Virtual World Economies- Thriving or Dying?

Edited by: Jani Pirkola


It seems like most of the buzz around virtual worlds lately has been that virtual world economies are thriving…hmmm…so, why is that?

Even our economy is struggling, I see a positive trend in virtual world adoption and with that the economies within virtual worlds budding as well.

"With its users swapping virtual goods and services worth around $600 million per year, Second Life has the largest economy of any virtual world - which exceeds the GDP of 19 countries, including Samoa". Newscientist.com

Second Life Residents spend an average of about 100 minutes in-world per visit So what are residents doing over this hour and forty minutes? Conducting business in a virtual world is becoming more and more commonplace. Although there is a differentiation between

virtual goods vs. physical tangible goods (assets), virtual goods are being taken more and more seriously. Take a recent example from The New York Times of a real-life will reflecting virtual goods. Obviously due to the user agreement in a virtual world, you can't take your avatar with you when you die nor does your 'virtual' property remain unless someone is paying the fee to maintain it.

"New Scientist reports that Americans will spend $621 million (in real dollars) in virtual worlds this year, while the Asian market is dropping an estimated $5 billion (which also fuels the Internet addiction rehab market). Second Life in particular is raking it in with $144 million in transactions in the second quarter of 2009-a 94 percent increase from last year."(http://blogs.discovermagazine.com/discoblog/2009/10/05/real-economy-still-sucks-virtual-economy-booming/)

"The worth of the U.S. virtual goods market is expected to surpass $1 billion this year, according to a report released last month by analysts at Inside Virtual Goods. The global market is thought to be five or six times as much." http://www.nytimes.com/2009/11/02/technology/internet/02assets.html?_r=1

Let's narrow down the term 'virtual worlds' to refer more specifically to the popular virtual world of Second Life from Linden Lab, here are a few more relevant stats:

"Over 1050 users spent 1 million Linden Dollars or more, which translates to about $4,000 USD and up. Just under 60 per cent of the 475,000 Second Life players spent at least $2 in September, and the total supply of Linden Dollars is equal to over $26 million USD." http://www.multiplayergames.com/2009/10/28/users-fork-over-1-billion-in-real-money-for-fake-stuff/

Brian Solis stated on his blog:"Residents create more than 250,000 new virtual goods every day - from clothing to vehicles to buildings to automatic language translators, and more." http://www.briansolis.com/2009/10/the-second-life-of-second-life/

Virtual economies with make-believe products and goods are booming, albeit the real-world economy may not be. The United States is slowly climbing the virtual goods ladder if you will as Europe and Asia have always led the pack in virtual world spending. So here's to the future of virtual world economic growth.

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4 comment(s) for “Virtual World Economies- Thriving or Dying?”


Gravatar of Valer Valer said on Wednesday, November 25, 2009 (8:40:02 AM)
"So here's to the future of virtual world economic growth."

Let me state that this is the future of the economy.
Gravatar of cube3 cube3 said on Wednesday, November 25, 2009 (10:17:25 AM)
yes. BUT ONLY if the creators OWN the property they make.And the delivery mechanisms cant control the economy and the industry as a whole.

The fallicy that technology companies will also be the MEDIA companies has driven virtual worlds/ and all new media into 3 crashes since 1990, and is driving the 4th crash - the SL and the class of web 2.0 -2006- as you blog.;)

Gravatar of Bob Cohen Bob Cohen said on Thursday, November 26, 2009 (5:08:20 AM)
If not dying, at least slowing down!

REALLY STRIKING STATISTICS FROM KZERO! QUARTER ON QUARTER REGISTERED USER GROWTH DROPS SHARPLY IN Q3 2009!

Is this an economic impact or are kids and others getting saturated with VWs?
See http://www.kzero.co.uk/presentations.php
Gravatar of c3 c3 said on Thursday, November 26, 2009 (8:40:41 AM)
flash games sold as the future of communications do get tired. as they did in 99.