Human brain in not specialized to differentiate between what is “real” and what is “virtual”. So, virtual currency gets a person to react similar to real currency.

Top reasons why virtual economy matters in the online world.

1. Creativity - Self expression has become very important. People like to create their avatars. These avatars can have clothes, houses and accessories.

2. Recreation: People look at virtual economy as being in a fantasy world. When they use virtual economy people believe they are going on vacation.

3. You: It is all about YOU. It is YOU build YOU. It is like a online hangout. Check out: Gaia

So, virtual goods build the next era of virtual economy. People spend a lot of money on hobby…so if they get engaged then they spend money like they do in real hobbies.