virtual goods

Virtual money (or in-game currency) is used to purchase virtual goods within a variety of online communities, which include social networking websites, virtual worlds and online gaming sites.

A key revenue driver within social media, virtual currencies are specific within each game and are used to purchase in-game goods. Characters or avatars in virtual worlds own things within the context of the virtual world and users will collect each games' virtual currency to purchase land, supplies and various items used to enhance their status and add points. Some virtual currencies are time-based, relying upon measurement of in-game achievements in order to accrue exchangeable points.

The first virtual goods to be sold were items for use in MUDs, early, graphical online multiplayer games on the PLATO system and text-only games on other computers. This practice continued with the advent of MMORPGs. 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,[http://us.blizzard.com/support/article.xml?locale=en_US&articleId=21507&pageNumber=1 How to Stay in the Game (Part 2 of 2)] {{Webarchive|url=https://web.archive.org/web/20100207183038/http://us.blizzard.com/support/article.xml?locale=en_US |date=2010-02-07 }} blizzard.com many online games now derive revenue from the sale of virtual goods.

When Iron Realms Entertainment began auctioning items to players of its MUD, Achaea, Dreams of Divine Lands, in 1997, it became the first company to profit from the sale of virtual goods.[http://www.playnoevil.com/serendipity/index.php?/archives/765-The-World-of-text-MMOs-MUDs-An-Interview-with-Matt-Mihaly,-CEO-of-Iron-Realms-Entertainment.html The World of text MMOs / MUDs – An Interview with Matt Mihaly, CEO of Iron Realms Entertainment] {{Webarchive|url=https://web.archive.org/web/20081002232838/http://www.playnoevil.com/serendipity/index.php?%2Farchives%2F765-The-World-of-text-MMOs-MUDs-An-Interview-with-Matt-Mihaly%2C-CEO-of-Iron-Realms-Entertainment.html |date=2008-10-02 }} playnoevil.com, Friday, September 8. 2006 But it wasn't until the mid-2000s, with companies like Korean Cyworld leading the way,[https://money.cnn.com/2006/07/27/technology/cyworld0727.biz2/index.htm Cyworld ready to attack MySpace] money.cnn.com, July 27, 2006: 11:35 AM EDT 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.

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

Estimates of the future market for these small items vary wildly depending upon who is making the prediction. 2013 sales will be US$4 billion according to one analyst[https://www.reuters.com/article/idUSTRE62O1NB20100325?type=technologyNews A virtual farm turns new ground for game developers] reuters.com, Thu Mar 25, 2010 7:05am EDT and a year later reach 14 billion according to a different analyst.[http://news.cnet.com/8301-13506_3-20022780-17.html Virtual goods revenue to hit $7.3 billion this year] cnet.com, November 15, 2010 9:51 AM PST

In 2010, a virtual space station in the game Entropia Universe sold for $330,000.{{cite web |url= http://www.joystiq.com/2010/01/02/man-buys-virtual-space-station-for-330k-real-dollars/ |title= Man buys virtual space station for 330k real dollars |access-date=2010-06-23}}

The popular, free-to-play video game Fortnite: Battle Royale generated more than $1 billion in revenue across all platforms. This revenue comes entirely from in-game purchases, which — in Fortnite{{'}}s case — offer no competitive advantage to the game.Kaylee Fagan, [https://www.businessinsider.com/fortnite-one-billion-dollars-2018-7 "Fortnite — a free video game — is a billion- dollar money machine"], "Business Insider", July 29, 2018

In online games, virtual goods could be lost due to some unexpected reasons. This brings problems for service providers as well as purchaser. Encryption techniques primarily used for other purposes may, here too, provide functionality. These may include access control, hashing, encryption, digital certificates, and fingerprinting.

{{Main|Gold farming}}

While many companies have embraced exchanging cash for virtual goods, the practice is forbidden in most blockbuster games,[http://news.bbc.co.uk/2/hi/technology/7575902.stm Poor earning virtual gaming gold] bbc.com, 01:36 GMT, Friday, 22 August 2008 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 from an alternate source– violating their agreement with the game's operator in the process.{{cite web|url=https://dotesports.com/counter-strike/news/steam-cease-desist-op-skins-24550|title=Valve sent a cease and desist order to OPSkins|work=Dot Esports|author=Preston Byers|access-date=7 August 2019}}

China outlawed the practice of buying real-world goods with virtual currency in 2009,[http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200906/20090606364208.html China bars use of virtual money for trading in real goods] PRC Ministry of Commerce, Monday, June 29, 2009 2100 GMT something that had become popular in some parts of the country.[https://www.wsj.com/articles/SB117519670114653518 QQ: China's New Coin of the Realm?] wsj.com, March 30, 2007

