virtual goods in context: digitalization of consumption

Virtual goods in context:Digitalization of

consumptionVili Lehdonvirta, vili.lehdonvirta@hiit.fi

Helsinki Institute for Information Technology

Virtual Economy Research Network

Vili Lehdonvirta: Virtual goods in context

Virtual item purchase drivers

Functional attributes Hedonic attributes Social attributes

Performance Visual appearance Rarity

Features Sound Branding

Background fiction Provenance

Customizability Cultural references

Vili Lehdonvirta: "Virtual Item Sales as a Revenue Model: Identifying Attributes that Drive Purchase Decisions", Electronic Commerce Research, vol. 9, no. 1, pp. 97-113.

Vili Lehdonvirta: Virtual goods in context

Digitalization of consumption

• Virtual goods are bought for all the same reasons as material goods

• As life becomes increasingly computer-mediated, so does consumption

• How is the virtual goods market developing vs. other forms of computer-mediated consumption?

Vili Lehdonvirta: Virtual goods in context

Digitalization of consumption in Korea

Vili Lehdonvirta: Virtual goods in context

Digitalization of consumption in China

Vili Lehdonvirta: Virtual goods in context

Digitalization of consumption in U.S.

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Vili Lehdonvirta: Virtual goods in context

Future prospects

• Total U.S. retail: 4400 Bn USD / year– less than 6% “digitalized” so far

• Recession: a boost to virtual consumption

• Environmental sustainability: the next selling point for virtual goods?– provision of material goods (other than food)

29 % of U.S. GHG emissions

Vili Lehdonvirta: Virtual goods in contexthttp://virtual-economy.org