Enormous container ships, endless strings of boxcars, 18-wheeler tractor-trailers blowing past you on the highway as you struggle to get your iPod hooked into your car stereo. That’s the import-export business as the world has thought of it for decades. “Made in China” are the words U.S. Treasury Secretary John Snow fears most, because to him they spell cheap imports flooding our markets and driving down the prices U.S. manufacturers can get for their own goods.

One of the things that has kept China’s products cheaper than many of those made in Europe or America are the lower labor costs in the enormous Asian country, with its population of 1.3 billion souls. Many Western consumers are happy to sacrifice a small amount of quality in return for a large monetary savings. And more and more Chinese products are on a par with those of the West these days in any case, meaning there’s no sacrifice for the consumer at all.

As gamers know, cheap labor costs – not just in China but anywhere in the world – can have an impact on their online lives as well. Everyone has heard tales of Chinese gold farmers who while away the hours monopolizing spawn sites in World of Warcraft, while honest adventurers are forced to look elsewhere for their experience points.

Just looking at a gold farmer in World of Warcraft or a macro-miner in EVE won’t give you the first clue as to their typist’s real-world whereabouts, of course. But enough evidence has surfaced in recent months to make it clear that the employment of gamers in low-income countries as virtual laborers in the service of a larger organization is a very real phenomenon. No container ships here. All you need is a fast Internet connection in Shanghai or Seoul and you’re free to import all the WoW gold pieces you like, pay your workers a pittance and then re-export them via eBay or IGE.com at a tidy profit.

The problem most gamers have with such schemes is that gold farmers, whether they’re located in Boston or Beijing, aren’t really playing the game. World of Warcraft is meant to be filled with avatars all intent on more or less the same thing: seeing the world, gaining experience, besting mobs and crossing swords when the opportunity arises. The only laborers on your server are meant to be NPCs, and if those get in the way you are welcome to kill them. Well, most of them.

But playing the game can mean different things to different people. Rodney the Wrathful may be hoping for renown as the most vicious player killer in the land, but Luke SkyMerchant might want to build an interstellar ship manufacturing empire without ever firing a shot. Both would be valid roleplaying choices in any number of virtual worlds. If your favorite asteroid belt has been mined out, it doesn’t mean a macro-miner was there; maybe it was just Luke and his employees, gathering minerals for their next batch of Minmatar Stilettos.

The difference between work and play in virtual worlds gets more subtle when you consider the significant earning potential that such online environments already possess. In Second Life, for instance, more than one player earns something like $100,000 a year from their activities in the world, according to Philip Rosedale, founder and CEO of Linden Lab, the company that runs Second Life. An avatar named Anshe Chung, one of Second Life‘s biggest real estate moguls, is famous on the Grid both for the reach of her virtual business and the real world earnings it generates.

Is Anshe working or playing, then? Linden Lab takes pains to point out that Second Life is not a game, but the virtual real estate business – where you can turn your holdings from barren desert into attractive, affordable suburb in a few short hours – has got to be more fun than its real world counterpart, especially if you’re someone who likes to spend time in cyberspace. The fact that what many would call a game world can support more than one six-figure earner is an important watershed in the development of such online realms. But what does it tell us about the future of virtual worlds, and the economic potential they may or may not hold?

Right now, it takes considerable effort to earn a real-world living in a virtual world. One 20-something gamer I recently spoke with said he earned about $25,000 a year in the three-and-a-half years in which trading Ultima Online artifacts was his only source of income. “I wasn’t getting rich, but I wouldn’t even call it work,” he said. “It doesn’t get any better than getting paid to play games.”

But getting paid $25,000 a year to play Ultima Online is not, in the end, much of a living. (The gamer in question now earns more as a dog walker.) It’s possible to do a lot better for yourself, but not without leaving the realm of play and getting deep in the world of work fairly quickly.

