Chinese Limit Use of Virtual Currency

Very good post 4thvariety. Hadn't considered that reason.

ANet had to remove the Taiwanese region because its government refused to let Anet ban real money trading, which is completely ILLOGICAL, since you can't sell what you don't own.

RMT should be banned worldwide.

if i was anet i would make an addition to tolkano that lets you pay real money for the items if you dont have RP's, i would also add every weapon/armor skin in the game to him

it wouldn't wreck the game's economy because everything would be customized, and it would be free money in their pocket.

RMT involves paying for the service of collecting the item, not the item itself.

QUOTE: CNET NEWS, David Rosenberg:

China has unveiled the first official rule on the use of virtual currency in the trade of real goods and services to limit possible impact on the real financial system. The Chinese government also spelled out the definition of "virtual currency" for the first time, which includes prepaid cards of cybergames, according to a joint announcement from the Ministry of Culture and the Ministry of Commerce Friday. It said:


The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services.

The ban is primarily aimed at "gold farming," an Internet-age phenomenon in which players in less developed countries collect and sell virtual gold (common to games like World of Warcraft) to wealthier gamers in the developed world. This enables gamers who have the means to buy virtual gold to get ahead in the games without actually having to accomplish the grunt work.

The trading of virtual currency for real cash generates between $200 million and $1 billion annually, according to a 2008 survey conducted by Richard Heeks at the University of Manchester.

The average user will only partially care about this ban. They might be disappointed that they can't buy their way to higher status, but I assume that Tencent and other popular sites will figure out a way to do in-game trades and that eventually the farmers will figure out how to bypass the restrictions.

The ban may scare off smaller shops, but the sophisticated organizations will continue on the same path. It reminds me of Japanese pachinko parlors where you can only win tokens (wink, wink) that you take next door for actual cash.

While I'm not convinced that gold farming is good or bad, there is a very persuasive argument that it's driving economic development in China, and that anything that perpetuates economic stimulus is a good thing.

You don't own that, either. And the 'service of collecting the item' it's just a way around selling the item itself.

A RMT client character will not get 'getting the item', will get the item itself. 'Getting the item' will be done by the other character, and what the seller sells is the item itself.

This has less to do with WoW gold, and more to do with "QQ coins" which was growing at a faster exchange rate than the yen. (70%!)

http://online.wsj.com/public/article..._20080329.html

Money quote:

"Then last year something happened that Tencent hadn't originally planned. Online game sites beyond Tencent started accepting QQ coins as payment. The coins appeal as a safer, more practical way to conduct small online purchases, because credit cards aren't yet commonplace in China.

At informal online currency marketplaces, thousands of users helped turn the QQ coins back into cash by selling them at a discount that varies based on the laws of supply and demand. Traders began jumping into the QQ coin market as an opportunity to make a quick yuan off of currency speculation.

State-run media reported that some online shoppers began using QQ coins to buy real-world items such as CDs and makeup. So-called QQ Girls started accepting the coins as payment for intimate private chats online. Gamblers caught wind, too, and started using the currency to get around China's anti-gambling laws, converting wins in online mahjong and card games back into cash. Dozens of third-party trading posts sprouted up to ease transactions, turning the QQ coin into a kind of parallel currency."

*Checks Atlas*
Meh.
I'm fine.

What about the guys who draw fanart for ingame money? Thats sort of trading ingame money for real-world services.

No real MONEY involved though... and you can alwasy say......
1 Hey dude nice art you have there..

2 yeah i know you want it?

1 Sure

2 Oh can i borrow measly 30k?

1 Sure

And the problem is Real money for in gam eitems correct?

Not imaginary moneys for some onse art -_-

But yeah i see where the confusion comes form

I have some "artwork" you may like...

it has a picture of Andrew Jackson on it.

Seriously, though, I really don't see China cracking down on goldsellers.

This law was in direct response to a threat to the Chinese yen. (QQ coins)

Until people start paying prostitutes with WoW gold, I think Chinese gold farmers will be fine.

