Comments on: Virtual goods – endless growth? http://www.metaversejournal.com/2009/10/22/virtual-goods-endless-growth/ Coverage of news, issues and events occurring in virtual worlds or those who create those worlds Mon, 06 Feb 2012 15:32:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Lowell Cremorne http://www.metaversejournal.com/2009/10/22/virtual-goods-endless-growth/comment-page-1/#comment-206708 Lowell Cremorne Sat, 31 Oct 2009 00:44:48 +0000 http://www.metaversejournal.com/?p=2355#comment-206708 Thanks for your thoughtful comments Coyle - you raise some fascinating points, particularly around the fact that virtual goods may never be removed at the pricing implications. It's certainly an area that will fascinate marketers and economists alike for quite a while to come! Thanks for your thoughtful comments Coyle – you raise some fascinating points, particularly around the fact that virtual goods may never be removed at the pricing implications. It's certainly an area that will fascinate marketers and economists alike for quite a while to come!

]]> By: Lowell Cremorne http://www.metaversejournal.com/2009/10/22/virtual-goods-endless-growth/comment-page-1/#comment-206627 Lowell Cremorne Fri, 30 Oct 2009 09:44:48 +0000 http://www.metaversejournal.com/?p=2355#comment-206627 Thanks for your thoughtful comments Coyle - you raise some fascinating points, particularly around the fact that virtual goods may never be removed at the pricing implications. It's certainly an area that will fascinate marketers and economists alike for quite a while to come! Thanks for your thoughtful comments Coyle – you raise some fascinating points, particularly around the fact that virtual goods may never be removed at the pricing implications. It's certainly an area that will fascinate marketers and economists alike for quite a while to come!

]]> By: Coyle Brenmann http://www.metaversejournal.com/2009/10/22/virtual-goods-endless-growth/comment-page-1/#comment-206626 Coyle Brenmann Thu, 29 Oct 2009 02:19:29 +0000 http://www.metaversejournal.com/?p=2355#comment-206626 The main problem I have come to realize with the growth of virtual goods, is the lack of entry and exit barriers within virtual markets. The lack of these barriers, as compared to real life business barriers (such as capital requirements to start up a business, or sale of all its assets to pay off lenders when the party's over), leads to ever-decreasing prices of goods over time as older products never go away and their prices continually lowered until they are offered for free. How do you fairly price a new virtual product on Internet catalogs offering virtual goods, when the competition's products are never removed?<br><br>Endless growth also presents its own problem, as the range of substitute and alternative products within a market continually increases in number. In the real world, businesses that fold also have their products removed from the shelves. This allows new products (from stronger companies) to be priced more accurately to their cost and profit margin expectations because the range of substitutes is managed. There are not practices currently in Internet catalogs offering virtual goods, to provide the same level of entry and exit barrier controls. To learn more about this problem, please read my article on <a href="http://metaverse4biz.newsminded.com" rel="nofollow">metaverse4biz.newsminded.com</a> titled Competitive Forces: Virtual Product Pricing & Life-Cycle. The main problem I have come to realize with the growth of virtual goods, is the lack of entry and exit barriers within virtual markets. The lack of these barriers, as compared to real life business barriers (such as capital requirements to start up a business, or sale of all its assets to pay off lenders when the party's over), leads to ever-decreasing prices of goods over time as older products never go away and their prices continually lowered until they are offered for free. How do you fairly price a new virtual product on Internet catalogs offering virtual goods, when the competition's products are never removed?

Endless growth also presents its own problem, as the range of substitute and alternative products within a market continually increases in number. In the real world, businesses that fold also have their products removed from the shelves. This allows new products (from stronger companies) to be priced more accurately to their cost and profit margin expectations because the range of substitutes is managed. There are not practices currently in Internet catalogs offering virtual goods, to provide the same level of entry and exit barrier controls. To learn more about this problem, please read my article on metaverse4biz.newsminded.com titled Competitive Forces: Virtual Product Pricing & Life-Cycle.

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