Social network users are using real money to buy virtual goods. On games such as Yoville and CafeWorld, players can spend real cash in exchange for virtual cash. In these games, players can purchase “coins” to buy virtual items for their houses and/or kitchens.
Used strategically, coins allow players to level up faster. Miranda Marquit, a staff writer for Moolanomy writes: “If you become attached to the game, and want to excel, and want to experience more, you have to spend money.”
Who is spending this money? ”Virtual goods buyers strongly skew male. Growth is especially strong among the male 18-to-24-year-old demographic (increase from 15% to 31% of online consumers in this demographic since 2009).”
On Marketing Charts, statistics show that “13% of online consumers buy virtual goods.” Marquit writes: “According to Inside Network, a research firm quoted in the article, last year people paid $1.03 billion for products that don’t exist outside of the virtual world.” Choke. $1.03 billion?!? Are these people crazy? What is the benefit? Marketing Chart answers: “Social web services, including virtual goods, will be one of the key drivers of the mobile web 2.0 technology market[s], according to a recent study from Juniper Research.”
Virtual shopping is creating a new market, and businesses are responding. Michael Rosenwald of the Washington Post agrees: “Last year, as the physical economy withered, Second Life’s economy blossomed, with user-to-user transactions topping $567 million in actual U.S. currency, a 65 percent jump over 2008.”
What constitutes real cash anymore? Personally, I don’t carry around bills and coins anymore. I use plastic. Money is no longer tangible–it’s electronic. Rosenwald says: “People entering virtual worlds for the first time are often surprised to learn that virtual dollars have actual value. They should not be surprised, economists say, because whether the world is physical or electronic, all value is virtual.” Alternative realities are no longer the stuff of science fiction. We are creating a universe parallel to ours.
The new web is creating a new financial system–a virtual economy. In games like Second Life, users are using real currency to rent or buy cars and/or houses; others are buying clothes and shoes. 
Users are creating virtual business to handle transactions. Cyber malls are growing in popularity. In Bloomburg Businessweek, one player comments: “This virtual role-playing economy is so strong that it now has to import skill and services from the real-world economy.” The two worlds are colliding and creating an “explosion of [new] media, products, and services.” The big bang is no longer just a theory; it’s a prophecy.
Jamie,
As I watch my much younger relatives “buy in” to the consumer ideology, and be trained in it from a very early age through webkins sites and other online spaces, it makes me worry about the future for a nation that already cannot control its debt! I just received coins for playing Scrabble on Facebook. What in the world do I need these for?