World Bank says online gaming industry is a boon to Asia economy

April 7, 2011

A World Bank study to be released Thursday reports that the online gaming industry has grown into a $3 billion business that provides living wages to migrant workers in Asia who play games all day, amass virtual currency and sell it to wealthy customers in the Western world for actual cash.

The report also highlights a new industry in which companies seeking to boost their brands’ popularity pay low-skilled workers abroad to become their Facebook fans or Twitter followers.

The study, “Knowledge Map of the Virtual Economy,” is the World Bank’s first in-depth look at the impact of online gaming and social media in the developing world. The report was produced by InfoDev, a donor-funded agency of the bank. Vili Lehdonvirta, a co-author, cautioned that the bank shouldn’t pour its money into the industry, because he said the dealmaking violates some of the game publishers’ terms of service and amounts to cheating.

Known as “gold farming,” the game-playing profession took off in the early 2000s with games such as World of Warcraft and has become a complex industry.

Low-educated laborers in Asia spend hours each day advancing through levels of an online game, picking up gold, swords and gems that enhance a player’s status. Then gaming studios, which employ the players, sell those virtual goods to online retailers. Finally, the retailers sell those items to more than 120 million players worldwide, many of them in North America and Europe, who are unwilling to play the games all day to gather the items on their own.

The bank’s report indicates that online gaming has a positive impact in Asia because 70 percent of the industry’s revenue remains in the gaming countries, with most of that money going to the gaming studios. Compared with the $70 billion coffee market — in which only a small fraction of the revenue remains in the bean-growing countries — gaming has a “much better development impact,” the report concludes.

The report also includes a survey of 26 players and studio managers that offers a rough, yet rare demographic look at their lives: Most of the players work out of studios in China, in Beijing or Changsha, the capital of Hunan province. They earn an average wage of $2.70 an hour, one dollar more than Beijing’s minimum wage for part-time factory work.

“The larger point is that online gaming is often viewed as exploitation. Certainly it’s not a dream career, but the players’ earning is not at sweatshop levels,” Lehdonvirta said.

The gaming studios keep about two-thirds of the industry’s $3 billion in revenue. “Previous studies presumed that the players sold the goods, but that’s not true,” Lehdonvirta said. “If you’re a rural online game player in China, you have no way of setting up a Web site and developing a customer database, and maintaining customer relations.”

The report also focused on a trend in which companies pay low-skilled workers in India, Bangladesh and the Philippines to “like” their Facebook fan pages or become a follower of that company on Twitter. The practice inflates a brand’s popularity.

Twitter regularly suspends accounts created only to follow others. Sean Garrett, a company spokesman, wrote in an e-mail: “We’ve seen numerous instances wherein the accounts that are bought are later suspended . . . leaving the company with few followers and no recourse.”

A Facebook spokesman declined to comment. The site’s policies allow companies to offer coupons, for instance, to users if they “like” a page via a Facebook ad.

Ian Shapira is a features writer on the local enterprise team and enjoys writing about people who have served in the military and intelligence communities. He joined the Post in 2000 and has covered education, criminal justice, technology, and art crime.
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