Vili Lehdonvirta

Lehdonvirta Virtual Consumption thesis cover imageThis is an html version of the introductory part of a doctoral dissertation originally published in print (ISBN: 978-952-249-019-3) and and as a pdf file (ISBN: 978-952-249-020-9) by Turku School of Economics, Finland. Suggested citation: Lehdonvirta, V. (2009) Virtual Consumption. Publications of the Turku School of Economics A-11:2009. Turku: Turku School of Economics.

Advisor: Professor Terhi-Anna Wilska, Turku School of Economics
Opponent: Professor Celia Lury, Goldsmiths, University of London
Examiners: Professor Sang-Min Whang, Yonsei University; Dr Pasi Pyöriä, University of Tampere

(photos from the public defence, courtesy of Olli Pitkänen)


Millions of people are spending time and money on virtual goods: clothes for their characters in online hangouts, weapons for their fighters in massively-multiplayer games, and presents for their friends in social networking platforms. In this dissertation, I locate virtual goods as the latest step in an overall digitalisation of consumption, and examine the reasons behind this ”virtual consumption” through data gathered from some of its primary arenas. The dissertation is positioned in the sociology of consumption and also addresses recent streams of scholarship on ICT and society. In popular discourse, spending real money on virtual goods is frequently attributed to Internet addiction and manipulation by marketers. The results of this dissertation suggest that the fundamental drivers of virtual consumption are rather found in individuals’ social and hedonic motivations. In online spaces, virtual goods function as markers of status, elements of identity and means towards ends in the same way as material consumer goods do in similarly contrived physical spaces. The impact of virtual goods is not limited to virtual communities, however, because pre-existing social relations are also increasingly acted out in online spaces. Survey data is used to argue that spending on virtual goods is linked to participants’ economic and socio-demographic backgrounds. The resulting digitalisation of consumption can potentially have significant implications for the global economy and the ecological sustainability of consumer culture.


Keywords: consumer behaviour, online communities, cross-cultural study, electronic commerce, dematerialisation of consumption, ethics of consumption




1    Introduction................................................................................................ 9

1.1     Why virtual consumption?................................................................... 9

1.2     Background: conflicting views, contrasting theories..................... 10

1.3     Research questions and methodology.............................................. 15

1.4     Structure of this dissertation.............................................................. 18

2    Theoretical approaches to consumption in social sciences  21

2.1     Consumption in economics................................................................. 21

2.1.1 Classical notions of consumption..................................................... 22

2.1.2 Modern consumer theory................................................................. 23

2.1.3 Utility, price and value.................................................................... 24

2.1.4 Economics and virtual consumption................................................ 25

2.1.5 Limits of the economic approach: Castronova’s puzzles.................. 27

2.2     Substantive approaches to consumption: why do people buy?... 29

2.2.1 Consumption as satisfaction of needs............................................... 30

2.2.2 Consumption and social status......................................................... 31

2.2.3 Consumption and identity................................................................ 34

2.2.4 Consumption as art and experience.................................................. 37

2.2.5 Production of consumption............................................................. 38

2.3     Consumption across cultures............................................................. 40

3    Virtual consumption............................................................................ 43

3.1     Being social online............................................................................... 43

3.1.1 Virtual identities in virtual bodies..................................................... 44

3.1.2 Communities of interest.................................................................. 46

3.1.3 From medium to space..................................................................... 47

3.1.4 The fallacy of virtual society........................................................... 49

3.2     Digitalisation of consumption: three waves..................................... 51

3.2.1 Shopping online............................................................................... 52

3.2.2 The participatory wave................................................................... 54

3.2.3 The third wave: virtual consumption............................................... 56

3.3     Virtual consumption and social status.............................................. 59

3.3.1 Crisis in a traditional online economy.............................................. 59

3.3.2 Jockeying for positions in an online market economy..................... 63

3.4     Virtual consumption, identity and experience.................................. 66

3.5     Designing spaces, producing needs................................................. 69

3.6     Social networks and the offline impact of virtual consumption.... 71

4    Conclusions and discussion............................................................. 75

4.1     Virtual goods are real........................................................................... 75

4.2     Consumption as a game....................................................................... 77

4.3     Digital post-materialism versus virtual matter.................................. 80

4.4     Ethical perspectives on virtual consumption................................... 83

4.4.1 Economic prosperity....................................................................... 83

4.4.2 Dematerialisation and social integrity.............................................. 85

4.4.3 Environmental sustainability........................................................... 87

References........................................................................................................... 91



