Archive for Virtual Currency

Boom Watch

While the summer olympics may put a spotlight on virtual goods because of China’s huge ambitions, signs of the coming boom are popping up everywhere. The most significant recent news concerns a virtual currency engine called Twofish Elements:

… users are looking for interactive experiences online that are too costly to be paid for by ads alone, so micro-transactions are the logical next step.

… That’s where Twofish Elements comes in, with an offer to help game companies optimize these transactions.

Its software is a plug-and-play platform, and is a sort of combination of web analytics and Paypal for games. Twofish watches what players do and helps create transaction steps to optimize revenue. It handles the micro-payments (even those from players overseas) and protects against the risk of fraud and chargebacks.

VentureBeat: TwoFish Elements launches for micro-transaction economies on the web and someday the web?

Twofish Elements, billed as a “turnkey solution” for companies with online worlds and game networks that want someone to handle in-game currency, micro-transactions and other features that comprise a virtual economy.

GigaOM: Virtual World Economy in a Box

It will be interesting to see how open this is and whether Linden Lab will enter this space any time soon. Technology News has a high level overview of virtual currency systems and I’ve rounded up some notable quotes dealing with virtual goods:

the business of selling virtual items that enable internet users to express themselves is booming. Over $2bn is spent on virtual items every year and I don’t think this is a trend to bet against. Disney certainly didn’t with its purchase of Club Penguin, which could be worth up to $700m.

And it was announced yesterday that Paramount has inked a deal with Habbo Hotel to create merchandise for one of Paramount’s upcoming movies.

e-Consultancy

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Happy New Year!

What?! We’re almost 3 weeks into the new year and it’s going on a month since the last MJ post! Well, folks, I’ve been busy coding and quite frankly am still reassessing The Meshverse Journal’s role and flow. However, a new dawn is on the product/service horizon so I’ll have to get back into writing mode and besides – I miss my daily MJ fix too! So let’s kick this new year off with an update on what may prove to have been the biggest story I mentioned last year – China and the Coming Boom in Virtual Property.

I was reminded of China by this comment on the Intersection Unlimited blog

no matter what, virtual worlds will be changing the way we think, work, play and purchase products. And it isn’t going to take 10 years to see this, maybe not even two or three.

China’s Virtual World Plans

(NOTE: Intersection Unlimited’s ChatBridge product ROCKS! It’s truly a key meshverse technology – don’t touch that dial!)

There’s a link I hadn’t seen in the above post so I thought I’d take a quick look to see what new developments had occurred. From the horse’s mouth I found:

‘China Virtual Economy District’ creates a wide and whole new platform for traditional enterprises, internet companies and individuals to participate in. This means that the dream of the inter-connection of virtual world with real world will come true, and the new generation of culture originality of CRD is started. Also means that this is a giant step to the promotion of industry infrastructure of Beijing Shijing district.

China Recreation District

GigaOM has been tracking this and just yesterday posted an interesting article on the Chinese government’s mixed signals regarding monitoring and controlling virtual currencies. What I do these days for any topic I’m interested in, is to use another meshverse oriented tool Yahoo Pipes to begin tracking resources so here’s my Yahoo Pipe for China Virtual Currency.

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Theory of Games and Economic Behavior

While reviewing some notes on the evolution of the meshverse, I came across this 10-year old quote:

In the coalescence of the software, banking, and telecommunications industries, we are spawning the precursors of collective digital organisms that will roam the network like social insects, sending packets of digital currency back to their nests. The push toward interactive communications over the Web is aimed not at delivering content to the consumer(this can be done already), but at delivering money in real time, the other way.

Darwin Among the Machines: The Evolution of Global Intelligence (Helix Books)

The subject of games has been mentioned here as well as on my Rhythmeering blog so I thought this might be of some interest to folks wondering just how deep this rabbit hole of social virtual worlds goes.

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China and the Coming Boom in Virtual Property

Reading reBang’s When Retail Goes Virtual post about “the impact virtual worlds will almost certainly have on real world commerce.”, I was reminded of some links I hadn’t gotten around to posting yet:

American government officials and economists from Secretary of the Treasury Hank Paulson to Senator Chuck Shumer to Paul Kruger have focused on balance of trade issues with China, the RMB-USD exchange rate, and China’s huge foreign reserves. But few mainstream economists or Government officials have looked at new forms of currency emerging in China that already is beginning to greatly affect China’s underlying economy – virtual currency.

Investors should not fail to look at this sector. Xinhua News has reported that the volume of virtual currency has reached several hundred million USD a year in China. My firm estimates the size to grow 30% in 2007.

China’s Virtual, e-Commerce Currency – Seeking Alpha

reBang references an article from the Guardian which quotes Robert Lai, chief scientist of the Beijing Cyber Recreation District talking about virtual worlds capable of supporting billions of avatars(). The Chinese are VERY serious about the meshverse. The Guardian article goes on to say:

… this is a bold attempt to repeat what China has done in manufacturing (ie, conquering the world) in services. Be warned.

