Virtual good

Virtual good

Virtual goods are non-physical objects purchased for use in online communities or online games. They have no intrinsic value and are intangible by definition.[1]

Including digital gifts[2] and digital clothing for avatars,[3] virtual goods may be classified as services instead of goods[citation needed] and are usually sold by companies that operate social networks, community sites, or online games.[1] Sales of virtual goods are sometimes referred to as microtransactions,[4] and the games that utilize this model are usually referred to as freemium (free + premium) games.

A large majority of recent sales have been in Asia.[5]



The first virtual goods to be sold were items for use in MUDs, early, text-only online games. 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,[6] many online games now derive revenue from the sale of virtual goods.[7]

When Iron Realms Entertainment began auctioning items to players of its MUD, Achaea, Dreams of Divine Lands, in 1998, it became the first company to profit from the sale of virtual goods.[8] But it wasn't until the mid-2000s, with companies like the Korean Cyworld leading the way,[9] 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.[5]


In 2009, games played on social networks such as Facebook, games that primarily derive revenue from the sale of virtual goods, brought in 1 billion USD, and that is expected to increase to 1.6 billion in 2010.[10] Worldwide, 7.3 billion USD was made from virtual goods that same year.[5]

Estimates of the future market for these small items vary wildly depending upon who is making the prediction. 2013 sales will be 4 billion USD according to one analyst[10] and a year later reach 14 billion according to a different analyst.[5]

In 2010 a virtual space station in the game Entropia Universe sold for $330,000.[11]


In online games, virtual properties, such as virtual equipment, virtual currency, could be lost due to some unexpected reasons. It also brings problems for service providers. There are some key techniques on securing the virtual asset.

Illicit sale

While many companies have embraced exchanging cash for virtual goods, the practice is forbidden in most blockbuster games,[12] 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–violating their agreement with the game's operator in the process.

In an odd juxtaposition, the Chinese State outlawed the practice of buying real-world goods with virtual currency in 2009,[13] something that had become popular in some parts of the country.[14]

Virtual goods purveyors

See also


  1. ^ a b c d e f Virtual Goods: the next big business model, Jun 20, 2007
  2. ^ Sales of virtual goods boom in US, 10:32 GMT, Thursday, 22 October 2009
  3. ^ Lucrative Alternatives to Online Advertising, October 23, 2008, 5:00PM EST
  4. ^ a b Uh-Oh: World of Warcraft Introduces Microtransactions Wired's Game | Life blog, November 6, 2009
  5. ^ a b c d Virtual goods revenue to hit $7.3 billion this year, November 15, 2010 9:51 AM PST
  6. ^ How to Stay in the Game (Part 2 of 2)
  7. ^ a b Virtual goods give Web firms new revenue in ad slump, Tue Dec 29, 2009 12:50pm EST
  8. ^ a b The World of text MMOs / MUDs - An Interview with Matt Mihaly, CEO of Iron Realms Entertainment, Friday, September 8. 2006
  9. ^ a b Cyworld ready to attack MySpace, July 27, 2006: 11:35 AM EDT
  10. ^ a b A virtual farm turns new ground for game developers, Thu Mar 25, 2010 7:05am EDT
  11. ^ "Man buys virtual space station for 330k real dollars". Retrieved 2010-06-23. 
  12. ^ Poor earning virtual gaming gold, 01:36 GMT, Friday, 22 August 2008
  13. ^ China bars use of virtual money for trading in real goods PRC Ministry of Commerce, Monday,June 29, 2009 2100 GMT
  14. ^ QQ: China's New Coin of the Realm?, March 30, 2007
  15. ^ Unlike reality, virtual retail sales are hot, especially for avatars USA Today, 23 Dec 2009
  16. ^ Facebook Blog, February 7, 2007
  17. ^ The world’s most lucrative social network? China’s Tencent beats $1 billion revenue mark, March 19, 2009
  18. ^ ABC News March 15, 2010
  19. ^ About Company Nexon Official Site
  20. ^
  21. ^ Playdom Fuels Its Virtual Goods Business Press Release,, September 30, 2009
  22. ^ Playfish sees social games as industry driver Wed Nov 4, 2009 6:02am EST
  23. ^ Second Life Marketplace Featured Items Wed April 26, 2011
  24. ^ Virtual Products = Real Cash, Oct. 09
  25. ^ Redefining MMOs: The massive money of microtransactions, Sep 11th 2009
  26. ^ [1]
  27. ^ Xbox 360: Get the Points Microsoft's Xbox Official Site
  28. ^ Zynga's Gaming Gamble, 10.29.09, 12:40 PM EDT
  29. ^ [2] The Guardian, 17 Dec 2009

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