ARTICLE ONE: Lehdonvirta, V. Virtual Worlds Don't Exist. [later published as: Lehdonvirta, V. (2010) Virtual Worlds Don't Exist: Questioning the Dichotomous Approach in MMO Studies. Game Studies, vol. 10, no. 1.]


ARTICLE TWO: Lehdonvirta, V. – Wilska, T.-A. – Johnson, M. (2009) Virtual Consumerism: Case Habbo Hotel. Information, Communication & Society, Vol. 12, No: 7, 1059-1079.


ARTICLE THREE: Lehdonvirta, V. (2009) Virtual Item Sales as a Revenue Model: Identifying Attributes that Drive Purchase Decisions. Electronic Commerce Research, Vol. 9, No: 1, 97-113.


ARTICLE FOUR: Lehdonvirta, V. Who Buys Virtual Goods? A Cross-Cultural Survey of Habbo Users (unpublished; see original pdf version of the thesis)


ARTICLE FIVE: Lehdonvirta, V. (2008) Real-Money Trade of Virtual Assets: New Strategies for Virtual World Operators. In: Virtual Worlds, ed. by M. Ipe, 113-137. Icfai University Press: Hyderabad.


1                 Introduction

1.1             Why virtual consumption?

Millions of people are spending time and money on virtual goods: clothes for their characters in online hangouts, weapons for their fighters in massively-multiplayer games, and presents for their friends in social networking platforms. This market did not exist ten years ago, and today it is estimated to be worth billions of U.S. Dollars (Lehtiniemi & Lehdonvirta 2007).

This way of spending is distinct from the more recognised forms of electronic commerce: the sales of goods, services and information. Unlike goods, virtual goods do not need to be shipped. Unlike services, virtual assets are not perishable and can be re-sold. And unlike information goods (such as music, software and news), virtual goods are rivalrous: one person’s use of a virtual good excludes others from using it. What are being bought and sold on the virtual goods markets are therefore not data, services or objects, but permissions: the exclusive right to use this feature or that corner of an online environment frequented by thousands of people.

This study is intended to be the first thorough sociological analysis of this new mode of consumption, which is termed virtual consumption. The study of virtual consumption is relevant and topical to social scientists for several reasons: Firstly, it seems to be an archetype of the so-called “dematerialisation” of consumption, which has become a prevailing topic in the sociology of consumption. Secondly, virtual consumption seems to be a prime example of the process that contemporary scholars of media and consumer culture have variously termed as materialisation, thingification or commodification of media and culture. Thirdly, virtual consumption is an important aspect of the general trend of increased adoption of information and communication technologies (ICTs) in society. The extent and manner of the penetration of digital networks and mediated experiences into everyday life depends greatly on their ability to direct revenue flows to companies operating the services. The study of the possibilities and potentials of virtual consumption therefore affords a window to the future of market-driven developments in a networked society. Finally, the study of alternative economies and consumption styles such as virtual consumption is made extremely pertinent today by the economic and ecological crises so acutely facing mainstream consumer culture.

