Virtual Economies

A little free section from the new book 😉

Virtual economies are not as common an addition to a gamified system, but I wanted to include a little bit about them.  Virtual economies can be based entirely in the virtual world, or can break that barrier and have some effect on the real world, depending on how they are designed. If you consider points and badges, they are a type of virtual currency, though they have no real world value, in the system they represent effort and skill. If that virtual currency can then be used to purchase virtual goods, you being to have an actual economy. For example, many games allow you to collect coins or points and then exchange them for in game goods. For example, Fallout Shelter from Bethseda. As you play the game, you earn bottle caps – the in game currency. Those bottle tops can then be used to purchase new rooms for your shelter.

However, if you wish to speed up the process, you can use real money to purchase more bottle caps. At this point, the virtual economy can be influenced by the real world. This is something that social games like Farmville have been doing very well for some years now.

Another way for the real world to influence the virtual economy is the sale of virtual goods for real money. As I mentioned previously, Second Life produced a real world millionaire, Anshe Chung through the sale of virtual property for real money!

All of this can be done in gamification, but you have to consider some of the legal ramifications that go with economies that affect the real world as the rules can vary – especially around using virtual currency as a replacement for real currency.

As an example of this may work in gamificaiton, consider a software company. They have a product that is free to use, but can be upgraded for better functionality at a price. They want to create a loyalty scheme where users of the free software can earn points that can be traded in for time-limited upgrades.

In this situation, you could set up a system where a desirable action, such as sharing a link to the software or helping others in a forum, earns the user points. Points are then converted into virtual currency and that virtual currency can be used to purchase these time-limited upgrades.

You have to decide how much effort each of these upgrades is worth and then convert the points earned in a sensible way. For instance, if the upgrade is worth $20, you do not want to give it away to someone just for one share!

giffgaff, a mobile network provider, do exactly this with minutes. Support other users on the forum earns you minutes that can be used on your mobile phone.

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