That’s what Rich Thurman found during the two years in which he made more than $50,000 a year in the same game. Thurman’s operation had no element of play to it at all. Instead, it involved a network of 30 highly complex bots – characters controlled completely via macro scripts and add-ons like EasyUO – run from 20 computers in Thurman’s house in Dallas and 10 more in a friend’s garage in Phoenix, Arizona. So extensively programmed was his “staff” that each bot would stop once it had made 250,000 gold, summon another bot that Thurman had programmed as his gold collector, hand over the loot and then go back to what it had been doing before. Once he got it down to a science, each of Thurman’s bots was earning more than half a million gold pieces an hour. At prices of $15 per million gold pieces, Thurman’s operation at times netted him more than $20,000 a month.

But it also took a lot of Thurman’s time: Programming bots, dodging GMs, keeping accounts current, siphoning gold off to eBay and negotiating with angry players and other gold farmers became a more than full-time job. In the end, Thurman told me, “It’s just not where I want to spend my time.” Thurman took six months off in which a third daughter was born, he moved to a new city and he switched jobs, and he never went back to UO. “I realized that I was missing out,” he said.

Besides missing his family, Thurman wasn’t having any fun – and it’s fun that is the main export product of just about every virtual world.

Economic analyses often view virtual worlds through a set of blinders that discount anything but traditional economic motives – that is, the theory that the people involved in an economy are always trying to maximize various types of personal gain. The problem with this theory as it’s been applied is that it’s singularly incapable of measuring many types of gain. It easily explains why people compare price versus quality before they buy, but it’s not as good at explaining why you might blow a hundred dollars on a nice drawing by a local artist, say, even though you know he’s never going to be the next Andy Warhol. It’s also not very good at explaining why people spend money to have fun.

One of the staunchest defenders of virtual world fun is economist Edward Castronova of the University of Indiana, who specializes in the study of virtual economics. When you buy his forthcoming book, Synthetic Worlds: The Business and Culture of Online Games (which you will do if you’re more than casually interested in MMOGs, since it’s an important piece of work), you’ll be able to read about just how important Castronova thinks it is that we preserve entertainment in game worlds – and I agree with him. But economics may not be the best measure of what’s fun in a game. By the same token, and more importantly for the future of the virtual import-export business, non-game worlds like Second Life may need to find a different economic model than the game world paradigm they currently operate on.

Castronova’s view of virtual worlds is, not unexpectedly, deeply that of an economist. Few of the elements of virtual worlds have value – whether in terms of economics or of fun – except in relation to something else. That’s all well and good; economics, as Castronova reminds us, is the study of choice under conditions of scarcity. Without two or more things to choose between, there’s not much for economics to grab onto.

But Castronova’s analysis leads him into some surprisingly dark corners. At several points in the book, for instance, he posits a scenario in which a virtual existence could become more fulfilling and attractive than any that the physical world can provide. Some might maintain that this is already the case: most hardcore MMOG-heads would no doubt rather spend their time hacking orcs than slinging hash. And if they can earn a living while they’re doing it, so much the better.

That’s a chilling vision of the future, if you ask me. The physical world will always offer things the virtual world will never be able to; at a minimum these include food, air, water and shelter. Now imagine an existence in which that’s more or less all you get out of the real world, and most of your deeper satisfactions come from cyberspace. That’s a picture of a desperately impoverished physical world. It probably won’t come to pass, but it’s worth keeping in mind. There is always the danger that we will eventually move too far into virtual worlds. If we turn our backs on the real world, it can only hasten the arrival of a scenario like the one Castronova imagines.

In the near term, of course, there’s little danger. In fact, game worlds will probably never provide the conditions in which even making a living is more fun in cyberspace than in meatspace. For a small fraction of gamers, this may be possible. But for game worlds to provide even a subsistence wage for a large number of people at once, they would have to steer themselves away from an economy of fun and toward one that more closely resembles the real world economy that we’re contemplating getting away from in the first place. Game worlds would have to become work – at which point people would start looking for their fun somewhere else.