The theoretical and methodological approach in this study is based on linking the phenomenon at hand to the long tradition of consumption-related scholarship in the disciplines of sociology and economics. But can real-money trade of virtual goods be considered as consumption in the first place? The literal meaning of “consumption” is using up, destroying or eating something, which indicates that in economic terms, objects have life cycles: first they are produced, then exchanged with money, and finally consumed, until they disappear or fade and lose their value (Wilk 2004, pp. 15-17). In the present phenomenon, nothing is consumed in the sense of something tangible being destroyed, expended, used up, worn down or eaten (with the notable exception of electric power). Indeed, Internet-related scholarship typically emphasises the intangible and intellectual nature of online activity, postulating a break with traditional models instead of seeking continuity with them. New economy, digital economy, prosumers, peer production, long tail and tuángòu are some of the recently developed notions used to describe economy and exchange on the Internet (e.g., Castells 2000; Tapscott & Williams 2006; Anderson 2006; Montlake 2007). They are contrasted with the materialist, dumb, inflexible or even destructive nature of traditional consumption.

However, even with regard to traditional consumption, materialistic and processual explanations are not always appropriate. Objects do not necessarily lose their value when used (e.g. antique, jewelry or collectibles), and they can be used several times. The value of goods may be based on non-existing properties (e.g. stock markets). Many objects also have different “social lives”, which means that their use may change over time (Wilk 2004; Appadurai 1986; Douglas and Isherwood 1978). As more culturally oriented views of the economy have been adopted in social sciences, consumption has come to be understood more widely: focus has shifted from literal using up towards experiences, meanings and processes involving people and goods (Featherstone 1991, p. 85). As practical quantitative measures of consumption, scholars observe the allocation of time and money. From this perspective, there is no difficulty in considering real-money trade of virtual goods as a form of consumption.

1.2             Background: conflicting views, contrasting theories

As virtual consumption has become more common, adopted first by gamers, teenagers, and gradually by some in the older age groups, it has broken into mainstream consciousness. What was previously the obscure hobby of a few Internet-savvy youth, is now a topic of discussion among parents, in mainstream media, and among regulators. The virtual consumers themselves were probably never very introspective about their spending behaviour, nor did they feel a need to: in a way, they were acting like the “homo economicus”, making rational choices based on their preferences, however outlandish those preferences may have seemed to others. On the contrary, the first sites of virtual consumption might even have thrived in their impenetrability, like subcultures of earlier decades. But the outsiders, the parents, the media and the regulators, became interested in this new phenomenon that seems to have taken over their dependents, and are keen on presenting their views on it – or passing judgement, as the case often is.

Many of the typical views on virtual consumption that one encounters in the mainstream discussions are summarised in the quotes below. The quotes are taken from readers’ comments to an article related to virtual consumption published in the online version of the Finnish newpaper Helsingin Sanomat on March 23, 2008.[1]


It is completely insane to pay for something that in reality does not exist. – Garibaldi


Consider what better and real reality you could have gotten for that money. – nettimella


Why can’t virtual coins be free? It’s pointless to pay for virtual stuff when it could just as well be free. – Miks


Children can’t calculate while they play, and even adults sometimes get so immersed in the game that they forget reality. – nettimella


Children are victims of consumer culture and become blind to the concept of money, no longer realising its value. I think the ethicality of this needs to be considered, not just how to make money [with it].


Previously you couldn’t abuse children in business like this. It’s incredible that Finland is a major player in this immoral practice. I wonder how many Finns’ income depends on getting children to consume the most foolish things! – mummo


[Selling virtual goods] represents taking advantage of children both economically and psychologically. – Renée


The comments above exemplify a number of common views held towards virtual consumption that question the rationality of spending money on virtual goods. Virtual goods are typically seen as illusory, imaginary, unreal or even nonexistent. They are contrasted with “real” goods, which are rational, useful and valuable. Something real is better than something virtual. According to this view, virtual goods are not worth anything, either because of their ephemeral nature, or because they are digital, and digital image flows are reproducible without cost. Spending real money on virtual goods is therefore considered irrational.

Another view exemplified above posits that virtual consumers are so immersed in the virtual environment that they can no longer think rationally. They become addicted to the environment, the goods, or the act of virtual shopping, and spend money on virtual goods mindlessly. Virtual consumption is comparable to a dangerous drug: individuals feel compelled to indulge in it despite the fact that it causes more harm than good.

