Fearless Predictions About the Future -- Virtual Goods

For this blog post, I will don my gypsy fortune telling scarf and peer into my crystal ball. I will make some fearless predictions about the internet.

I read an article on CNN a couple of days ago, that said that the Chinese spent $5 billion dollars on virtual goods last year on the internet. The United States accounted for just a billion dollars in virtual goods.

You may read the article by clicking here:

http://edition.cnn.com/2010/BUSINESS/03/15/china.virtual.economy/index.html

Virtual goods are things that you can't hold in your hand. An example is a dress for your online character, or a tattoo for your avatar. You can also buy stuff to cash in on online games to get you to a higher level. I have never understood the virtual goods market, but it is real.

So what are my predictions about the virtual goods marketplace on the Internet. First of all, I am willing to bet that within ten years, someone will come up with an algorithm to de-virtualize them. Someone will figure out how to make digital things into real ones that you can hold in your hand.

I predict that the virtual goods markets will become like the commodities exchange. You will be able to trade the production and derivatives of virtual goods. For example, a company could make an investment vehicle on its goodwill and sell it on the internet. Right now, if Toyota did that, the price would be dropping like a rock.

Someone will also create an online mall where virtual goods from all over the internet can be bought, sold, traded or given away as freebies.

One of the biggest area of virtual goods waiting to be exploited has to do with sports memorabilia and fandom. Celebrities will charge to use their images in avatars. You will be able to buy production digital copies of commercials and movies that don't make the final cut. We will see an explosion and a commercial exploitation of all things digital.

Virtual goods are the ultimate manifestation of cybernetics. It is a field where Louis Kauffman, President of the American Society for Cybernetics said "Cybernetics is the study of systems and processes that interact with themselves and produce themselves from themselves". We live in a brave new world, and the one true characteristic of it, is that it is getting weirder and weirder.