Virtual products for real money

Imagine for a few moments that you are a budding entrepreneur and you are about to deliver your big sales pitch on a TV show like Dragons Den, in what could be the biggest day of your life. Your product can reach the entire world’s population and be available twenty-four hours a day, seven days a week and three hundred and sixty-five days a year and there are no shipping or delivery issues to worry about. Here comes the clincher your product does not actually exist, because you are selling virtual items.

A few years ago you would have been laughed off the stage with nothing but the words “I’m sorry, but I’m out!” ringing in your ears, but the virtual goods market is expected to break $2.1 billion in America alone this year. Between 2007 and 2010, virtual goods revenue increased 245 percent, according to a study released from market-research firm In-Stat and by 2014 the company also reported that providers will generate more than $14 billion.

Although virtual goods have been common place in South Korea for more than a decade, my first memory of this phenomenon was way back when virtual cards were all the rage, but for me the virtual world of Second Life was where this madness all began. Just how quickly masses of people handed over their hard-earned cash in return for virtual furniture and clothes for their virtual selves in the online world. Whilst many looked on and scoffed at what was happening, canny businesses quickly realised the true potential that was on offer.

A quick look at the success of Zynga, the social gaming company that created mega-hits Farmville and Mafia Wars for the Facebook platform and other social networks are prime examples of those that seized the day at the right time. Let us not forget the acquisition of Playdom by Disney, Playfish’s integration across Electronic Arts, along with the rise of the next generation in the form of CrowdStar and Kabam, which all illustrate that if this product is real or not, one thing for certain is that it’s here to stay.

In this age of celebrity I suppose it was no surprise to hear that Snoop Dogg, has made about $250,000 since mid-2008 selling items like virtual Dobermans, according to a spokesman for his virtual goods business. However, to understand just how far things have come you only have to look at the recent Zynga Deal With Lady Gaga.

Eh, Eh (Nothing Else I Can Say)

GagaVille, as the farm will be called, will give FarmVille users who complete certain tasks exclusive early access to songs from Lady Gaga’s “Born This Way” album, to be released to the rest of the non-Farmville world on May 23. As part of the partnership, Zynga will also bundle downloads of “Born This Way” with special prepaid $25 Zynga Game Cards that will be sold at Best Buy, as reported by the New York Times.

In a few years we have gone from sending each other virtual cards to purchasing celebrity endorsed clothes, branded products and anything you can possibly think of. If you are brave enough to give yourself a good look in the mirror for a reality check, you quickly realise that none of this is real, but how did this happen?

Many will proudly tell you that marketing and advertising do not work on them but some of these same people will spend more time, money and energy clothing and looking after their virtual selves, which  anyone of sound mind would declare as simply madness.

The modern-day fashion victims in all their glory?

Am I reading too much into this? As we spend more time online with gamertags and avatars, we simply want to express ourselves and ensure that our virtual side is just as unique as we are. These products allow us to show the world our personality and what makes us happy or maybe it’s just harmless fun.

No matter what your thoughts are on this subject, billions are being spent on items that do not exist. Maybe one thing we can all agree on is that whomever convinced the world to spend their cash on literally “nothing” is a genius. It makes the Emperor’s New Clothes tale more relevant in today’s society than ever before.

We are really interested in your thoughts on the virtual goods market; do you insist your gamertag avatar has lots of cool outfits to wear? Do you dabble now and again with the occasional purchase or do you avoid them like the plague?

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