The outcast's haven

Our world is changing, our technology is changing, even today, the impossible is being achieved- from absolutely nothing. For example, an old example would be that of 'Project Entropia'. Making headlines for having the world's most expensive virtual objects sold, it's interesting how consumer demand can be met, for absolutely nothing. In game, a space station was sold for around $100,000 USD, where the investment was returned in under a year. This is old news essentially, having happened in around 2006

What does this mean for our economy though? Because, simply- people are paying money, for nothing but a bunch of pixels. Perhaps it is the only solution to our world's natural resource crisis. Why? Because, the amount of manufactured goods is devastating the amount of goods left on our planet. With an object that reduces a consumers disposable income, this would theoretically in turn, lessen the amount of manufactured goods that they would buy, thereby reducing their resource footprint. Secondly, there would be no such thing as an equilibrium price, as supply will infinitely outstrip demand, regardless of how many consumers there are. Therefore, the price will consistently stay the same, unless the basic maintenance costs have been exceeded. However, these costs will be negligible, especially if the product reaches mainstream popularity.

Interestingly, this theory of paying for essentially 'nothing' has been existing for quite a long time. Characters of popular MMORPGS have retailed for more than a few thousand dollars, with the only expense of the producers being the transaction fees, and possibly, the subscription fees/opportunity cost that this action would have incurred. Companies have caught onto this, and in China, there are companies set up in order to 'Powerlevel' characters, for lazy players. Powerleveling is essentially, playing one's character on an MMORPG, and subsequently preforming repetitive actions on it, so as to 'level up' or increase the strength, or value of that character. However, due to the costs incurred by paying the people for preforming these repetitive actions, this isn't an actual example of the new Virtual Economy.

The true virtual economies are still developing as this post is being written. Perhaps, this post will be obsolete, the second I push that orange button labeled 'Publish Post'. However, there are two main structures that have been developing under the economical radar of Western nations. One is owned by a Korean corporation, and one is owned by an American company. Firstly, a site know as 'Cyworld' was once touted as being a major competitor in the 'Social Networking' industry. However, the Western version hasn't really taken off- and only holds a minor market share.

Cyworld is a website that allows its users to have a virtual home, which they can decorate, and in turn- show off to their friends. Users pay money, through a Paypal transaction, or through a mobile phone bill- and exchange it for a currency known as 'Acorns'. With this currency, users can decorate their homes with much more exclusive items. Surprisingly enough, the South Korean company was earning around $300,000 dollars from this transaction alone. The figure was obtained was in September, 2005.

http://money.cnn.com/2006/07/27/technology/cyworld0727.biz2/index.htm

This is an economy that allows users to purchase items, purely for aesthetic value. A lot of other companies have adopted this idea, especially text MMORPGS, or even forums, in the form of donations to the site. Perhaps, in our world's increasing dependence on the internet, this could be one way to allow 3rd world nations to develop substantial revenue- without exerting much expenditures.

The second structure is that in the form of monthly subscriptions. A prime example of this would be the massively popular 'World of Warcraft' where players have to pay a monthly fee in order to access the game. Because of it's popularity, and the high retention/subscription levels experienced in the game- currently, it is almost untouched by the economic crisis in America. It's parent company has been affected by the economic crisis, but Blizzard itself has proved that a virtual economy can shield a company from the real world- if the correct conditions are met.

http://multiplayerblog.mtv.com/2008/10/16/blizzard-economic-downturn-wont-hurt-world-of-warcraft/

Retrieved on the 16th of September, 2008

In conclusion, I cannot imagine the way that the Virtual Economy will develop, and evolve in the future, but all I can state truthfully, is that this new economy is only in it's infancy, and perhaps, it will develop into a domineering machine, that will control tomorrows world.