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. (more…)