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Money in Virtual Space

Money in Virtual Space. How businesses are farming revenue, establishing transparency and creating a positive user experience. Evolution of Money. Electronic / Wired Credit. Coinage. Bartering. Checks / IOUs. Virtual Currency. Virtual Forms:.

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Money in Virtual Space

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  1. Money in Virtual Space How businesses are farming revenue, establishing transparency and creating a positive user experience

  2. Evolution of Money Electronic / Wired Credit Coinage Bartering Checks / IOUs Virtual Currency Virtual Forms: Gift cards – Who regulates the spending power? “Credits” for services – Surveys that earn you untaxed money? Gaming currency – Unsheltered from inflation/printing! Virtual bartering – Items created, for sale! Unmonitored value transfers – bartering or direct. How to go about regulating with so much anonymity and privacy issues?

  3. Ads vs. Virtual Goods • Ad revenue based on quantity of user and hit growth • Usually fixed rates – uncaptured revenue • Fixed pricing excludes non-paying community, decreases experience • Content is generic and broadcasted one way • Doesn’t positively add to user experience • Virtual goods revenue based on business growth and sales • Typically renewable • Draws large community without excluding non-paying potential participants • Heavy user contributed content • Flexible Price Discrimination • Reinforces user experience Facebook, Myspace, Google, NYTimes, WoW Habbo, Second Life, QQ, Eve

  4. Survey of 2,457 Online Gamers and What They Buy Online

  5. Avg. Spending Per User By Source

  6. No Cash? Create Your Own! Digital services create own currencies, set exchange rates and avoid taxation & regulation. What are virtual goods? Are they goods or are they services and who owns them?

  7. Unregulated, Unchecked, Untaxed • Businesses converting real currencies into their own credits without financial systems to regulate them: • Should these “goods” be taxed? How? • If so, why? Virtual exchange mediums have virtually no normal government needed to be paid for. • Why not bank in house instead of paying for money merchant services? Paypal did it. • How and when should laundering be investigated?

  8. The Good Side of Connecting People and Money • New business opportunities created in third world countries without stable financial systems • Online communities supporting Micro Financing • Made aware via internet • Connected by social media • Empowered by secure transfer systems • Reassured by open communication channels

  9. - Micro Financing Cycle -

  10. An Entrepreneurial Success Story http://www.youtube.com/watch?v=V005L3PWhSE 5:56

  11. Making Micro Finance Possible Global lending to entrepreneurs to help stem poverty Global investment and lending to small businesses Chinese P2P education loans Microfinance for African entrepreneurs and small businesses, some via mobile Microcredit lending from European donors

  12. KIVA SITE PREVIEW • RISK involved • Reinvesting and small interest return • Enabling growth http://www.kiva.org

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