virtual economy

economics

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Last updated

July 16, 2026

Quick Summary

A virtual economy refers to an online environment where players can engage in economic activities, such as buying, selling, and trading virtual goods and services. These economies have generated billions of dollars, with games like World of Warcraft earning significant revenue through subscriptions and in-game purchases.1

The concept of virtual economies has evolved from early text-based games like MUDs to sophisticated massively multiplayer online games (MMOGs). A notable development is the emergence of secondary markets where virtual items are exchanged for real cash, a phenomenon first observed in Ultima Online. Games like Second Life were specifically designed around a virtual economy, allowing players to earn and exchange virtual currency (Lindens) for real-world money.1

The metaverse, a network of interconnected immersive digital worlds, is also seen as an emerging space for commerce. It allows for the exchange of digital and physical goods and services, potentially merging virtual and real-world commerce through technologies like NFTs and cryptocurrency. While the metaverse offers investment opportunities, it also carries risks, and its long-term impact remains to be seen.2

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online gaming
Birth of virtual economies
law? Another issue that game publishers have had to face is the rise of secondary economies outside their game worlds. Ultima Online designers were the first to observe this phenomenon at work when a castle in their game world sold for several thousand dollars…
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law? Another issue that game publishers have had to face is the rise of secondary economies outside their game worlds. Ultima Online designers were the first to observe this phenomenon at work when a castle in their game world sold for several thousand dollars…
Read More

Internet
Social gaming and social networking
…Economists have begun studying such virtual economies, some of which now exceed the gross national product of countries in Africa and Asia. In fact, virtual economies have given economists a means of running controlled experiments.
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…Economists have begun studying such virtual economies, some of which now exceed the gross national product of countries in Africa and Asia. In fact, virtual economies have given economists a means of running controlled experiments.
Read More