Thank god... Will all the annoying gold selling start finally dying off? All the hacking too? You know this business doesn't only sell gold and make money but they steal accounts in the process to to gain even more money by riggin that to farm gold as well too...

It wont matter, China = simply too big to be controlled. If there is a way to make money, there will be people taking the risk. Sure, the chinese gov. can shut what? 50-60% of the gold farming off, but in the poorer, outer areas where the government isnt as efficient, they can't really do that much. Also, you can ban gold farming via large trading forums etc. but can you really ban gold selling and buying with much, much smaller groups selling gold in their city?

Good thing though, I hope rest of the world can follow the lead.

Isn't this site owned or funded by gold sellers anyway? Anytime its brought up the post/thread gets wiped

i remember reading somewhere online, if this is wrong then im sorry

Very interesting. To comment on how it will effect gold farmers in real life.

whether Inde's point is true or not is up for speculation, will the gold farmers be able to adapt, or will China successfully kill off a large portion of the industry.

If we are to assume that China is successful and does wipe out gold traders then there is a possibility that thousands of people will lose their jobs as gold traders.

Yet we have all heard the negative aspects of gold farmers. You rule out the purely economic benefit an individual or a country can gain from gold farmers and you encounter many negative ones, mostly that revolve around the individual themselves.

I do not have a link to the documentary but it demonstrated how kids in china were being enticed to be gold farmers because they were getting paid to play video games. These kids often times dropped out of school and worked in sweetshop like conditions making very little money for themselves. And while they DID have employment, these kids were stuck at what we would call a dead end job. The government in China also felt that despite providing jobs and some income for the state, (though taxes like in Australia) it was creating more harm then good.
Some of these kids could and should have gone on to more successful professions, allowing them to make more money and thus have a higher taxable income.

While I am sure if the gold farming industry is wiped out not all the people who gold farm will move on to better things. But if only a few don't get stuck in that industry and go on to make something of themselves I would consider that a victory.

So I guess what I am trying to say is yes Inde is right in that people may lose there jobs but I would add to that it may not be a bad thing even in this economy.

Hooray less gold seller spammers.

Thats sort of like selling a writing pen for 2,000 dollars and giving away a free guildwars account with 1,000 ecto's in it. My cousin used to sell EQ accounts like that.

I for one hope this filters out the spam and unfair advantages of cash shop games (money>skill) although it probably won't.

Interesting comments from the playnoevil post, highlighting a different target (gambling):

http://playnoevil.com/serendipity/in...y-Instead.html

As someone already said, "enforcement" in China is a very different beast from how it's done in Western countries, when it's done ofc.

I wonder whether this move, if generalised over the planet, could mean MMOs getting closer to Second Life's business model. But I doubt many MMOs could survive the move financially and F2P could die too.

Personally, I don't think the Chinese government gives a shat about protecting kids in front of computers not getting an education, or Gaming companies losing revenue to gold farmers, or the fairness of buying ingame stuff with real world money. The real issue to them is the proliferation of a virtual currency and its growing real world impact on the economy. Its all about control and regulation and by outlawing the conversion of virtual currency with real world currency they hope to stem the impact.

This being my point of view, I do not think the Chinese will be craking down on gold farmers that sell to gamers in the US, but rather the virtual currency in China used in gambling and other social sites.

Have to agree with this. For what its worth, I doubt the farmers are all going to just say GOLLY! I guess I can't do that any more.

I smell a strong lobby at work here. Why, on earth, would the Chinese government care about game farming that puts dollars into thier economy?



Personaly, I could care less about the gold farmers.

Seems like a dumb move China just made. They took out (for now at least) a bussiness that could have been making $1,000,000,000 a year. Its such a great time to be taking out bussiness that are going strong.

I dont give a hoot if someone wants to spend real life money on in-game gold its doesnt ruin my gameplay in anyway. Let them buy all the money they want. Its just to make their e-peen look bigger.

Also even if china follows up with the ban its only one of the countrys down, it may mean the biggest supplyer is out but thats good for other gold sellers because they can now skyrocket there price and make even more money. Its a great time to be a gold seller out of China! Might even make more money selling gold than being a Somalian pirate.

