A fascinating aspect in the economy of virtual worlds is the fact that - once a product has been designed - production costs are nearly zero. Some people usually wonder how an economy can work at all, when production costs (and distribution costs, too) fall to zero. Would this lead to everything being offered for free? Certainly not, as the economy in virtual worlds like Second Life, There or IMVU tells us.
But is this 'realistic"? Does this have any relevance for the 'real' (?) economy? Can we learn anything from virtual worlds economies under such unrealistic assumptions? We certainly can!
In many industries, productions costs are rapidly dwindling too, and there already is a flourishing industry selling digital goods like music, movies, ringtones etc. And all those items are NOT being offered for free. Why? And how will these prices will develop in the future? What will happen with other types of products which can be manufactured at ever dwindling costs (for different reasons)?
If you are interested in science fiction or some of the more futuristic technologies like nano-tech manufacturing you might have heard about the theory, that nano-assemblers will - one day - be able, to create ANY material object from raw materials available in abundance. The idea is to directly manipulate single molecules or molecular building blocks (like depicted in the picture to the right; Source: Foresight Institute).
While it is NOT certain, that nano-tech manufacturing will be possible ever ... if it became possible, it would certainly change the production industry in a dramatic way: the production cost for nearly all physical goods would shrink dramatically. Just Science Fiction? Maybe ...
But is interesting, to think about these ideas. If you want more food for thought, read Snowcrashing Into The Diamond Age 2 (Part Two) by Extropia DaSilva. Warning: Extropia, like Gwyneth Llewelyn, who published this text, has a tendency to produce long and winding texts. It is well worth the time to digest this essay, though.
While I am not saying that nano-tech manufacturing is right around the corner - it is certainly interesting to think about the parallels between such an economy and the economy of virtual worlds (or industries like music and entertainment already today). Virtual worlds might be an exciting training ground on which to test business models for the "real" world.