Virtual goods drive some people nuts. I understand this.
Why, you might ask, would sound-minded citizens spend real money for imaginary items in some Facebook game? Would not that money be better going to something useful, like lunch, or the local orphanage?
Besides, (you might continue) how much real money could one possibly want to drop on, say, new clothes for an avatar? To breed virtual puppies? To buy imaginary weapons? Or purchase a virtual pig in that blasted FarmVille game? How much could all this nothing possibly be worth?
I will give you a hint: One billion dollars.
It's true. That's the going estimate for how much will be spent on virtual goods in the American market this year. In Asia, the figure is already five times that. These are, by common agreement, very large numbers.
Virtual goods aren't just fodder for oddball human-interest stories any more. They're real, bone fide moneymakers, and thanks especially to Facebook games, they're everywhere. They're estimated to account for a sizeable chunk of Facebook's revenue, and the site is now in the process of launching its own currency - "Facebook credits" - to get a bigger slice of the action. It seems the time has come to stop laughing and embrace the virtual pig.
Virtual goods broached the Western consciousness with the advent of virtual worlds such as Second Life and World of Warcraft, which sprouted their own internal economies. Virtual goods serve two distinct purposes. Some, such as weapons, improve a player's performance in a game. Others, such as clothes, are more like playthings, a way to create an online identity.
But for all the hoopla, virtual worlds remained a niche. Virtual goods, too, might have remained a relative side-show, had we not happened on one of our age's great alchemic discoveries: When virtual goods are stirred together with two other Internet phenomena - casual browser games and social networks - the product is solid gold.
It's called "social gaming," and it refers to the new kind of distraction that's colonized Facebook and is sweeping across the open Web and mobile devices too.
The idea is simple: take a casual, fun game that you can play in a Web browser. Make the game at least slightly multiplayer; this can be as simple as sharing high-scores between friends. And then, once those friends are looking, give players the chance to get ahead in the game by ponying up real cash.
An intriguing website called FooPets shows how it's done. It goes like this: First, players "adopt" a far-too-cute 3D puppy or kitten. The virtual pet requires virtual food, and before you know it, you're at the virtual pet store buying - I kid you not - virtual Purina-branded kibble. (Branding opportunities are many in the world of virtual goods.) To pay, you earn credits by scratching your little brute under the chin over and over, by completing various incentives, or by - ahem - producing a credit card.
The animal thus looked-after, the idea then becomes to decorate your pet's room with items that can only be paid for in real dollars. A gold harp costs about $12.50, which is a great deal if you a) compare it to a real harp and b) don't spend too much time wondering what good it will do an imaginary kitten. To drive sales, virtual goods makers will declare some items to be limited-issue. That's right: FooPets will only sell this $12.50 picture of a harp to 185 customers - and it's already sold 21. Buy now!
It's ingenious. And if you've played one social game, you've played them all. But the pay-or-play model is starting to embrace all kinds of online distractions. Flash games that once were free are now asking for virtual coinage. Even old standbys such as the Atari-era Missile Defense and the puzzle game Bejewelled are getting gussied up with bonuses that can be purchased for coin.
Now, with Facebook throwing its institutional weight behind the genre, it will only grow faster. "Facebook Credits" will be like quarters to feed into its vast arcade.
It's easy to be incredulous, which I more than occasionally am. The value proposition of virtual goods ("nothing for something") is weak. But consider the arcade analogy: No one who's fed quarters into a pinball machine, or paycheques into an XBox, is in a position to scoff. We're all paying for an experience, it's just the nature of the experience that varies.
In fact, if anything's odd, is that it's taken so long for someone to turn shopping, our favourite past time, into a video game. That's something to admire about virtual goods: in their fakeness, they're true to life. They distill our consumer culture to its purest form.
They provide the fun of shopping without the wares; the thrill of unwrapping without the wrapping paper. They offer the joy of conspicuous consumption without the consumption. I don't know about the virtual pig or the picture of the golden kitten harp, but that's something people will pay good money for.