This year, millions of people will spend billions of Euros on virtual items and gifts, while material goods and services are increasingly being paid for using virtual currencies and points. Tax collectors see little of the value circulating in these „virtual economies“. In this presentation, virtual economy researcher Vili Lehdonvirta introduces the phenomenon, discusses virtual economies in the larger context of alternative exchange systems, and assesses their future impact on business and society.
Millions of people are spending billions of Euros on presents for their friends in social networking sites, clothes for their characters in online hangouts, and weapons for their fighters in massively-multiplayer games. Virtual currencies created for these online transactions are also increasingly being used to pay for material goods and services, while numerous private entities empowered by digital technology are rolling out even more new currencies, coins and point systems. In many cases, accountants and tax collectors see little of the value circulating in these multitudes of „virtual economies“, unless and until their value is transformed into national currency.
In this presentation, pioneering virtual economy researcher Vili Lehdonvirta introduces the current state of the phenomenon in various countries, discusses virtual economies in the larger context of alternative exchange systems, and assesses the future impact of virtual commerce on business and society. Private currencies have been around for a long time, and some of the current hype related to the virtual currency boom is unfounded. But at the same time, virtual economies generate real economic value, and as social lives become increasingly mediated by digital networks, so will commerce and consumption. How will governments react to the rise of private digital economies?
Vili Lehdonvirta is a researcher at Helsinki Institute for Information Technology, where he conducts research on virtual goods, currencies and economies in collaboration with companies such as Nokia, CCP Games (EVE Online) and Sulake (Habbo). Vili’s PhD thesis on virtual consumerism was the first comprehensive study of consumer behaviour in virtual markets. Vili is a co-founder of the Virtual Economy Research Network and a member of the Advisory Board for Live Gamer, the world’s leading virtual goods marketplace provider. Vili was Advisor and shareholder in Avatars United, a social networking site for avatars that was acquired by Linden Lab (Second Life) in February 2010. From 2000 to 2003, Vili worked as a game developer at Jippii, developing some of the world’s first real-time multiplayer browser games with a freemium model. Vili has a PhD in Economic Sociology from Turku School of Economics and a MSc (Tech) from Helsinki University of Technology. Currently Vili is a Visiting Scholar at the Interfaculty Initiative in Information Studies, University of Tokyo, Asia’s top research university.