That question has been a driving force in much of my PhD research, which is finally beginning to reach its conclusion. During this year, I will hopefully have four journal articles published or accepted for publication. I will blog about them here as they come out. Academic publishing can be slow, so some of the stuff that comes out now will have been written two years ago. Fortunately I think all of it is still relevant.
The first article I thought I would blog about is titled Virtual item sales as a revenue model: identifying attributes that drive purchase decisions. It’s due to appear in Electronic Commerce Research 9(1-2). A pre-print version (essentially the same content with a less pleasant layout) of the paper can be downloaded here.
The paper addresses the question of why people buy virtual goods by focusing on what features and attributes of virtual items users are attracted to. Using a qualitative study, a total of nine virtual item attributes are identified and discussed:
- Performance (e.g. speed, hitpoints)
- Functionality (e.g. teleporting)
- Visual appearance and sounds (aesthetic pleasure)
- Background fiction (what role does the item have in the story?)
- Provenance (e.g. did a famous user own this item in the past?)
- Customisability (the ability to personalise the item)
- Cultural references (references to outside culture, e.g. Xmas decorations, national flags)
- Branding (virtual goods branded by real-world companies)
This will by no means be the final word on the subject of why people by virtual items, but I think it’s an improvement over the “useful vs. decorative” model of thinking. It codifies what I have learned from users, developers and other scholars over the recent years. Methodologically, the paper is not a shining exemplar of social science, but it’s been useful to me as a basis for generating hypotheses for quantitative research. I hope developers could also find it handy as a checklist on what things to consider when creating a compelling line-up of virtual goods.
Feedback, as always, is very welcome — especially the most valuable kind, criticism.
Virtual item sales as a revenue model: identifying attributes that drive purchase decisions
Vili Lehdonvirta, Helsinki Institute for Information Technology
Abstract: The global market for virtual items, characters and currencies was estimated to exceed 2.1 Billion USD in 2007. Selling virtual goods for real money is an increasingly common revenue model not only for online games and virtual worlds, but for social networking sites and other mainstream online services as well. What drives consumer spending on virtual items is an increasingly relevant question, but little research has been devoted to the topic so far. Previous literature suggests that demand for virtual items is based on the items’ ability to confer gameplay advantages on one hand, and on the items’ decorative value on the other hand. In this paper, I adopt a perspective from the sociology of consumption and analyse examples from 14 virtual asset platforms to suggest a more detailed set of item attributes that drive virtual item purchase decisions, consisting of functional, hedonic and social attributes.
Keywords: consumer behavior, online communities, business model, purchase drivers, virtual consumption, RMT
Forthcoming (2009) in Electronic Commerce Research 9(1-2), Springer