Finally, there is a strong belief that virtual consumers are, in fact, children: both literally as well as in the sense of being gullible and susceptible to exploitation by ruthless commercial interests. Virtual goods vendors entice immature minds, not yet able to distinguish between real and make-believe, into giving away their money for nothing. Selling virtual goods is therefore highly immoral. On a societal level, companies and marketers are brainwashing children into virtual consumers, making them see value in virtual goods and desire pointless virtual possessions. The result of this capitalist indoctrination is another generation of loyal consumers, this time in the virtual sphere.

It is probably safe to say that the above views, highly critical of virtual consumption, are often arrived at without substantial study or experience of the actual practices of virtual consumption. They are outsider impressions. The insiders, the virtual consumers themselves, obviously have substantial experience and embodied knowledge regarding the actual practices as well as the meanings and motivations behind virtual consumption. But they lack the motivation and perhaps also the capability and analytical distance to express these in a form that could be digested by parents, regulators and mainstream media, and thus fail to contribute to a debate on virtual consumption.

What is at stake in this debate? From a societal perspective, the spending of real money on virtual goods, as an emerging phenomenon, does not have an established position in society. It could be characterised as “gaming”, which carries with it certain meanings and places it in a certain ethical frame: recreational spending, leisure, but also frivolousness, distraction and even addiction. It could also be characterised as a form of “online shopping”: economic activity, conventional, legal, but also hedonistic and subject to a different set of ethical concerns. And it could also be characterised as “exploitation”, as above.

The way in which authorities such as regulators and parents conceptualise (or fail to conceptualise) virtual consumption has very practical implications for the people involved, individuals as well as companies. For example, whether parents see virtual consumption as “masculine” technology consumption or “feminine” adornment will greatly influence the ability of young consumers of different genders to participate in it. And whether society sees virtual consumption as something legitimate and desirable or something irrational and subversive will greatly shape its uptake. In Korea, the National Assembly has passed a law that makes certain types of real-money trading of virtual goods illegal (Yoon 2007). In Finland, complaints from parents lead the consumer ombudsman, a public official, to call negotiations with Sulake, a company operating an online hangout popular among teenagers (Consumer Agency 2004). Consequently, Sulake now imposes a weekly limit on the amount of money its customers can spend on virtual goods. The limit varies from country to country. According to Sulake, the spending cap is set to correspond approximately with the local price of a cinema ticket (Grönholm & Haapanen 2008). That the price of a cinema ticket is considered an “appropriate” level of virtual consumption suggests that it is conceptualised as a leisure activity, spending on perishables as opposed to durables, and perhaps associated with cultural activities and spending time with friends.

The epistemological starting point of this study is that beyond all these different constructions of virtual consumption, there is also an objective reality of which it is possible to obtain indirect knowledge through empirical methods. This reality consists not only of the physical world of natural sciences, but also of the human world of subjective meanings and intentions that underpin actors’ externally observable behaviour. In this view, phenomena are seen as socially situated but not socially determined, maintaining the possibility of objective critique of both actions and beliefs. By providing an empirically-based account that strives towards objectivity, or is at the very least external to the existing viewpoints, I hope to contribute to the debate on the nature of the phenomenon in a way that helps participants see the matter clearly and judge virtual consumption on its merits.

The strategy adopted in this study when empirical observations are to be explained as manifestations of reality falls under the amorphous category of sociology. This strategy is contrasted with and complemented by the rational choice approach associated with economics. The difference between these two general approaches, in the idealised form thought of here, can be briefly summarised as follows, after Therborn (1991) and Räsänen (2004). The economic approach assumes that all individuals act according to the same rules of interest and rationality, so that variance in behaviour is explained mainly by variance in external conditions and constraints. For instance, the reproduction of social class from generation to generation might be explained as the consequence of economic constraints facing disadvantaged children, making it impossible for them to pursue a strategy of education and social advancement. Given equal opportunity, it is thought that every person would pursue a utility-maximising strategy of advancement and leisure, the exact mix depending on individual preferences.

