Virtual Reality Makes Real-World Cash, Boosts Self-Esteem

April 16, 2010— -- Last year, a man who goes by the moniker "Sal9000" married the love of his life in a ceremony that was streamed live online. The 27-year-old lives in Tokyo. His bride "Nene" lives inside a Nintendo DS handheld video game.

Sal9000 paid real money to marry a virtual woman, and he is not alone. Well, technically he's not.

Worldwide, millions are offering up their credit cards to create their own avatar in Wee World, advance their criminal empire in Mafia World, or explore, interact and travel in a virtual world in Second life.

Entropia-dot-com boasts a virtual universe with a real-life cash economy. One user bought a virtual space resort for $100,000.

These, and other online games, can be found on myriad sites, including Facebook. They are fueling a rapidly growing $15 billion-a-year industry that is not only transforming the way we interact with our loved ones but changing the advertisement game.

Academic: People Live Out Alternate Lives Online

"It's like Shakespeare, all the world's a stage," said Edward Castronova, a professor of Telecommunications at Indiana University. "Things in the real world are not very good. The online world is this place where people can live out alternate lives and stories."

Castranova is among a growing number of academics closely watching the merger between the real and virtual worlds. He says there is real value in both worlds, and at this point, there is no turning back.

"It is similar to when the Europeans came to the New World," says Castronova. "The lives of those in both places changed forever."

Many unfamiliar with virtual online worlds are initially shocked by the notion of paying real money for "fake" or virtual property. Though, Castronova argues, the decision is not that unusual. Virtual goods also have market value.

Castronova says he would "spend $100,000 on anything" if he believed he could resell it for more.

While this has some social scientists concerned, it has others, particularly in the business world, virtually salivating.

Virtual Worlds Could Be Real Boon for Advertisers

Advertisers spend a third of a trillion dollars annually to induce consumers to buy their products.

The personal engagement experiences provided by online games present an opportunity unmatched by television or many of the other traditional means of advertising.

Last month Audi created an NCAA Basketball tournament bracket for Facebook. It encouraged people to use the site by giving out virtual credits for the popular "vDream" online racing game. The credits allow gamers to enhance their virtual cars and ultimately reveal their own product -- a real-life Audi vehicle.

"You have bidirectional communication with the fan or follower, and that is something that is not possible with TV," said Jason Beckerman, co-founder of socialsuitcase.com. "So you can send out deals to them, and you can have a conversation."

This new way of advertising has nothing to do with spam or pop-ups. Emerging companies, like Social Suitcase, have spotted the opportunity for marketing in online social media and now are helping companies like German carmaker Audi create relatively inexpensive ad campaigns that target specific audiences with a payoff for the consumer.

Farmville, Barn Buddy Attract 100 Million People

"It's all opt-in. It's complete freedom of choice," says Social Suitcase co-founder Joshua Backer. "No one is going to choose to have a telemarketer call them. But you will choose to interact with a brand, if you want to get ahead of a game."

An estimated 100 million people are believed to plant, grow and harvest virtual crops as well as raise livestock on games such as Farmville and Barn Buddy.

In the game "Barn Buddy" you can buy virtual credits with real money, and you can use those virtual credits to buy virtual products sponsored by real companies. The goal is to use these products to improve your virtual farm, while exposing you to the real products and how they work. Are you following?

What's in it for the advertisers? Instead of spending millions of dollars on a Super Bowl commercial, billboard or newspaper ad, integrated campaigns in the social media world are able to target ideal consumer demographics and track precisely how their ad money translates into actual purchases.

Why Spend Real Money in a Pretend Place?

"The idea of spending money on virtual items seems strange at first," said Castronova. "But when you think of it [money] is virtual too. I see a competition emerging from virtual life and real life. Virtual life will remain attractive. But I think real life will start to incorporate some of the things that virtual life is discovering about how to make people happy."

Others fear the problem this may pose is already evident. Some people are already spending more time in virtual places than they are in real life. Sal9000 once said that his avatar wife is better than any human relationship, because she doesn't get angry and that he didn't have to talk about his feelings with her.

This disengagement from reality is causing researchers from Leeds University in England to become concerned. In a recent study, they found respondents with high levels of Internet dependence showed much higher rates of depression.

"What we found is a correlated relationship, which means the two are definitely associated," said Catriona Morrison of Leeds University.

But the key question -- which the Leeds Study fails to determine -- is whether depressed people are drawn to the Internet or does excessive use of the Internet cause one to become depressed?

"Most of us spend an awful lot of time online," says Dr. Morrison. "So for most of us, it's an adaptive activity. The interesting thing is that we do find that people who have an unhealthy relationship with the Internet tend to use it for online gaming, sexually gratifying Web sites, and online communities."

But for some, the fantasy world offers something reality does not. Games like Farmville can keep family and friends connected by allowing family members who live too far away from one another play games with each other remotely and online. In other cases, it helps boost self esteem.

"If you're living in a small town, and you're a girl and you don't have the right body type, you get ostracized. You get marginalized, said Castronova. "I'm not ready to blame that person for trying to have a society that involves an environment where she can actually be accepted."