foot into an Auction House in Azeroth, suggests prices based on previous sales. A good move by sellers is often to buy out all quantities of a known demanded item (such as, for example, Twilight Cultist Texts or Twilight Cultist Sets) and repost them at a slightly higher price. Users of Auctioneer, posting their drops, will adjust and attempt to only slightly underbid the gold seller’s price, elevating the overall price range for said goods up a notch or two. By doing this repeatedly, a price six to nine times the “healthy” median can be set and demanded.

It’s time for an example, I think. And I’ll make it quick and painless. Here’s how (given the infrastructure) to turn $200 into $2000 in a few days, no work needed.

Using the $200, purchase 10,000 gold from a farmer. Split the gold evenly into two stacks, selling one on the Internet at going prices, and using the other stack to manipulate the AH. The 5000g you are selling on the Internet should net you close to $500.

Assuming this tutorial happens four weeks before Patch 1.10. From playing on the Player Test Realms (PTR) and reading the forums, you know that Arcanite Bars and Delicate Arcanite Converters are needed to complete part of the Tier .5 (Dungeonset 2) quests. Using your 5,000g, you purchase all of the following from the AH: Thorium Bars, Arcane Crystals, Delicate Arcanite Converters, and Ironweb Spider Silk. You then repost those at a very slightly elevated price (about 10% more than you bought them for). In the coming days your mule will buy all offerings of such goods that fall beneath your current target price, reposting them at target or slightly above the current price. As Auctioneer prices are scanned and adapted, more players will offer their wares slightly (5%) below your price, and buying them is no longer as critical as in the beginning. Your goal, and this take some patience, is to slowly but steadily increase the overall price of all components needed to complete this quest.

Over time, others, non farmers, will follow suit and sell their wares at your price. You have reached your goal. Not only will your farmed and purchased items sell for a heck of a lot more, increasing the gold pool you have on your mules for sale on the Internet, others also demand these prices, making it more likely for buyers to cave in and purchase online gold.

But wait, there is more. As the enterprising gold seller, you purchase gold and sometimes items from gold farmers. Gold farmers are not only used to, but plan for capacity ahead of time in the event of, being kicked off the game. Why not abuse this a bit? Clearly not as attached to their toons as a regular player, your farmers only need a little financial incentive. Promise bonuses to those farmers who manage to artificially deplete the AH and common supply of a needed good. In our case, a $500 bonus to a farming group for squatting a mob drop, mines, or precious herbs would suffice.

If you were out in Winterspring, heading for that Rich Thorium Deposit, and someone blinked past you (likely a rogue or hunter), moving faster on foot than your Epic horse could take you, only to mine the mine and move on to the next one, you were the “victim” of such a bonus. A combination of minesweeper (a tool sold by a french company, which monitors server-client events and blinks its operator’s char to any Rich Thorium Mine that just popped up in the area) and teleport hacks made it possible.

There is no denying it. Such practices do harm a server’s economy. Artificially inflated AH prices, hacks used to squat mines or camp spawns, those are tangible damages done. But how about the intangible ones? Have you ever been attacked and instantly cut down by a rogue dual-wielding The Butcher and some Epic Dagger, wondering how a level 27 could afford the money or make it into Scarlet Monastery? The answer are gold farmers, both as a means to finance the purchase and as a way to get those drops into the AH. A carefully rafted balance between risk, effort, and reward is upset, making the best equipped players not those who spent time and effort, but those who spent $100 on eBay or with IGE.

Still think buying WoW gold isn’t as bad as some people make it out to be?