BY DAY, the prisoners toiled under the sun, breaking rocks and digging trenches in coal mines in north-east China.
By night, the jailbirds were reportedly forced into "gold farming" - playing online games to earn credits that their guards would later trade for real cash, reported British newspaper Guardian.
"Gold farming" is the practice of building up credits and online value through the monotonous repetition of basic tasks in online games such as World of Warcraft.
While the assets earned are virtual, they can be traded for real cash in a business beyond the control of the games' makers.
Millions of gamers around the world are willing to pay real money for such online credits.
A former prisoner at the Jixi labour camp in Heilongjiang province told the paper he reckoned the inmates' nightly "chores" slaying demons and casting spells were more lucrative than their daytime labours.
The 54-year-old, who wanted to be known by the pseudonym Liu Dali, was himself once a prison guard. He was then sent to the re-education-through-labour camp for three years in 2004 for "illegally petitioning" the central government in his hometown, he said.
He told the paper: "Prison bosses made more money forcing inmates to play games than they do forcing people to do manual labour.
"There were 300 prisoners forced to play games. We worked 12-hour shifts. I heard them say they could earn 5,000-6,000 yuan (S$950 to S$1,100) a day.
"We didn't see any of the money. The computers were never turned off."
Besides working in the mines, Liu said he also had to carve chopsticks and toothpicks out of planks of wood and assembled car seat covers that were then exported to South Korea and Japan.
Meet quota or be punished
But the night-time gaming work was no fun either, he said. The inmates were set quotas to achieve. Liu said: "If I couldn't complete my work quota, they (the guards) would punish me physically. "We kept playing until we could barely see things."
Trade in virtual currencies in multiplayer games has become so rampant in China that it is hard to regulate.
In April, Sichuan's provincial government launched a court case against a gamer who stole credits online worth about 3,000 yuan. Figures from the China Internet Centre show that nearly £1.2 billion (S$2.4 billion) of virtual currencies were traded in China in 2008.
It is estimated that 80 per cent of all "gold farmers" are in China, which is said to have the largest Internet population in the world. The country is believed to have about 100,000 full-time "gold farmers".
China's central government in 2009 made it illegal for businesses to trade in virtual money without licences. But Liu, who was released from prison before 2009, believes that prisoners are still being forced to earn online currency in multi-player games.
He said: "Many prisons across the north-east of China also forced inmates to play games."
Mr Jin Ge, a researcher from the University of California San Diego, has been documenting "gold farming" in China.
"These are not just problems for this industry but they are general social problems. The pay is better than what they would get for working in a factory."
This article was first published in The New Paper.