The Hindu : Front Page : Real money from virtual worlds

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Tuesday, Dec 09, 2008
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Real money from virtual worlds

New York: Want to walk a mile in Elvis Presley’s blue suede shoes? It will cost you 50 cents.

In a down economy, that might be an affordable luxury to a teenager or twenty-something hanging out in a virtual world like Gaia Online, which this week will start selling a range of digital accessories depicting the rock legend’s style, including blue suede shoes, a white-rhinestone jumpsuit ($4) and a pompadour ($1.50).

Younger people unfamiliar with Elvis might prefer to shell out $2 for Justin Timberlake’s signature fedora or $3 for a pair of Snoop Dogg Dobermans to raise the cool quotient of their characters, known as avatars.

That is the premise behind Virtual Greats, a start-up in California that represents celebrities and brands in the burgeoning American virtual goods business. The one-year-old company acts as a broker between Hollywood and the technologists who run youth-oriented virtual worlds like Gaia, Whyville and WeeWorld.

The deepening recession has not slowed sales of virtual goods, which executives attribute to people spending more time at home. Gaia Online, a youth world with seven million monthly visitors, sells more than $1 million a month of virtual goods and expects a record month in December, said its chief executive, Craig Sherman. One rival, IMVU, has also had a 15 to 20 per cent increase in sales since September.

Facebook, the social networking site, allows members to spend real money to send virtual gifts. It has worked with corporations like Ben & Jerry’s Homemade, which gave away 500,000 virtual ice cream cones in April as part of a Free Cone Day promotion in stores.

Consumers are tightening their belts, but they still want to socialize with peers and express themselves, industry executives say. Virtual goods like Paris Hilton’s pet chihuahua or Timberlake’s puffy jacket can offer a cheap way to stand out.

“People are thinking that they’re sacrificing in other areas so I’ll indulge here with a dollar,” said a social media analyst. “Is it worth it? It depends on them.”

By most estimates, customers spend about $1.5 billion a year on virtual goods worldwide. Tencent Holdings, an Internet media company based in China, is the leader, with hundreds of millions in annual revenue from virtual goods in online games and other applications. Internet companies in the U.S. are behind the curve. — New York Times News Service

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