Game farms - a business model for exporting virtual weapons, selling online real estate or dealing with imaginary gold


Emerging economies like India and China have brought a lot of innovation, competition and new business models to the global economy. But so-called "online game farms" or "game factories" are certainly among the most exotic ones. And I am not talking about companies that make games ;-) Let me try to explain "game farms" by using my business model approach with the 9 building blocks...

Value Proposition: Gaming farms offer online computer game players of rich OECD countries a number of things to improve their position in an online game. This can range from "getting from level 1 of a game to level 40" over "the sales of online weapons" like swords and spells all the way to "the sales of online properties" like complete castels or dark forests.
Target Customers: Gamers of rich countries that don't have the time to play enough to advance quickly in a game or that are too bad got get anyware... However, they do have the money to buy virtual goods to improve their gaming position.

Distribution Channles: Some gaming farms like UCdao.com have set up websites to get hired for particular requests of rich gamers. Others sell their goods through online auction platforms like eBay.

Customer Relationship: Gamers with little time and fat purses usually get addicted to this easy entry to higher levels of online games.

Activities: Gaming, gaming, gaming. Game farms mostly rely on the cheap labor costs in China and hire gamers that will do nothing else than gaming, gaming, gaming to amass virtual goods like weapons, virtual gold and property. These are then swapped against hard currency from rich online gamers in OECD countries.

Core competencies: Kill the monster, grab the gold and memorize that deadly spell. It's all about attracting the best cheap and most deadly online mercenaries to your game farm in China.

Partnerships: Definetly not with the companies that produce the online games. Gaming farms are increasingly fought like hell by game producers (e.g. Sony entertainment) and even hardcore gamers.
Cost structure: An online game laborer cost between 75 and 250 USD in China depending on his skills.

Revenue model: Selling or auctioning off virtual castels at good locations, revealing deadly spells for currency and trading shiny virtual gold against green dollars. And as mentioned above, some can farms allow you to hire their gamers for specific gaming jobs.