This is the real reason for the ban. The Chinese government is trying to stop parallel currencies from popping up inside the country. If they lose control of their currency monopoly, they lose control of the ability to collect taxes. Taxes are a huge issue in the country because it is a corrupt archaic communist government trying to keep control over a rapidly expanding capitalist society. Having been there many times, I can tell you the system of taxes is a joke. The economy is primarily cash based since credit cards and checks are virtually non existant. I have been there at paydays for a factory I visit and the 1200 workers line up and are passed handfuls of cash out of wheelbarrows. The Chinese governement cannot let "virtual currencies" start to be used inside of the country. The system of taxes now is impossible to enforce. No one I know there pays taxes. They are required to fill out a card each year stating how much they earned. It is easier and cheaper to put unemployed rather than state how much you really earned. The factory owner jokes with me how for the last 5 years he has not earned a profit (for tax purposes) and yet he is worth over 15 million U.S.A. dollars. Eventually that will change and the governement will be able to track what people earn more accurately, but if virtual currencies become commonplace, they have no hope of monitoring wages for taxes. This will have ZERO effect on MMO gold farming as that is not the aim of this law from what I can see. They have 250 million people along the coast employed in factories and several billion to the west living in third world conditions hoping to get a factory job. Right now to get a job in the "industrialized zones" you need a work permit which conveniently enough you buy from one of the corrupt communist government officials with cash. They are not going to kill off any jobs. They need a billion more factory jobs whether it is gold farming or sewing or furniture making. This is all about keeping control of the RMB currency and taxes. They do not want to put the gold farmers out of business. I suspect the governement would love it if the gold farming business doubled as long as they sellers use some form of payment that the governement can monitor and tax. (Oh, and as a side note, I completely agree with Inde when he said there is little difference between gold farmers and anet selling us stuff with microtransactions. Anet is just like the Chinese communist government in that they both want to have complete control over their businesses. The communists do not want parallel currencies cutting into their ability to control and tax the RMB. Anet does not want other companies cutting into their customer base and competing for our money selling us gold vs. whatever anet is micro'ing us. I can understand and agree with Anet's position and the Chinese governement, after all, it is all about money.)

4thVariety summed it up nicely: There will still be gold farmers in China. They will just get new (better) working conditions and STILL farm and sell money to Americans and Europeans. And the chinese government will profit from the extra taxes!

Besides that: It does not matter to the gold buyer if his gold comes from Malaysia, Taiwan, New Nazi Germany or Soviet Canuckistan.

It will not reduce the buyer potential and shady RMT deals at all.

Doubt this would affect Guild Wars very much at the high end since those are primarily funded by the remaining duped armbraces and people who have bought them wouldn't need to sell them. This would probably affect the middle to high end more likely, where the amount of plat needed to buy something would not translate to over 1000 usd.

My guess is that this will not be enforced at all. Most likely China just trying to look good. Let's face it, the USA isn't getting rid of tobacco because it makes a crap load of money for the country. China isn't going to get rid of something that makes a significant amount of money.

I hate China, but at least this is one good thing they're TRYING to do.

Interesting thought. Might explain some of the 3.5 million Aion subscriptions the first month.

All you gamers think this is about gold farming in games, do you really think China cares about gold farming services?

I'm seriously shocked the Chinese gov't made this decision. It would seem that they actually caved in to pressure from the major game devs, which are generally Western or Westernized (aka Korea, Japan) countries, which is something China generally abhors doing.

China almost always cares about itself (the Communist party) first, it's people second, and everything and everyone else last. By tacitly allowing gold farming (as in previous practice), it siphons off money from overseas into it's own economy, and keeps however many of it's own people employed. Employed people are happy people, and happy people don't demonstrate for reforms or liberalization (threats to the Communist party).

I don't see what's in it for the Chinese gov't to cut off this flow of overseas money, and either leave the gold farmers unemployed or driven underground. There's an important point missing, and I'm interested in what it is.

edit: just read Tramp's post. I think that may be the point I was missing. Thanks.

