Trend: Shadow Economies: MMORPG Currency

Found this prediction/proposal from Make Magazine which chides Credit Carders for ignoring "the juiciest demographic of all, online gamers & 'in world makers'":

Very soon, credit card companies and game makers will reward their customers who spend money in the real world using private label "rewards" credit cards. They will use gifts of virtual currency such as Blizzard's World of Warcraft gold and Second Life's Linden dollars.

A quick tour of the different MMORPG's reveals millions of players spending hours and hours each day, leveling their characters, as well as earning and spending some type of virtual currency (World of Warcraft currently has over 6 million players). While World of Warcraft doesn't allow their players to build gold with real dollars, there is of course an "underground" market that buys and sells WoW gold. Linden Lab's Second Life has a virtual currency, called Linden Dollars which unlike World of Warcraft "residents" can buy, sell and earn a living from Lindens - there's a growing population of residents who make their living in the real world entirely from the revenue they procure in Second Life.

At the time of this writing, there are 166,922 residents, spending over 135,984.00 in 24 hours and $6.5 million USD in transactions took place is about 20 days. In 2006, there's a good chance $100 million USD dollars worth of transactions will flow through the virtual world of Second Life. Linden recently rolled out their own exchange, Lindex, meaning - they're almost a bank now.

It's not a matter of if, just when - credit card companies, Pay Pal, Amazon, eBay and the individual "gaming" companies eventually bridge the real and virtual currencies with loyalty programs and private label credit cards - there's too much money out there to -not- to do this. This "demographic" is the battleground. The more you spend, the more you earn, sorta. Virtual $ isn't a crappy electronics doo-dad, it's just a number in a computer. Maybe you'll get some discounted airline tickets when you hit level 60 too, you deserve it! Earn your way to a new graphics card, why not.

With tens of thousands (and eventually millions) of "in world Makers" selling their virtual goods, routing the real money to and from a closely integrated bank / credit program seems to make sense. The virtual marketplace has happened, it just hasn't been installed everywhere yet. Maybe this will help a new generation of credit card owners manage their credit, it's hard to go $20k in debt in WoW, a lot easier in the real world...

Sure, there are complexities to any economy, real or virtual, and limits to how much currency would or could make an impact - but nimble MMO's with economies will figure this out. There's fraud and mischief that would develope, but that's true always. Spend in the real world, earn virtual currencies for the "games" you play, that part is simple. This can apply to Sony, Xbox, etc...Xbox 360 already has "gamer cards", ways to buy things too.

There's another component to a loyalty program for online gaming - avatars. If you "play" any of these MMORPG's a lot of emphasis on the appearance of your virtual identity, your avatar. In Second Life, it's impossible to fly/walk without seeing virtual clothing makers and avatar stores. You can (and will) spend countless hours dressing up and personalizing your digital doppelganger - even in Warcraft, your avatar is something you spend months and soon, years developing.

get more at Make: http://www.makezine.com/blog/archive/2006/03/the_future_of_credit_cards_ear.html