Q&A/Essay: 'Smith Sam' Talks Gold Farming, Power Leveling
Over at Gamasutra a couple of weeks back, we got an interesting article submission from a Chinese-headquartered gold-selling and power leveling company, USFine.com. The piece was notable because it tried to present a history of the ever-controversial (and likely EULA-busting) third-party item-trading business, which has thrived through use of cheap labor in emerging markets.
So I followed up with the writer, the Chinese-based 'Smith Sam', who appears to be one of the owners of USFine, and got a little background on the company he helps run. According to Sam, there are forty employees at the company, which offers power-leveling (having a third party level up your MMO character for you) and in-game gold in a pretty comprehensive set of games.
His company's Top 5 most popular games in terms of demand right now are World of Warcraft, Final Fantasy XI ,Runescape, Maplestory, and Lord of The Rings Online. But they offer services for almost 15 types of game, including Vanguard, Sword Of The New World, Gaia Online, and even 2Moons.
Although power leveling is also a major part of USFine's business, and the subject of the essay below, Sam notes that gold and/or in-game currency tends to be the best market for them overall. Interestingly, Sam also comments that Google and Yahoo! search engine results are one of the chief methods of advertising his company's services - showing how much the major generic search engines have penetrated these types of niche, potentially infringing markets.
What follows are some edited highlights from 'Smith Sam''s on the ground impressions of how this power leveling market has evolved. Of course, with major companies like the VC-funded Live Gamer trying to officially muscle in on this market by partnering with publishers for secure item trading - if not power leveling, one suspects - it'll be intriguing to see how this controversial and oft-maligned submarket evolves.
The State Of Power Leveling For MMOs
by Smith Sam
At present, most companies are engaged in power leveling (generally for World Of Warcraft) mainly in China and some countries in Southeast Asia. The primitive North America power-leveling companies changed their role gradually, or faced bankruptcy thanks to inexpensive labor in Asia.
Chinese-based game service companies offering WoW power-leveling numbered less then 30 in 2004, but service companies will surpass 2000 soon, and this number is growing continuously. Looking over the entire Southeast Asian market, many of these companies are concentrated in the Philippines, Thailand, Vietnam, and other areas in India. North Korea is worth mentioning because the labor cost is currently the most inexpensive. [EDITOR'S NOTE: This is the first we've heard of North Koreans playing World Of Warcraft - can anyone point to further evidence of this?]
Since power-leveling services for World Of Warcraft started, competition has certainly caused the price to curve down. Also, thanks to the WoW expansion, it's now changed to Levels 1-70 from its original Levels 1-60. Therefore, Levels 1-60 was originally 350 dollars when such services started, dropping to about 129 dollars in today's market. For Levels 1-70, it started costing about 490 US dollars, and has now dropped to 250 US dollars.
The variety of services now offered include specific quest completions and PVP power-leveling. For leveling itself, according to the average price, each level started costing around 6 US dollars, and has dropped to less then 2.5 US dollars. The reasons for this are as follows:
1. The power-leveling companies increased, bringing huge competitive pressure.
2. The skill of leveling is more and more demanding.
3. The large-scale company's monopoly on cheap prices causes other companies to have insufficient funds. To compete, those companies have to reduce prices to survival.
There are risks in the services provided because Blizzard continuously attacks power-levels and massively power-leveling account can get suspended and banned. However, inexpensive labor force costs and relatively high profits allows these companies to weather more risk.
As for us here at USFine.com, the company was established in August 2006. It was originally engaged in equipment resells, but when the WoW power-leveling market developed, its strategy for entering the market was to offer services "slightly lower price then the market value." In 2006, the average power-leveling price of Levels 1-60 stabilized at basically around 169 US dollars.
As a result, Usfine expanded quickly in early 2007. Usfine entered the second development phase by increasing the power-leveling service, and deliberately lowering the price for Levels 1-60 to 129 dollars - the lowest price on market; resulting in fierce price competitions from 2006 to the beginning of 2007. However, the company also encountered many problems regarding low risk control in this initial period. Therefore, some customer accounts got banned - but during 2007 Usfine has come a long ways regarding the risks involved.