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• Cellufun[https://www.usatoday.com/tech/products/2009-12-23-virtual-retail-sales-avatar_N.htm Unlike reality, virtual retail sales are hot, especially for avatars] USA Today, 23 Dec 2009
• Changyou{{cite web | url=http://www.playspan.com/node/77 | title=Changyou Selects PlaySpan's UltimatePay for its Online Game Properties | publisher=PlaySpan, Inc | work=playspan.com | date=2010-03-18 | access-date=June 12, 2012}}
• Cyworld
• Facebook{{cite web|url=http://blog.facebook.com/blog.php?post=2234372130 |title=Facebook Blog, February 7, 2007 |publisher=Blog.facebook.com |date=2007-02-07 |access-date=2012-11-26}}
• Gaia online
• Habbo hotel
• Hi5[https://venturebeat.com/2009/03/19/the-worlds-most-lucrative-social-network-chinas-tencent-beats-1-billion-revenue-mark/ The world’s most lucrative social network? China’s Tencent beats $1 billion revenue mark] venturebeat.com, March 19, 2009
• Hotornot
• IMVU[https://abcnews.go.com/Business/virtual-gifts-online-cupcakes-teddies-generate-real-cash/story?id=10053231&page=1 ABC News] March 15, 2010
• Kongzhong{{cite web | title = KongZhong Corp (KONG.O): FULL DESCRIPTION| publisher =Thomson Reuters | url =https://www.reuters.com/finance/stocks/companyProfile?symbol=KONG.O | archive-url =https://web.archive.org/web/20091115064750/http://www.reuters.com/finance/stocks/companyProfile?symbol=KONG.O | url-status =dead | archive-date =2009-11-15 | access-date = 2012-05-28}}
• Nexon[http://www.nexon.net/Etc/AboutCompany.aspx About Company] {{Webarchive|url=https://web.archive.org/web/20090601181122/http://www.nexon.net/Etc/AboutCompany.aspx |date=2009-06-01 }} Nexon Official Site
• Ning[https://www.reuters.com/article/idUSTRE5BS2W420091229?type=technologyNews Virtual goods give Web firms new revenue in ad slump] reuters.com, Tue Dec 29, 2009 12:50pm EST
• Iron Realms Entertainment
• Playdom[http://www.playdom.com/marketing/PDFs/20091002150105_Playdom_RetailCard_PressRelease.pdf Playdom Fuels Its Virtual Goods Business] {{Webarchive|url=https://web.archive.org/web/20101229031952/http://www.playdom.com//marketing/PDFs/20091002150105_Playdom_RetailCard_PressRelease.pdf |date=2010-12-29 }} Press Release, playdom.com, September 30, 2009
• Playfish[https://www.reuters.com/article/deborahCohen/idUSTRE5A31RR20091104 Playfish sees social games as industry driver] Wed Nov 4, 2009 6:02am EST
• Second Life Marketplace[https://marketplace.secondlife.com/ Second Life Marketplace Featured Items] Wed April 26, 2011
• RuneScape[http://www.develop-online.net/news/40387/Runescape-begins-first-microtransaction-experiment Runescape begins first microtransaction experiment] {{Webarchive|url=https://web.archive.org/web/20120405063738/http://www.develop-online.net/news/40387/Runescape-begins-first-microtransaction-experiment |date=2012-04-05 }} develop-online.net, April 2, 2012
• Slide.com[https://www.cnbc.com/id/15840232?video=1308453600&play=1 Virtual Products = Real Cash]{{dead link|date=November 2024|bot=medic}}{{cbignore|bot=medic}} cnbc.com, Oct. 09
• SmallWorlds[http://tvnz.co.nz/business-news/trade-me-founder-invests-in-gaming-4171875 Trade Me founder invests in gaming] tvnz.co.nz, Mar. 11
• Sony Online Entertainment[http://www.massively.com/2009/09/11/redefining-mmos-the-massive-money-of-microtransactions/ Redefining MMOs: The massive money of microtransactions] massively.com, Sep 11th 2009
• Valve[http://www.teamfortress.com/mannconomy/FAQ/ The MANN-conomy update: FAQ] Valve 2010
• Tencent
• World of Warcraft[https://www.wired.com/gamelife/2009/11/wow-microtransactions/#more-18189 Uh-Oh: World of Warcraft Introduces Microtransactions] Wired's Game | Life blog, November 6, 2009
• Xbox Live Marketplace[http://www.xbox.com/en-US/live/microsoftpoints.htm Xbox 360: Get the Points] {{webarchive|url=https://web.archive.org/web/20090123003030/http://www.xbox.com/en-US/live/microsoftpoints.htm |date=2009-01-23 }} Microsoft's Xbox Official Site
• Zynga[https://www.forbes.com/forbes/2009/1116/revolutionaries-technology-social-gaming-farmville-facebook-zynga.html Zynga's Gaming Gamble] forbes.com, 10.29.09, 12:40 PM EDT
• Flirtomatic[https://www.theguardian.com/commentisfree/2009/dec/17/unreal-christmas-virtual-goods Digital tills are ringing to the sound of an unreal Christmas] The Guardian, 17 Dec 2009
• OPSkinsSimon Coutu, [https://www.vice.com/en_us/article/wnj935/heres-how-you-make-12000-in-profit-a-day-selling-virtual-guns "Here's How You Make $12,000 In Profit a Day Selling Virtual Guns"], "Vice", June 30, 2015

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• Skin gambling
• Walled garden (technology)
• Virtual economy

{{Reflist}}

{{MUDs}}

Category:Multi-user dungeon

Category:Virtual economy

Category:Micropayment