Virtual currency
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Virtual currency (or in-game currency depending on environment) is used to purchase virtual goods within a variety of online communities; which include social networking websites, virtual worlds and online gaming sites.[1] 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.[1] Some virtual currencies are time-based, relying upon measurement of in-game achievements in order to accrue exchangeable points.
The word virtual currency or cyber currency is also often used, in a more broad sense, to indicate electronic money, that is not contractually backed by tangible assets nor by legal tender laws, and which is not a tangible commodity itself. Examples are peer-to-peer crypto-currencies like bitcoin and the above mentioned in-game currencies that are backed by virtual goods.
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[edit] Business
Virtual goods have been in popular demand, driving revenue in Asia and Europe for years.[2][3] In the past, the United States had only devout gamers spending money on virtual goods; driven by the popularity of widely appealing games for social networks such as Facebook and MySpace, this is rapidly changing.[2] Zynga reported that direct purchases of virtual currency and goods accounted for most of its more than $100 million in revenue for 2009.[2]
[edit] Gamer currency
Players of some massively multiplayer online games (MMOGs) spend real money on virtual currency to purchase swords, houses and magic wands for their in-game avatars.[1][3] In Restaurant City, a game by Playfish, 18 million active users manage their own café, while 62 million users cultivate a farm and purchase game dollars towards additions to their farm in Zynga’s FarmVille.[2][3]
Virtual currency systems such as Hub Culture's Ven are used beyond gaming to enable trade and purchase of real world items, inventory and knowledge.[4] Ven is the first virtual currency to have been used in commodity and carbon credit trades.[5] In others, such as Empire Avenue, the virtual currency can only be used to invest in other registered members or purchase in-game ads and services while allowing the purchase of virtual currency via PayPal US dollars.[6]
For users who pay US dollars in exchange for virtual dollars, sites will offer PayPal or a similar credit card payment option, or through virtual currency platforms such as: SponsorPay, Offerpal, Peanut Labs, Sometrics, Bizmey and more.[3][7]
[edit] Virtual world currency
An often confusing part of using virtual worlds – e.g. Second Life, OpenSim – is figuring out how the commerce system works, see Opensim Payments 101.
[edit] Hybrid currency
Where a virtual currency is accepted as payment for a "real" product or service.
[edit] See also
[edit] References
- ^ a b c http://howtostartasocialnetwork.com/2009/12/07/virtual-currencies-and-virtual-goods-definitions-and-revenue-streams-in-social-networks/
- ^ a b c d "Virtual Goods Start Bringing Real Paydays". The New York Times. 7 November 2009. http://www.nytimes.com/2009/11/07/technology/internet/07virtual.html.
- ^ a b c d "Sales of virtual goods boom in US". BBC News. 22 October 2009. http://news.bbc.co.uk/2/hi/technology/8320184.stm.
- ^ http://www.wired.com/magazine/2010/02/ff_futureofmoney/2/
- ^ http://www.finextra.com/news/fullstory.aspx?newsitemid=22475/>
- ^ "Empire Avenue, the stockmarket where YOU’RE for sale". http://thenextweb.com/apps/2010/07/26/empire-avenue-the-stockmarket-where-youre-for-sale-invites/. Retrieved 22 March 2011.
- ^ http://www.insidefacebook.com/2008/11/25/10-tips-for-monetizing-social-traffic-through-virtual-currency/
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