Play Money, Virtual Worlds and Ludocapitalism

Don't run away just cause you saw the word "capitalism" in the blog post title. This post is about gold farming in online games like World of Warcraft, Ultima Online, Second Life, etc. I recently read this book called Play Money by Julian Dibbell and went to a lecture he had at NYU. Dibbell has an interesting story to tell: he was a gold farmer who made made thousands selling virtual gold and items on eBay. If he had gold farmed full-time and quit his writing job, he would have made more than enough money to support himself and his family; all while working at home playing games.

Below is a response paper I just finished writing for my "Hacker Culture and Politics" course relating to Dibbell's book, ludocapitalism (don't worry, I explain it), and the pleasures of work as play. It's definitely academic, but you should enjoy it.
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Julian Dibbell’s brief venture to gold farming in virtual worlds may have caused him to discover what may be the driving force of capitalist economies in the 21st century: Play. Ludocapitalism, as Dibbell puts it, is a belief that looks at the labor experience as a game and it could drive economies both virtual and real. This concept works because some theorists, as writer Martha C. Nussbaum highlights, believe that play and pleasures are the never-ending goals of human existence.


By the second half of Dibbell’s book, Play Money, Dibbell is deep into adventuring in Ultima Online (UO), a massively multiplayer online role-playing game (MMORPG), and he is raking hundreds of dollars each week buying and selling virtual goods. Instead of killing enemies and participating in traditional quests, Dibbell has decided to play game within the game world of UO, becoming a trader who sells items and gold within the game and on auctioning sites like eBay.

The goal of the Play Money project was to make more money gold farming than Dibbell has even made in a year as writer. Though he just barely failed in that goal in the end, Dibbell does admit that selling virtual goods is a viable form of living; “a $47,000 income wouldn’t have topped my best year writing, no—but on the other hand, to be honest, it would have topped all the other years” (Dibbell, 292). Since gold farming is productive then, virtual world trading is one of the first steps in actively pursuing a ludocapitalist economy.

At the lecture Dibbell gave at NYU, Dibbell makes a strong argument as to how work as play can be productive, and fun. Dibbell said that he visited a “Chinese gold farming sweatshop” in which tens of workers played World of Warcraft (WoW, another MMORPG) for 12 hours a day, seven days a week as their regular job. Despite constantly doing the same tasks over and over again, even when these workers received their break, they played their personal accounts on World of Warcraft and discussed how they could improve on their characters. The physical social environment of the sweatshop still made the game fun—despite the tedious tasks—since they were playing a game.


While working, many of these gold farmers stare at trading markets all day, buying low and selling high. Some of them run around in virtual cave, mining ore and creating swords with some simple keystrokes and clicks. The monotony seems similar to that of a cubicle job, checking for typos on documents and creating cover sheets for business plans. Yet, online players feel a sense of pleasure in their work; why is this?

One answer may be because games like World of Warcraft are encouraging in their nature. When you successfully mine, you may get a message saying your mining skill increased, which is rewarding and self-encouraging. The game is constantly telling you how you are improving, while most desk jobs do not. The social environment is also satisfying. Julian Dibbell made tons of friends in his UO community, from Bob to Rich and the 17-year-old Radny. He didn’t even want to be social but the game and his trading business pushed him in that direction and he seemed to enjoy the interaction throughout his book.

Since the game (and the in-game community) in constantly being supportive, there is a sense of pleasure and satisfaction even when doing work. Ludocapitalism then, works even from a production perspective. “The goal of right action is to maximize pleasure, understood as a sensation. That is the only good thing there is in the world” (Nussbaum). The bonus with gold farming is that the maximization of pleasure is also useful to the economy.

However, the birth of virtual world economies raises some troublesome questions. Since gold can be exchanged for physical dollars, virtual gold has become its own currency. And since every item in virtual world games then have a real cost, do online game players have to report their earnings to the IRS, even for something as simple as skinning in-game leather and selling it? If I were to find a rare sword and sell it, either in-game or on eBay, should I be taxed by the IRS for my trade?


As of now, the IRS is reluctant to get involved in taxing virtual worlds since they don’t know exactly how to handle it. It would be difficult for game companies to release a quarterly report of all barters within their game and then expect its players, which may include 4-year olds, to be taxed. However, what is stopping companies from converting all their assets into Linden (the currency in Second Life, another online virtual world) and then avoiding taxation on their company? The SEC, IRS and the game companies are all going to affect how virtual loot is treated from a socio-economic standpoint and if taken care of correctly, ludocapitalism can become a breakthrough for economic theory.
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I also wrote an entry in Will's blog about gold-farming about how one study suggests that gold farming could be used to help provoke development in third-world countries. You can check that out if you want to add another layer to the discussion of virtual world trading for real economic gain.

If you have any interest in virtual worlds or online games I highly suggest reading Play Money. It's a super-quick read, very informative, and it's genuinely hilarious. That's saying a lot also, since people who know me know I don't like reading. However, I do have questions for you, if you've read this far. Do you think ludocapitalism can work as an economic model? Can games be a viable future for production?