PHOTO: Jeff Newton; Digital Illustration: Sandbox Studio

Richard Thurman is like a lot of 35-year-old guys. He's married. Has a couple kids. When he wants to blow off steam, he flops into his chair in front of his PC, and he fires up a computer game.

But Thurman is no ordinary player. In the weird and burgeoning virtual universe, he's a former outlaw. While earnest gaming geeks spend hours slaying dragons to earn booty playing Sony's EverQuest, Blizzard Entertainment's World of Warcraft, and other multiplayer online games, Thurman spent years using his coding chops to cut to the chase: rigging his computers to play games automatically and rake in gold. It took three months and 50 000 lines of code to pull off the feat. And it was all perfectly legal, at least in the real world.

In December 2003, however, when a person or persons unknown of the gaming underworld began threatening Thurman's real-world family, he unplugged his operation and took a programming job with a major corporation, which he'd prefer not to name. Now that he's out of his gaming business, he agreed to give IEEE Spectrum an inside look at his pioneering automated gold-farming system. The games today have changed, but the way a person profits from them remains very much the same.

Players and game makers despise the kind of hacking that was Thurman's specialty, because it makes their lives more difficult. That doesn't bother Thurman. “I'm a metagamer,” he says. “Game companies lay down their rules. Some play by them, and some don't.”

Thurman wasn't hacking for fun. In the new online economy, virtual cash, earned in games by killing a monster or performing a service, has real-world value, thanks to sites specializing in what are called real-money transactions (RMTs). People covet the jewel-encrusted super-sword in a game but can't spare the time to log the kind of hours they'd need to actually earn the virtual gold to buy it. So they obtain it the newfangled way: with their credit cards. In other words, they pay real money to buy virtual things.

Edward Castronova, an associate professor of telecommunications at Indiana University, in Bloomington, and author of Synthetic Worlds: The Business and Culture of Online Games (University of Chicago Press, 2005), puts the annual total market value for virtual assets between US $200 million and $1 billion. Although that may sound like small potatoes—the cellphone ringtone market is roughly $5 billion per year—the cheating is already wreaking havoc in the virtual worlds. In one episode a few years ago, cheaters unleashed fake currency into the world of EverQuest, one of the most popular online games, inflating its economy by 20 percent.

Gamers and game makers are feeling swindled. “It's criminal, in the context of a virtual world,” says Scott Hartsman, senior producer and creative director of EverQuest II at Sony Computer Entertainment America, in Foster City, Calif. “The entire reason societies have laws and mores is to protect people from getting hurt. By definition, people are getting hurt.”

There are odd and controversial real-world repercussions to the cheating. News accounts during the past year have described the rise of sweatshops in Asia, especially China, where low-paid workers play online games for 12 hours a day to amass virtual goods to be sold on the black market.

“This is evidence that there really isn't anything special about virtual worlds,” Castronova says. “We've been reading about globalization of labor markets, about software engineers in India taking jobs, and this is just another example of that phenomenon. Americans will spend money for online goods; wage rates are lower in Shanghai. The Internet allows [these transactions] to happen. It's the globalization of the labor market.”

Isn't this unauthorized activity illegal? Aside from possible violation of local labor laws, the answer is no. No real-world laws cover online gaming, so the players and makers instead rely on their own terms of agreement, which users accept when they install games on their home computers. The agreements basically state that everyone will play by the rules—and allow the delicate balances of make-believe worlds to survive. But none of it is legally binding anywhere in the world.

Thurman was one of the first geeks to take breaking the rules of virtual worlds to a new level by engineering the automation of gold farming. Many others followed his lead. Although no one knows for sure how many gold farmers there are, Thurman guesses as many as a million worldwide. Their shadowy world has become big enough to have its own published manifesto: Gary McGraw and Greg Hoglund's Exploiting Online Games (Addison-Wesley, 2007).