Overall, the battle between leveling companies and game producers will be long-lasting. At present, there is no explicit legal rule to claim whether the service is allowed or not regarding - therefore, WoW power-leveling needs a long period to be completely mature. Everyone is waiting to see what happens.
Comments
I blame capitalism. It takes a serious sort of brain damage to hold this fast to the idea that RMT is in any way shape or form legitimate.
Posted by: J. | December 26, 2007 11:42 AM
"Though its use of English was a little iffy, the piece was notable because ..." What? His written English is as good as yours. I dub thee a racist ass.
Posted by: Bullshatt | December 26, 2007 2:13 PM
Oh dear. No, this is the edited version of the essay, it wasn't anywhere near as intelligible before I changed it. I'll remove that part anyhow.
Posted by: simonc | December 26, 2007 2:23 PM
I suppose you should take that as a complement, Simon. :P
Posted by: jl | December 26, 2007 5:06 PM
Re: Bullshatt: his English was awful, what are YOU talking about? Anyone who thinks "The skill of leveling is more and more demanding." is an reason for prices to fall is writing in a language he doesn't think in.
Posted by: jffyt | December 27, 2007 7:19 AM
RE: North Korea. I went to DPRK (North Korea) in 2006 and visited as part of the tour one of their elite academic institutions. I poked my head into the computer class room and was amused to see the students at the back of the class playing a simplistic VGA-res Space Invaders clone involving George Bush's head (a bitmap used to denote the aliens). I kid not.
However my point is that even at this institution they did not appear to have computers sophisticated enough to run WoW.
It should also be pointed out also that homes in the DPRK do not have PCs and certainly dont have internet.
So, if North Korea was providing farming/leveling services, they would have to be state-sanctioned. And that would be a remarkable news story unto itself. Well worth chasing the guy to get corroborative evidence, Simon. You could easily spin this to the mass media...
Posted by: Gunjinman | December 28, 2007 2:02 AM
I seriously doubt this allegation regarding NK undercutting MMO farming. The first issue involves internet connectivity. As of this writing there is only one public Internet cafe, it is in Pyongyang.
The traffic is highly filtered/censored and only the politically connected are given access to the outside tubes (the one cafe uses a satellite as a backbone).
And I second Gunjinman's line of reasoning. Not only do individual households or universities not have state-of-the-art computers, but none of these people have internet access to the outside world.
[As a tangent, I currently live in Seoul and across the street there are 4 PC bangs alone, filled with kids playing MMOs.]
http://www.mises.org/story/2661
Posted by: Tim Swanson | December 29, 2007 8:44 PM
I would like to buy power leveling service,cuz i don't have much time to play . I had tried out lots of power leveling companies,such as THSALE, IGXE,powerleveling-wow.... Most of them were fucking cheaters ,they all used the bots to level your charaters,they got all of my accounts banned.But recently, I bought a service on www.igset.com It turns out good,just as they say on their website, a real guy would be leveling for you ,and they would only work for about 8-10 hours a day instead of 24 hours ,and the player was excellent,He trained my char jewelcrafting 1-375 within 6 days and only used me no more than 300G ,and it only costed me $99.99,he kept me informed and instead of saying he couldn't do something,he gave me a chance to assist him so that he could complete the order faster. That company is the best one i have ever met ! lol ! I would like to order 40000 honor point for my 70 warlock!
Posted by: Allen | January 10, 2008 12:32 AM
It IS possible that NK plays WoW for the gold farming. South Korea outsources to North Korea (In fact, when US and Japan outsource to SK for their animation, SK gets an even bigger profit from outsourcing THAT to NK).
However, to get them online just to farm would have to require a special arrangement from the DPRK leaders. It's only because of the internet laws in NK (Only Kim Jong Il and maybe a few more higher ups have full internet access- Margaret Thatcher has his email address) that I'm doubtful that's true.
The Party (DPRK) leaders love foreign moneymaking opportunities that involve foreign dollar and pull some unpredictable stuff just to get it. This is a real tough call.
Posted by: Armchair Politics | January 31, 2008 9:16 AM