Two Economic Issues in Virtual Worlds

The extensive connectedness of the Internet has allowed people to connect and communicate in various ways. This connectedness had given rise to virtual worlds and games that have allowed people to live virtual lives and take part in virtual consumerism, giving rise to economic markets. Some of the worlds are multi-user video games, like Blizzard’s World of Warcraft , which players interact to complete goals, socialize, or buy virtual goods. Other virtual worlds, like Linden Lab’s Second Life, are purely for socializing, exploring, and using virtual objects. The virtual worlds contain marketplaces of virtual goods, such as virtual clothes and furniture, purchased from online stores or auctions using virtual currency (however, most virtual worlds need real word currency to get started in the world, buying, selling, and earning virtual goods.) Just like the real world, virtual worlds experience economic issues all their own that require special consideration by the companies that run those worlds.

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Amateurs are the New Professionals

There is a major disruptive force going on in our world today, and it involves a do-it-yourself behavior on a large scale. Individuals are sharing home videos with the world, performing citizen journalism, and selling goods all via the Internet. Companies are getting into non-core lines of business in order to expand their reach; such as selling music online, offering data centers accessible over the web, and distributing other people’s software through their infrastructure. This subtle and large scale trend is amateurization: the empowerment of firms and individuals to provide goods and services that used to be the realm of a professional organization.

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