Virtual good

Virtual goods are non-physical objects purchased for use in online communities or online games.^[1] They have no intrinsic value and, by definition, are intangible.^[1]

Including digital gifts^[2][3] and digital clothing for avatars,^[4][5][6] virtual goods may be classified as services instead of goods,^{[citation needed]} and are usually sold by companies that operate social networks, community sites, or online games.^[7][1] Sales of virtual goods are sometimes referred to as microtransactions.^[8][9][10]

A large majority of recent sales have been in Asia.^[11]

Contents 1 History 1.1 Recent events 1.2 Most valuable virtual good 2 Illicit sale 3 Virtual goods purveyors 4 See also 5 References

[edit] History

The first virtual goods to be sold were items for use in MUDs. Players would sell virtual goods, such as swords, coins, potions, and avatars, to each other in the informal sector. While this practice is forbidden in most blockbuster online games, such as World of Warcraft^[12] and Everquest,^[13] many online games now derive revenue from the sale of virtual goods.^[14][8]

When Iron Realms Entertainment began auctioning items to players of its MUD, Achaea, Dreams of Divine Lands, in 1998, it became the first company to profit from the sale of virtual goods.^[15] But it wasn't until the mid-2000s with companies like the Korean Cyworld leading the way,^[16][17] that virtual good sales became instituted as a legitimate revenue-making scheme.

Virtual goods may continue to be a primarily Asian phenomenon, as between 2007-2010 70% of worldwide sales were made in this region.^[11]

In 2009, games played on social networks such as Facebook, games that primarily derive revenue from the sale of virtual goods, brought in 1 billion USD and that is expected to increase to 1.6 billion in 2010.^[18] Worldwide, 7.3 billion USD was made from virtual goods that same year.^[11]

[edit] Recent events

Estimates of the future market for these small items vary wildly depending upon who is making the prediction. 2013 sales will be 4 billion USD according to one analyst^[18] and a year later reach 14 billion according to a different analyst.^[11]

[edit] Most valuable virtual good

The Entropia Universe, an online game created by Swedish company Mindark, entered the Guinness World Records Book in both 2004 and 2008 for the most expensive virtual good ever sold,^[19] and in 2010 a virtual space station, a popular destination in this game, sold for $330,000.^[20]

[edit] Illicit sale

While many companies have embraced exchanging cash for virtual goods, the practice is forbidden in most blockbuster games,^[21] which derive income from subscription fees. This doesn't deter all players from saving playing time by illicitly buying in-game currency with real-world cash, violating their agreement with the game's operator in the process.

In an odd juxtaposition, the Chinese State outlawed the practice of buying real-world goods with virtual currency in 2009,^[22] something that had become popular in the some parts of this country.^[23]

[edit] Virtual goods purveyors

• Cellufun^[24]
• Cyworld^[17]
• Facebook^[2]
• Gaia online^[1]
• Habbo hotel^[1]
• Hi5^[5]
• Hotornot^[1]
• Nexon^[10]
• Ning^[14]
• Iron Realms Entertainment^[15]
• Little World Gifts^[25]
• Playdom^[26]
• Playfish^[6]
• Slide.com^[27]
• Sony Online Entertainment^[9]
• Tencent^[1]
• World of Warcraft^[8]
• Xbox Live Marketplace^[28]
• Zynga^[29]
• Flirtomatic^[30]

[edit] See also

• Walled garden (technology)

[edit] References

v · d · eMultiplayer video games Types Multiplayer online game · Massively multiplayer online games · Massively multiplayer online role-playing game · MUD History History of online games · History of massively multiplayer online games · Chronology of massively multiplayer online strategy video games Concepts Cooperative gameplay · Virtual economy (Virtual currency · Virtual good · Virtual tax) · Social interaction · Virtual world (Persistent world) See also Online game (Browser game · Persistent browser-based game) · Social network service