Inde, I work with a scholar of Chinese politics and have studied their politics. If you want to call the notion that you can infer future data patterns from historical patterns an assumption, fine. (There are those that argue this, eg: Taleb's Black Swan argument).

However, there aren't any unusual factors here that might suggest that the assumption is invalid in this case. Corruption is endemic in China's law enforcement system, and the government also engages in a lot of saber-rattling that it does not intend to expend the enforcement costs to back up.

It's reasonable to infer that the same pattern will apply in this case. This isn't a mission critical area such as propaganda where the government will turn its full attention to making its decree stick. (eg: censorship efforts)

Too late China, the ecto prices already dropped again.

Martin, I understand what you are saying but it does appear that yours was a wrong assumption as well. Once you see the speculation in this thread that this is being done to protect currency and prevent trading with other means of currency inside China. Which would mean that they are not going to allow this to continue with "protection money". This is much bigger then that. I'm not saying that any of your past or current experience is wrong, just that China clearly sees this as a bigger problem and is doing this for reasons that simple bribes or corruption within the ranks isn't going to be able to touch.

Fundamentally speaking, there is no transfer of ownership of any in-game items - all such items (and indeed, all game data, period) remain the sole property of Anet/NCsoft. You do not, and have never, owned your character, or any of the titles, items, and any other data associated with your character. In point of fact, you do not even own the game in any meaningful sense; rather, you are paying for the privilege of accessing GW servers to play the game.

It is clear, then, that there can be no actual sale of any in-game items, as a sale implies a transfer of ownership - plainly impossible in this case.

They can't. It's unstoppable. How will the Gov check the difference between a normal player and a gold farmer? They can't. Not even with the Great Firewall of China.

One thing I totally missed yesterday. Online gambling. Think of it, exchanging real money for online currency and later changing it back. If that does not fit the description of online Poker, I do not know what does.

Then I searched around and read closely. I found this quote:
Without the ruling, it would be possible to operate a Casino on Chinese soil without the government getting a cut. No country will allow that. At the same time corporations and casino operators would be able to act as if they were the Royal mint. No country will allow that either.

Goldfarming is different. In its basic form it takes real money and exchanges it for virtual goods. GW-Gold is not a real currency, but an online virtual good! There is no money transfer, only a transfer of virtual services. At best goldfarming is an outsorcing of virtual work. There is no incentive to stop that, since in turn it creates tax revenue. In contrast to online gambling which would again vanish money uncontrollably, especially in the WWW, especially across borders and the Chinese do not like that.

So I am sorry, but if people want goldfarming to go away, they have to talk to ArenaNet about rewards being rewards again, not items of trade, speculation, random drops and similar things.

Goldfarming in GW exists for the simple reason that the game supports it with many of its design decisions regarding rewards, item drop behavior, earning of money, and repetitive time based objectives.

I guess this law will crack up RMT business.Just like copyright law.Idont know how good does Chinese cop do.But I'm sure small gold farming company without good connection arn't going to survive now.

Doing illegal business in China have low risk.But when you got it coming you will take it hard.Without connection you will run into many pesky local authority till you can't do business anymore.And the law is a new window to take opportunity to do that.

So did CPP - EVE online has legalized RMT with their PLEXes.

And people are actually happy about it: If you have excessive ingame isk, you get to play for free as you can buy subscription for isk, if you lack isk, you can resell one month subscription.

It severely does on an MMORPG like WoW, where the "Combat zones" are shared by all players (not instanced like GW). The farmers are in the same spots soaking up all the good loot 24/7, and often interfere with getting basic quests done. I found it very irritating, to the point that it played a significant role in my abandonment of that game.

Bluesnews.com

Hmmm, it does indeed seem like some bad reporting that started the whole thing. Even the official announcement states: China bars use of virtual money for trading in real goods
http://english.mofcom.gov.cn/aarticl...606364208.html

It does not say it's banning the ability to use real money to buy virtual goods.

Inde - true, turns out it's not true.

http://www.escapistmagazine.com/news...ming-After-All

Visit Escapist more often.