The Future Is Virtual
BusinessWeek covers the Kart Rider phenomenon which has swept over South Korea. Kart Rider is an online game which allows players to race against each other. Nothing too innovative there. But what is innovative is how its developer, Nexon, makes its money.
You can play the game for free, but you have to pay real money to acquire virtual items, including your car, its paint job, and various weapons and defenses.
In 2004, Nexon had revenues of $110 million, 85% from the sale of virtual items.
It's gotten to the point where races are being broadcast on television, and some of the best drivers are being paid to add virtual logos to their virtual cars.
I can't help but feel that this is the model for the future. Rather than force people to commit to a subscription, simply sell the gear that allows them to compete. It's like being able to start a war to sell weapons to the combatants!
Some may say, "but why would people pay for useless and intangible items?" For enjoyment. There's no productive reason to spend money on going to the movies, or to pay for cable TV. At least virtual worlds are interactive and social.
If anything, cultural critics should look to the rise of virtual worlds as the solution to the "Bowling Alone" phenomenon.