US virtual economy will rake in billions by 2015

Industry watchers predict that the purchase of virtual goods -- i.e those special weapons for Mafia Wars or a fancy ranch house in FarmVille -- will be worth upwards of $5 billion in the next five years. This year, virtual goods are expect to break the $1 billion mark. To put that into perspective, virtual goods sales in Asia -- which have been booming for years -- has already hit the $5 billion mark and continues to expand rapidly.

Venture capitalist Jeremy Liew, whose company has invested millions into virtual goods, tells the BBC that "[t]his is just an exploding part of the gaming business right now ... it is the most exciting area in gaming."

"We have seen companies go from nothing in the last 18-24 months to tens and hundreds of millions of dollars in revenue," Liew says.

It's also interesting to think about how the booming virtual economy has served as a supplement for companies suffering from a lack of advertising sales, as outlined in this Reuters piece. How something like offering microtransactions in FarmVille can be translated to work for ad-starved online media isn't exactly clear, other than, say, paying $.99 for a single story at a popular news site vs. a full subscription for an all-access pass to the same news site.