The sociological approach, in contrast, de-emphasises external constraints and seeks to explain choices and outcomes primarily by reference to variance in the actors themselves, and in particular the actors’ positions and roles in different social structures and groups. Describing the concrete mechanisms through which actors’ attributes are thought to affect choices and outcomes is a key concern. For instance, the reproduction of social class might be explained as the consequence of values and norms absorbed by children from their parents, leading working class children and middle-class children to make systematically different choices regarding education, irrespective of their economic standing. In practice, the two approaches can be combined, so that individuals are assumed to be exercising rational choice –based agency within the limits afforded by their structural positions (Räsänen 2004). This approximates the explanatory strategy followed in this dissertation.

Applying a sociological approach to subject areas that are traditionally considered “economic” is sometimes termed economic sociology. The contemporary school of self-identified economic sociologists in North America has, however, focused on the production side of economic life, paying relatively little attention to consumption (Zelizer 2002a). The literature that this study draws on for sociological theories of consumption centers on the work of contemporary British scholars and some of their continental predecessors. With the help of computer-mediated communication literature that establishes online spaces as capable of sustaining social relationships and social aggregates, these theories can be applied in the virtual domain. The dissertation also places established social scientific accounts of consumption in something of a contrast with a mushrooming literature on Internet-based consumer behaviour, which emphasises a post-materialistic ethos and active participation by consumers.

1.3             Research questions and methodology

In this section, I introduce the research questions, scope and methods used in this study. The overall purpose of the study is to provide an informed account of the main characteristics of virtual consumption so that it can be assessed on its merits and compared to other fields of human activity. The main task is therefore to explain the most controversial aspect of the phenomenon: why do people spend real money on virtual goods? This primary research question is divided into secondary research questions as follows:


RQ 1: What kind of benefits do virtual consumers experience from virtual goods?


Under the rational choice model, it is necessary to assume that virtual consumers believe they are obtaining some kind of benefit from spending on virtual goods that justifies this spending over all possible alternative uses of time and money. In order to understand why they might think so, it is natural to ask what such benefits might be. On the other hand, in the previous section it was suggested that rational choices are not the whole story. The fact that virtual consumption seems to be centered around online hangouts and other sites of social intercourse leads us to suspect that it may also be shaped by social norms and structures, against which the preferences of individual actors might appear as no more than fluctuations in an overall pattern. A second question is thus formulated as follows:


RQ 2: What kind of social structures promote and regulate virtual consumption?


Finally, it is obvious that the companies operating the online hangouts and other sites of virtual consumption (referred to as the operators from hereon) play a part in giving rise to the whole phenomenon, but the mechanisms through which they do so must be elucidated before it is possible for anyone to judge them as ruthless exploiters any more than praise them as faithful servants of consumers’ tastes. While recognising that it is impossible to deal with this topic in a conclusive way within the limits of this dissertation, I put forward the following research question:


RQ 3: What is the role of operators in promoting and regulating virtual consumption?


Social sciences offer several possible methodological approaches to generating answers to these questions. Empirical research methods are often classified into three broad categories: qualitative, quantitative and mixed-methods approaches (Creswell 2003). According to Töttö (2004), it is, however, more accurate to speak of research based on textual materials, research based on measurement results, and research that utilises both types of data. The rationale for choosing one method over the other is based on its suitability for the purpose and context of the study, including its epistemological and ontological stance towards the subject matter (Creswell 2003, pp. 5-12).

In a realist ontology, materials represented in textual form, such as field notes and interview transcripts (and understood broadly, also audiovisual material such as drawings and advertisements) are useful for answering questions about subjects’ cognitive state: meanings, intentions and beliefs held by an individual or a group of people (Töttö 2004, pp. 13-14). Inasmuch as this study is concerned with uncovering objects in the human world, particularly beliefs held by subjects regarding benefits that can be derived from virtual goods, as well as social structures such as groups and norms, its analyses should therefore be based on some kind of textual materials.

Materials consisting of measurement results, such as survey responses, are useful for answering questions about the frequency of some attribute within a given population, for uncovering dependencies between attributes, and for lending support to theories concerning causal mechanisms (Töttö 2004, pp. 14-15). Inasmuch as this research aims to uncover dependencies and propose causal mechanisms regarding how social structures and decisions made by the operator affect virtual consumer behaviour, its analyses should be supported by some kind of measurement results.

The notion of frequency brings up the question of scope and generalisability. As a practical matter, no research methods can capture a phenomenon called “virtual consumption” as a whole, because there is no way to obtain a representative sample of all “virtual consumers”. Nor would we be very interested in the average attributes of such a huge and arbitrarily defined group (does it include everyone who has once purchased a virtual good, or regularly purchases virtual goods, or perhaps regularly visits sites of virtual consumption?). Instead, the answers given in the articles constituting this dissertation address specific cases of varying breadth, situated in a limited span of time and space. Towards the end of this introductory part of the dissertation, these answers are collected together and synthesised, but the synthesis is not so much a generalisation to some unknown population as it is an ideal type: a reference point against which some observations compare better and some worse. This is similar to, for example, the notion of fashion, of which a great deal is known even though its exact boundaries have never been discovered.

Textual materials used in this study were collected through the following methods: non-participant observation (“cultural entreé”); capturing texts published on the Internet by users and operators (“online fieldnotes”); participant observation and informal chats with users, both computer-mediated and face-to-face (“cultural immersion”); and formal interviews with users, operators and professional virtual goods traders. As signalled by the terms I have placed in parenthesis above, this palette is similar to the methods used by cultural antropologists when writing ethnographies of cultures and communities, and is indeed sometimes understood as an application or modification of the ethnographic strategy to the “online world” (Kozinets 1997; Markham 1998; Maclaran et al. 2004). For example, Kozinets has coined the term netnography, which he defines as follows:


[A] written account resulting from fieldwork studying the cultures and communities that emerge from online, computer-mediated or Internet-based communications, where both the fieldwork and the textual account are methodologically informed by the traditions and techniques of cultural anthropology. (Kozinets 1997, p. 470)


In addition to the data collection methods, this strategy involves a general approach to interpreting the data and representing the findings in a way that, among other things, acknowledges and takes into account the subjective role of the researcher (Maclaran et al. 2004, p. 155).

However, Miller and Slater (2000) are critical of an Internet ethnography conceived entirely as the study of online “communities” and relationships. Their own ethnography of Internet use in Trinidad describes the use of online services as being highly embedded in existing practices and communities, such as family and church, as opposed to forming new communities and relationships that are detached from the rest of the society. However, to some extent this must reflect the fact that only basic services such as email and instant messaging were available to Trini users, more immersive virtual environments being absent. The question of “emergent” versus “embedded” aspects of online life will be dealt with in detail in section 3.1. In the context of methodology, it suffices to say that the materials used in this study address both aspects to a degree, by including data about subjects’ online behaviour as well as some data on real-life background variables.

Measurement results or quantitative data is represented in this study by the results of an online survey of the users of three localised online hangouts: Habbo UK, Habbo Spain and Habbo Japan, all operated by Sulake Corporation. The survey was administered as a trilingual online survey with the assistance of Sulake employees in July 2008. The survey attracted 11255 responses, of which 5288 responses were selected for analysis in article four of this dissertation. Due to the data collection method used, it is not possible to estimate response rate, but the respondents’ gender and age distributions are consistent with the results of a recent larger survey of Habbo users (Sulake 2008).

The main statistical method used in article four is logistic regression. A series of logistic regression models are constructed to test hypotheses regarding the influence of factors such as socio-demographic structures and usage style on virtual consumer behaviour. Logistic regression was chosen because it operates with categorical dependent variables and does not require that the variables are normally distributed (Hair et al. 2006, pp. 355-368). Additional details regarding the survey data and the statistical methods used are provided in article four.

Finally, this study involves research not only on the objects of the human world, but also on the rules, objects and landscapes, the “virtual architecture”, of online spaces. Miller and Slater argue against making this distinction, lest it lead into Latour’s pitfalls of “sociologism” and “technologism” (2000, pp. 8-9). Although in this study the two are seen as existing separately of each other, the main method through which we encounter and understand architecture in the discussions below is through its involvement in the practices of the human world, rather than through a “natural science” of re-discovering and classifying technological artefacts for their own sake.

1.4             Structure of this dissertation

This dissertation consists of a collection of five scientific articles on the topic of virtual consumption, preceded by this introductory part. The purpose of this introductory part is to introduce and motivate the research problem, to position the work within the field of social sciences, to introduce the methods used, and to present the main results and the conclusions that can be drawn from them.

The introductory part is organised into four major sections. In this first section, I introduced and motivated the problem area and the methods used. In the second section, titled Theoretical approaches to consumption in social sciences, I will place the dissertation in context with related work in social sciences and describe the theoretical approach adopted in this research. In the third section, titled Virtual consumption, I provide background on the phenomenon under scrutiny and synthesise the main empirical results of this study into four subsections. In the final section, I present conclusions from these results and discuss the resulting notion of virtual consumption in a larger societal context, in a subsection titled Ethical perspectives on virtual consumption.


2                 Theoretical approaches to consumption in social sciences

In this section, I will review the most important perspectives into understanding and explaining consumption behaviour in social sciences. Understaning refers to the meanings attached to consumption, possibly with some ethical colour. For example, consumption behaviour can be understood as the exercise of free will, or as the result of manipulation. Explaining refers to identifying causal relationships that result in a given type of consumption behaviour. The perspectives presented here combine aspects of understanding with aspects of explaining to form general theoretical approaches of consumption.

I begin with economic perspectives to consumption, from classical notions of consumption to modern consumer theory. I then make a detour to some studies where economics is applied to virtual consumption. The aim is to situate this work in relation to these earlier efforts, and to illustrate the limitations of the canonical economic approach in this domain. Armed with this understanding, I turn to more substantive, socially situated theories of consumption, which will act as the theoretical basis of this work. I introduce five different approaches from the sociology of consumption to answering the question, “why do people buy?” Finally, I consider the effect of culture on consumption to support the global perspective of this work.

2.1             Consumption in economics

It is fitting to begin a review of theories of consumption from economics, because the early political economists of the eighteenth and nineteenth centuries are precursors not only to modern economists, but arguably also to some of the more sociological approaches to consumption. This claim is based on the fact that classical political economists analysed economic processes in connection with what would today be called their political and social context. Later economists began to construct the economy as an autonomous sphere, achieving great clarity and rigour in their theories, but sometimes setting aside the commitment to empirical validity.

2.1.1       Classical notions of consumption

The latin word “consumere” is a combination of the prefix “con-”, meaning “altogether”, and “sumere”, “to take up”. Until the eighteenth century, the word meant waste, using up, as in consumed by fire, or consumption as a wasting disease (Porter 1993). According to Slater (1997), in the Western political economy and proto-economic thought of the premodern and Mercantilist eras, consumption was regarded as a loss, a departure of value from the society. It was a regrettable and undesirable thing, particularly when indulged in by the lower classes. Higher classes could use extravagant consumption as a means to display their status, but in doing so they were deviating from virtue as opposed to performing a duty or contributing to the functioning of the society. The view of consumption as a loss can be seen as reflecting the economic stagnation and slow economic growth of the those eras. Under such conditions, economy was easily seen as a zero-sum game, where success is measured in durable wealth, such as gold bullion. Purchase, payment and subsequent consumption represented a one-directional transfer of wealth from one party to another. Consumption, the using up of goods, was therefore a losing strategy.

