Sunday, April 6, 2008

Interview with a game economist and ex-RMT-manager: Jeff Lyndon on the history of gold farmers in China

A self-introduction email of Jeff Lyndon in the VERN mailing circulation caught our eyes and we thought doing an interview with him would be interesting. So we catch up with Jeff to talk about what he thinks of the RMT industry.

Hello, Jeff. Thank you for taking the time to do this interview. It will be quiet interest to know how selling virtual items and gold got started in the early days. Here are the questions.

Can you please introduce yourself to our readers?

My name is Ko Jeff Lyndon. I have over 7 years of game related experience. I have spend my first years working in Game Rooms (Cyber Cafes), 5 years on developing games and 1 years in developing the RMT business in Shanghai. I have been involved in more then 12 titles over 5 years. Namely: Shadowbane (MMORPG), Trackmania Sunrise, Marine Park Empire, Bad Day L.A. etc. This years I am the youngest nominated person of The 1st Hong Kong 1st person award - Digital Entertainment Sector. The award is supported by the HK government and various non-government organization.

You were one of the early people in the RMT industry, can you tell us when you first saw the gold farming activities and how you got involved.

Well that depends on how you define gold farming activities. I guess you are asking about massive gold farming activities. I first saw these activities at 2002 or 2003. Where a group of professional players will farm and hunt rare mob for living. But things didn't get too bad until the China crowd came in at mid or late 2003.

Before the China crowd things was still pretty much in control and balanced but when they appeared, basically every game was destroyed as most MMO's economic back then were not prepared for such abnormal game play behaviors.

Since I was a professional online game player in my days at Cyber Cafe and also my performance in Shadowbane. I was head hunted by a mainland Chinese investor to start up the RMT business for him at early 2004.

What was the demand side of the market like? Who were your customers? Any interesting customers?

The demand side was pretty big. As back then almost all MMO used the monthly subscription models and had an extreme tread mills effect. So basically everyone that wanted to play a MMO but didn't have 5 hours each day would be my customers.

There were quite a lot interesting customers. But personally I found two of them the most interesting. One was a customer back in my Cyber Cafe days. There was this one day I manage to get hold of a "Invisible Cloak" of Linage, and I yelled at the public channel just to show off a bit. Yet right away tons of players private messaged me for a price. I kept ignoring them since I was not sure how much should I sell it for. Yet after a while a player messaged me with approximately 4000 USD offer. I had never heard of anything that could sell that much so I decided to reply him and checked whether he was joking or serious. Which turned out he was serious and he was just 14 yrs old.

Another customer was in my RMT days. He was a 30 something guy who ran a business of his own. He played Lineage 2 with a group of friends and they were determined to be the best. However they didn't have the time to play the game so he hired my service. I had at least 3 farmers working for each of their accounts and they paid us 25,000 USD per month to upkeep our service.

How did gold and item selling become very much like an organized operation? I'm wondering if you could give an overview of the processes from farming the gold all the way to handling it to the customers.

Well there is a few reason why it becomes organized:

    • Ebay and MySuperSales showed that there was actual demand for the service.

    • As I was told by my farmer before IGE appearance in China, actually there are a few Korean trainer which came and trained some of the first few farmers in China. Who those Korean represent I have no clue.

    • At late 2003 or 04, the China government passed a law related to Cyber Cafes, where no Cafes are allow to operate after mid night. A lot of Cafes were out of business and owner were looking for a method to transform their properties to a new business. Since what Cyber Cafes have are "Computer", "Hardcore players" and "Space" they meet the requirement to transform it into RMT factory.

Well that is a huge topic and if you don't mind let me explain that may be on our next interview as I am very busy at the moment.

How were the relationships and competitions between gold farmers/sellers?

Basically, they fight a lot. Since farmers are under a strict gold generation requirement every day with a super high bonus incentive. So every farmer tries to make the most out of their shift. If that means they need to kill or affect any other person they will do it without thinking about it.

What are your thoughts on news reports about "chinese gold farmer sweatshops"?

It is true and what the news says are far from what I actually experienced. These sweat shop are very poorly managed in terms of hygiene, quality of living or food. The farmers meals are basically 1-2 RMB (0.12-0.0.2 USD) each. These meals are made out of the garbage collected from various dinning places in the city and re-cooked. Some materials might not even be a overnight but actually days or weeks old.

When I was in charge of my factories I tried to provide better meals and insisted not to provide my staff with that poor quality.

Many gamers have been annoyed about in-game spams from gold farmers. And that has given the industry a bad name. How did you get the attention of the customers back then? Do you think gold selling companies could stay in business without spamming the customers?

I am totally against the idea of spamming in game for a couple reasons.

  • It annoys customers and give us as sellers a bad name.

  • It puts our accounts in risk of being banned.

  • I hate it myself!

Personally I believe no business would be successful because of spamming. If your service is needed and you can do it professionally you will get the attentions needed. You don't need to annoy people to tell how great your service is. Had Google spam everyone when it first started?

What do you think are the motives for people buying virtual gold and items?

To answer this question you must first understand what makes people play online games. Of course everyone will say for entertainment. But let's face it you won't go disco dancing or karaoke for 6 hours or more everyday for a year right? There are something special in MMO where I don't see any other entertainment activities have that much. The sense of achievements.

The sense of achievements is what drives us to do almost everything. In MMO achievements are given out quite massively and fairly. Unlike most activities, special traits are needed ie, Karaoke, if you don't have a good voice, you are most likely never able to sing well. In MMO everyone is "balance" there are basically no handicap. If you are willing to spend that much time you are assured to receive your achievements.

What's more, MMO in nature are crowds. Achievement value increases by the number of people knowing. MMO then becomes the ideal platform for people who seek achievements.

So now to answer your question. If my theory is correct. The motives for people who buy virtual golds are people who want to have the achievements but are not willing or able to spend the time that is required for the achievement.

What do you think about the game operators' efforts and counter-measures deployed by companies like Blizzard to stop gold farmers?

Blizzard is for sure one of the best operator in the world in taking this matter professionally. But in order to really counter such activities one must understand the mindset of farmers, operational structure of RMT and a lot more. The best fix will not be banning accounts , deleting golds or officially selling gold, these are just putting out fires. The best fix will be the design and business implementations. Currently, I am working on a MMO title and I am trying to implement multiple ideas I have to reduce such activities to acceptable levels.

Also they have R&D teams too so they are not just in swarm but also equipped with knowledge. They hire economists and game designers to analyze your design and counter measure it.

What is your outlook for the future of RMT? What will we get to see in the next few years?

I think more and more games will be better equip with counter measure of such activities. Hence business will get tougher as it goes. However, based on my experience no matter how tough it is if there are still a dollar of profit to be made they will keep doing it.

Tell us a bit about what you do today and what your company is about.

Well basically my company White Hands Creations, provides Creative, Business and Outsource consultancy service related to the Digital Entertainment industry. We are keen on providing concepts, full project design documents, art styles, project direction, business support and various other services related to creative or the digital entertainment field. We are currently working on a Triple A MMO title's general economic and social structure, the game is targeted to launch sometime during 2008. I can be reach via enquiry[at]whitehandscreations[dot]com.

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