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Sell Virtual Products in Online Games

Can you really make money with a business based on an online game's virtual economy? Yes.
November 17, 2006
URL: http://www.entrepreneur.com/article/170750

Those kids you knew who spent their weekends playing Dungeons & Dragons were onto something. Virtual games and worlds are spawning virtual economies. "It's a real economy, but it exists in a virtual space, a computer-generated, earth-like environment that has persistence and physics," says Edward Castronova, associate professor of telecommunications at Indiana University in Bloomington. He points to the online video game World of Warcraft, which hit 7 million subscribers in September, as the largest example of a virtual economy in action.

Entrepreneurs will have to look beyond potions and battle helms for opportunities, though. That's what Sibley Verbeck's The Electric Sheep Company has done. The 31-year-old founder and CEO (in both real- and virtual-world versions) helms a team of nearly 30 employees that builds virtual 3-D experiences, including the open-ended virtual world of Second Life.

Online video games may have more participants, but virtual worlds like Second Life are wide open to creative business models that enhance in-world play. "You have to build your business around an aspect of the virtual world that makes [your business] fundamentally better than other platforms," says Verbeck. Think virtual real estate speculation, content creation and even ultra-interactive online learning spaces for 3-D collaboration. "This is like the opening of the frontier combined with the collapse of communism," says Castronova. "I would advise entrepreneurs to go play video games for a while."

Getting Started
Thinking of starting a business based on a virtual economy? Follow these tips: