How does virtual currency work in online games?

It is very interesting to see how the virtual currency work in online games, as it provides better understanding especially for those who are unfamiliar with it. It also can see that virtual currency is not only use by the gamers to improve their character or buying equipments, but they can also earn actual money from here. So now let's look at the examples for more information.


Example 1: (Pipeline, 2005)


- For e.g. Sony Online Entertainment’s Everquest II game, players are allowed to use credit cards to improve the virtual character (replace swords and other virtual loot) through the game’s new Station Exchange service.
- Players can purchase other players’ item, preplayed powerful character as well as currency where the players do not have to spend much time on it.
- These virtual goods are available on eBay-style auction sites or game companies.


Example 2: (Richard H, 2010)


- In many MMORPGs (massively multiplayer online role-playing games) like World of Warcraft and EverQuest II, they have virtual economy other than virtual items like houses, landscapes, and different characters.
- Whenever the players have piled up their currency by killing monster, mining, and cutting timer, they can sell their virtual resources (gold) on the websites through PayPal or any other services in order to buy foreign exchange in the virtual world.
- World of Warcraft: 1000 gold units = $10, which is almost equivalent as yen-to-dollar exchange rate.


References:
David, M 2005, ‘Virtual currency’, PC Magazine, vol, 24, no. 11, EBSCOhost, Computers & Applied Sciences Complete, AN 17204142, viewed 10 September 2010.


Richard, H 2010, ‘Real money from virtual worlds’, Scientific American, vol. 302, no. 1, EBSCOhost, Computers & Applied Sciences Complete, AN 45692997, viewed 10 September 2010.