I don’t play Farmville on Facebook.  I’ve never bought into the Second Life phenomenon or spent any time in World of Warcraft.  And I don’t remotely understand why you would pay to ‘send someone a drink’ on a social network, spending real world cash on a make-believe margarita…

But even though I don’t, millions of people do.  According to Inside Network, the virtual goods market in the U.S. may hit $1.6 billion this year, an estimate that’s a full 160% increase from last year.  Worldwide, that figure could be as high as $10 billion, most of it powered by the confluence of gaming and social networks.  If you need any more evidence that its a new world for commerce, tell that number to Detroit.

I learned all of this through this Yahoo blurb from Forbes.com, which describes how an Australian grad student paid $26,500 for a virtual island within the virtual world Entropia.  That sum puts him atop the Guinness Book for the most valuable virtual object in the world.  It also put him squarely atop my personal dork-o-meter…

–until I read on and learned that he in turn, taxes virtual hunters who use his virtual island game preserve for real world money that currently equals about $100,000 a year.  Suddenly, he looked like a cagey new economy speculator.

Like so many other aspects of modern commerce, what I think doesn’t matter nearly as much as what the market will bear.  So while it doesn’t make a lot of sense to me to spend a few bucks on a piece of make believe armor or a guernsey cow, to the millions who take part in these onlne communities, spending a few hundred bucks to buy a ticket, park your car and freeze your butt off at a Bears game probably makes even less sense.  All things considered, I’d have to admit they’re right.

These micro-economies are simply updates on old favorites like dropping a few quarters in a jukebox or sending someone a postcard.  Individually, they’re frivolous fun.

But collectively, they can wield serious economic clout.

By Dennis Ryan, CCO, Element 79