Gamasutra recently received an article submission from a Chinese-headquartered gold-selling and power leveling company, USFine.com.
The piece was notable because it tried to present a history of the ever-controversial (and likely EULA-busting) third-party item-trading business, which has thrived through use of cheap labor in emerging markets.
So Gamasutra followed up with the writer, the Chinese-based 'Smith Sam', who appears to be one of the owners of USFine, and got a little background on the company he helps run. According to Sam, there are forty employees at the company, which offers power-leveling (having a third party level up your MMO character for you) and in-game gold in a pretty comprehensive set of games.
His company's Top 5 most popular games in terms of demand right now are World of Warcraft, Final Fantasy XI ,Runescape, Maplestory, and Lord of The Rings Online. But they offer services almost 15 types of game, including Vanguard, Sword Of The New World, Gaia Online, and even 2Moons.
Although power leveling is also a major part of USFine's business, and the subject of the essay below, Sam notes that gold and/or in-game currency tends to be the best market for them overall. Interestingly, Sam also comments that Google and Yahoo! search engine results are one of the chief methods of advertising his company's services - showing how much the major generic search engines have penetrated these types of niche, potentially infringing markets.
What follows are some edited and English-improved highlights from 'Smith Sam''s on the ground impressions of how this power leveling market has evolved.
Of course, with major companies like the VC-funded Live Gamer trying to officially enter this arena by partnering with publishers for secure item trading - if not power leveling - it'll be intriguing to see how this controversial and oft-maligned submarket evolves.
The State Of Power Leveling For MMOs
by Smith Sam
At present, most companies are engaged in power leveling (generally for World Of Warcraft) mainly in China and some countries in Southeast Asia. The primitive North America power-leveling companies changed their role gradually, or faced bankruptcy thanks to inexpensive labor in Asia.
Chinese-based game service companies offering World Of Warcraft power-leveling numbered less then 30 in 2004, but service companies will surpass 2000 soon, and this number is growing continuously. Looking over the entire Southeast Asian market, many of these companies are concentrated in the Philippines, Thailand, Vietnam, and other areas in India. North Korea is worth mentioning because the labor cost is currently the most inexpensive. [EDITOR'S NOTE: This is the first we've heard of North Koreans playing World Of Warcraft professionally - can anyone point to further evidence of this?]
Since power-leveling services for World Of Warcraft started, competition has certainly caused the price to curve down. Also, thanks to the WoW expansion, it's now changed to Levels 1-70 from its original Levels 1-60. Therefore, Levels 1-60 was originally 350 dollars when such services started, dropping to about 129 dollars in today's market. For Levels 1-70, it started costing about 490 US dollars, and has now dropped to 250 US dollars.
The variety of services now offered include specific quest completions and PVP power-leveling. For leveling itself, according to the average price, each level started costing around 6 US dollars, and has dropped to less then 2.5 US dollars. The reasons for this are as follows:
1. The power-leveling companies increased, bringing huge competitive pressure.
2. The skill of leveling is more and more demanding.
3. The large-scale company's monopoly on cheap prices causes other companies to have insufficient funds. To compete, those companies have to reduce prices to survival.
There are risks in the services provided because Blizzard continuously attacks power-levels and massively power-leveling account can get suspended and banned. However, inexpensive labor force costs and relatively high profits allows these companies to weather more risk.
As for us here at USFine.com, the company was established in August 2006. It was originally engaged in equipment resells, but when the WoW power-leveling market developed, its strategy for entering the market was to offer services "slightly lower price then the market value." In 2006, the average power-leveling price of Levels 1-60 stabilized at basically around 169 US dollars.
As a result, Usfine expanded quickly in early 2007. Usfine entered the second development phase by increasing the power-leveling service, and deliberately lowering the price for Levels 1-60 to 129 dollars - the lowest price on market; resulting in fierce price competitions from 2006 to the beginning of 2007. However, the company also encountered many problems regarding low risk control in this initial period. Therefore, some customer accounts got banned - but during 2007 Usfine has come a long ways regarding the risks involved.
Overall, the battle between leveling companies and game producers will be long-lasting. At present, there is no explicit legal rule to claim whether the service is allowed or not regarding - therefore, WoW power-leveling needs a long period to be completely mature. Everyone is waiting to see what happens.