For some, game worlds are already work. Back to China, where one gold-farm worker profiled in a recent article earns $150 a month for overseeing a macro bot in Lineage II. Not a lot of money by Western standards, but according to World Bank figures, it’s about 60 percent more than the average monthly wage in China, equivalent to a worker in the U.S. earning almost $4,300 a month instead of the national average of just over $2,675. Is he having fun? I don’t think so. According to the article, he puts in 12-hour days during which the most creative activity he gets up to is dodging GMs and angry players.

Fun and profitability are not necessarily mutually exclusive. But the real world hasn’t yet found an equilibirum point at which most people love the things that earn them money. Game worlds may offer a larger set of narratives than you can find in the real world, but they support only a smaller set of real activities. There’s no reason to think that game worlds will be able to solve the work satisfaction problem anytime soon, if at all.

Game worlds will never really be fit places to hold a job. But far more potential lies in non-game online worlds like Second Life. Even here, though, we’ve only just begun to scratch the surface. Stories of virtual land barons earning six-figure incomes may raise eyebrows among non-gamers and even get gamers scratching their chins, but from a different point of view, such tales illustrate not how much potential there is in Second Life (the only VW that currently matters in this regard), but how poorly virtual worlds are living up to that potential.

Second Life is on the cutting edge in this regard. However, the fact is that business conditions there, as measured in real world terms, are not yet ready for prime time, for one simple reason: Though Linden Lab advertises Second Life as an online environment created by its residents, a place with unlimited possibility for business, fun and cultural and social exploration, the world runs less like an open experiment and more like a very traditional game-world. It is a world in which the company calls the shots according to a poorly defined set of guidelines, and residents are never really sure which side of the “law” they’re on.

For every Anshe Chung in Second Life, there is at least one other virtual entrepreneur who has found conditions on the Grid to be less than conducive to entrepreneurial success. After Linden Lab announced it would get into the virtual currency exchange business recently, the most popular Linden-dollar exchange service chose to close its doors rather than try to compete with what was essentially a monopoly. Even Anshe herself, one of the most successful businesspeople on the Grid, has had a number of complaints about inconsistent policy decisions being handed down by Linden Lab, and many similar cases have been reported by other residents.

To realize the potential of a place like Second Life, cyberspace will have to learn to differentiate between game-worlds and virtual environments. To keep game worlds fun, companies will probably have to keep a tight and fairly arbitrary rein on how they’re managed and make sure they retain enough authority to guide the world in the direction they want it to go. There’s a lot of latitude here, though, because there are a lot of different things people find fun. If you don’t like how one game world is run, there’s probably another that will satisfy you, or there will be soon.

To carve out a corner of cyberspace that’s truly a platform for experiments in business, culture, society and fun, though, non-game virtual worlds will have to let go of the reins just a bit and provide the kind of conditions under which these things flourish in the real world. Creating those conditions, though, involves a lot of hard work – as well as a measure of fun. Intense analysis and careful planning goes into hammering out and then maintaining real-world institutions like clear frameworks for rights and responsibilities, coherent and effective policing of whatever sort and a transparent judicial process. What the virtual analogs of these things will be remains to be seen, but they’re the kind of things that will be needed before a virtual environment can truly become a robust and productive place. If the company isn’t going to provide them, then it needs to step back even further and let residents hammer these things out on their own. At the moment, there isn’t a world in which that’s happening, not even Second Life.

Toward the end of Castronova’s book he warns against letting virtual worlds become online dystopias, and exhorts the builders and residents of such places to insure that they are integrated into our physical lives in a way that preserves our dignity and fulfills the potential of cyberspace. That’s good advice. I’d take it a step further, though, and remind both the residents and the creators of virtual worlds not to look for too much from such places. Virtual worlds should be an added attraction on top of what we get out of the real world. If the only reason you’re in a virtual world is that you can’t be bothered to make the real world a rewarding place, well, that’s no fun at all.

Mark Wallace is a journalist and editor residing in Brooklyn, New York, and at Walkering.com. He has written on gaming and other subjects for The New York Times, The New Yorker, Details and many other publications.

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