… At the moment, Britain and other western economies benefit from cheap Chinese manufactured goods and the low inflation they bring while also benefiting from huge wholesale, retail and distribution markups on the same goods. If they too migrate to China, what will there be left for us to do? That is a very serious question.

Virtual China looks for real benefits

Others have raised this very serious question:

  • Whether or not such e-commerce is even feasible may be a moot point. I feel it speaks volumes as to where the country is, culturally. Now, technology futurists are in a sense saying, “You will be able to point, click, and buy anything, just how you want it, directly from any factory in the world”—so much for “Buy American.” The Beijing Cyber Recreation District is being billed as a so-called “online counterpart” to Beijing’s China Recreation District, a physical, real-world endeavor that will boast entertainment and shopping; the center is set to open in time for the 2008 Olympics, according to the AP. And where will this new entertainment center be built? In an abandoned Chinese steel plant. Can’t you just feel the irony?

thefabricator: Point, click, buy anything — from anywhere

  • Need a new refrigerator or a pair of pants? Go window shopping (that is, in your Explorer window) online in a virtual world and then buy it directly from the factory in rural Asia where the item is made. That’s what the Chinese government is proposing. According to an Associated Press report (“China Plans Virtual World for Commerce,” October 15, 2007), China’s central government is methodically constructing a vast virtual world, dubbed the Beijing Cyber Recreation District.
    “Some supply-chain experts say the project is impossibly grandiose in its goal to provide direct links between tens of thousands of Chinese manufacturers and millions of individual customers around the world,” AP wrote. But if this turns out to be the surprise hit that no one has foreseen, PLM vendors may need to refashion their sourcing and supply-chain management features.

    CADalyst: CADfidential

The west is going to have to come up with some serious innovation to cope with this but the trends I’ve covered here such as Desktop Manufacturing and DIY Gone Wild indicate that this innovation is already underway. The above-mentioned reBang post is even more expansive.

China may have low cost labor but western desktop design & manufacturing entrepreneurs can ship from down the street and do meet-ups with both creative trend setters(music, fashion, sports) and customers. This competition will play a key role in driving demand for virtual property. The coming boom in virtual property will be more far reaching than the US/USSR space race.

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Communities and Commerce

One panelist at the recently mentioned Virtual Goods Summit was community guru Amy Jo Kim who I became familiar with during my days at the WeTalk Network. There are some short and sweet excerpts from her book like the following nugget:

To thrive as a twenty-first-century community builder, you’ll want to be on the lookout for opportunities to blur the boundary between the physical and the virtual, because that’s where the action is and where the Net is headed. This could mean bringing existing groups online, facilitating face-to-face meetings among your members, integrating commerce and communications systems, or creating specialized role-playing environments. Whatever you do, remember that the true power of communities—whether on or off the Web—lies in their power to affect people’s physical, emotional, spiritual, and professional lives in a meaningful way.

Community Building on the Web: Epilogue

which viewed another way points to the so-called “experience economy“. This gives insight into how and why communities are becoming a kind of 21st century black gold that is more significant than brands. For more detail check out the following books:


Communities of Commerce: Building Internet Business Communities to Accelerate Growth, Minimize Risk, and Increase Customer Loyalty

and

Online Communities: Commerce, Community Action, and the Virtual University

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The Virtual Is Real – Just Watch Some Neurons or Roaches

For those who can’t seem to follow the music, money or physics, the key may be neurons or roaches:

Reeves: The human brian is not specialized to differentiate between virtual and real. Same neurons fire when an avatar smiles at you as when a real person smiles at you. Seriosity is looking at what happens when you create an opportunity to do serious things with virtual currency attached, such as sending email messages with virtual currency attached. The result? You open the email faster when currency is attached. Virtual money changes real behavior.

3pointD.com » Blog Archive » Virtual Goods Summit: Why Virtual Goods Matter

Roaches it seems, behave like neurons:

“It turns out,” he says, “that roaches aren’t very discriminating” — they’ll accept anything of roughly the right size and smell. In the end, the engineers came up with little wheeled robots shaped like matchboxes and perfumed with eau de roach. They were programmed to have the same likes and dislikes as roaches — that is, to prefer crowds and darkness. When introduced to the real roaches, the robots fit right in — the gathering behavior of the horde was pretty much unchanged. Researchers then reprogrammed the robots to prefer a less-dark hiding place — unnatural for a roach. The insects and the infiltrators were put back into the enclosure, except this time one of their hiding places was more lightly tinted than the other: It was brighter inside. Again, all the roaches scurried around randomly for a while, but the robots eventually settled under the lighter, less shadowy disk — and the real cockroaches followed.

robo_roach_1115.jpg

Time: Robot Roaches Do the Trick

As always, remember there is a cure for the Syndrome! 🙂

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More On The Virtual Goods Business Model

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