The massive underground industry that is 'gold farming' in China – in which virtual in-game currency and items are obtained by Chinese MMO players and sold for real-world currency to western gamers – is looking like it is set to be banned.

The news follows reports that the Chinese Government is cracking down on internet porn – which has caused concern amongst western commentators about the limitations of 'online freedom' in China.

Information Week reports that the Chinese Government is now cracking down on the trading in virtual currency – a largely unregulated and underground industry which employs hundreds of thousands of Chinese workers and generates between $200 million and $1 billion a year.

Virtual gold rush

That report also quotes from a University of Manchester survey in which researcher Richard Heeks showed that between 80 per cent and 85 per cent of gold farmers worldwide are based in China.

"...many online games have a virtual economy and an in-game currency," said Heeks' report. "Gold farmers can play in-game to make some currency. They then sell that for real money - typically via a website and using the PayPal payment system - to other players of the game."

Both China's Ministry of Culture and Ministry of Commerce is very clear that "virtual currency" includes "prepaid cards of cyber-games," according to a government press release issued by on Friday.

Of course, the real question is how can the Chinese Government effectively police and enforce such a 'ban' on an industry that is almost totally underground?

Blizzard and other major MMO developers actively forbid - or, at the very least, discourage - 'gold farming' amongst their customers, but where there's a will…

Via Informationweek.com