A Brief History of Virtual Economy

Abstract

The virtual world economy is a multibillion-dollar industry. There is significant evidence for the growth of virtual economies within a variety of virtual worlds. There is an increasing demand from users to buy, sell, and invest in virtual items and services, including virtual properties. However, there is also evidence suggesting that many companies struggle to succeed in the virtual economy platform. In order to facilitate and drive success in virtual business strategies, it is necessary to have a framework for classifying elements of virtual economies. This paper proposes a classification framework of virtual economy elements based upon the characteristics of products and services, the transaction and marketplace, as well as the currency and exchange systems present in these economic environments. In addition, this research highlights the opportunities and challenges presented to both users and companies within the virtual economy platform.