How do players purchase virtual goods? Identify three virtual currencies and their value in U.S. dollars.
Who would pay $330,000 for a virtual space station? Or $100,000 for an asteroid space resort? How about $99,000 for a virtual bank license? Players of Entropia Universe, a massively multiplayer online game (MMOG), did. Those players are making money, and so are the game developers. There’s a new business model—called “freemium”—driving the economics of these games. Under this model, users play for free but can purchase virtual goods with real money. Worldwide sales of virtual goods were $2.2 billion in 2009 and are predicted to reach $6 billion by 2013. Most virtual goods are inexpensive—costing about $1—such as the tractor you can buy in Farmerville or a weapon in World of Warcraft. That doesn’t seem like much, but when you consider that Zynga’s Frontierville had five million players within one month of launch, we’re talking real money!