The BBC is reporting that virtual goods will make billions over the next few years on sites such as Facebook and gaming sites.

This however is only a new phenomenon to the West and to the BBC! Sites such as Cyworld in Korea have been in profit for several years due to the  introduction of a currency (acorns) which permits members to buy virtual goods for their ‘mini worlds’, as gifts for friends and so on.

In addition, many gamers have been earning real world cash by developing characters for games and then selling these on eBay and other sites. About 5 years ago, I remember reading about a teenager who sold a game character for $20,000 to a gamer who did not have the time to play and wanted an advanced character in a role-playing game.

Goods created from 1s and 0s are likely to gain popularity in certain circles as we move into a world where ‘free’ ceases to mean ‘free’. As long as the purchase price is a no brainer, and below the line where transaction decisions need to be seriously considered, it is likely that micro-purchasing may finally find its niche.

To date, micro transactions have been stymied by the costs of processing the transaction through the banking system, but it is likely that 2010 and beyond will see the resolution of this; perhaps by the introduction of systems which allow people to buy ‘credits’ for whole networks eg Facebook, which can be spent in a variety of applications, games, and even perhaps with e-commerce providers who offer digital versions of their product set.

For many, it may be difficult to see how this can fit their business model, but for those with a little imagination, it may be time to look to the East and see how this has already become a mature market there. As a marketing gimmick, it is a good idea, but as a method for generating revenue, it may have far more legs.

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