Towards the end of the eighteenth century, hand-in-hand with the progress of industrialisation and the onset of rapid economic growth, classical political economists such as Bernard Mandeville and Adam Smith brought about a radical refashioning of the concept of consumption. Consumption was redefined as demand: the driving force behind economic expansion. A famous quote from Smith posits that “consumption is the sole end and purpose of all production” (Smith 2009 [1776]). Consumption was no longer a vice, an infraction, a deviation, but the natural counterpart of production in the construction of a thriving economy and society. The economic redefinition of consumption proceeded hand-in-hand with a moral redefinition. The idea of the consumer as exercising his sovereign free will by making judicious choices on the market resonated well with the ideals of Enlightenment thinking (Slater 1997, p. 38-39).

In the utilitarianist school of thought, instigated by Jeremy Bentham (1748-1832), all the diverse benefits and downsides of consumption were reduced to a single, measurable entity known as utility. This idea was appealing to early economists, because it allowed comparisons to be made between otherwise incommensurable goods and provided a theoretical basis for the use of prices as a mechanism of social coordination (Slater 1997, p. 45-46). Economists such as John Stuart Mill and Francis Edgeworth used the concept of utility to theorise consumer behaviour (Jehle & Reny 2001, p. 5). Assuming that each good carries with it a certain amount of utility, and that the consumer is a being that seeks to maximise their utility, it is possible to predict which goods the consumer prefers to spend their money on. In this context was also born the notion of the rational consumer as the one who behaves in a way that maximises utility, in contrast to the irrational consumer who allocates their money in a less than optimal way.

2.1.2       Modern consumer theory

In modern mainstream microeconomics, theoretical ideas regarding consumption have evolved into a coherent, canonical theory known as consumer theory. The final form of the standard theory is attributed to Debreu (1959). It is “a bedrock foundation on which so many theoretical structures in economics are built” (Jehle & Reny 2001, p. 3). In practice, it consists of a number of axioms and theorems expressed in mathematical notation that allow far-reaching conclusions to be derived from a small set of starting assumptions.

What follows is a brief summary of the relevant features of modern consumer theory following Jehle and Reny (2001). Despite the name, modern consumer theory is essentially a general theory of choice that has been applied to a wide range of behaviours from shopping to voting. It places the consumer in a theoretical situation where they are presented with all the goods available in the economy and asked to decide how much of each good to purchase. This “shopping basket” containing an arbitrary quantity of each good is called a consumption bundle. Given a set of assumptions, consumer theory predicts which of all the possible consumption bundles the consumer ends up choosing.

A key assumption is that the consumer seeks to select the consumption bundle that is “most preferred in the light of his personal tastes” (Jehle & Reny 2001, p. 5). It is assumed that for each possible pair of consumption bundles, the consumer either prefers one of the bundles or is indifferent about them. This is called the preference relation. The preference relation is a given: something that each consumer is expected to have at the outset and that remains unchanged throughout. Consumer theory does not attempt to say anything about where consumer preferences come from or what they are like, with the important exception that it expects them to satisfy a number of assumptions, known as the axioms of consumer choice. As will be seen later, the most important of these axioms for the purposes of this discussion is strict monotonicity: the idea that, other things being the same, more of a good is always better than less.

One notable use of this model of consumer behaviour is to derive demand curves that indicate how prices of goods affect the quantity demanded. Together with supply curves derived from another branch of microeconomics, the theory of the firm, demand curves can be used to predict and explain changes in prices and quantities of goods traded on the market. For example, classical economists could not explain why an increase in the price of potatoes in nineteenth century Ireland lead to an increase in their demand. The contemporary “law of demand” stated that an increase in price should always result in a decrease in the quantity demanded. The modern theory is able to account for this so-called Giffen’s paradox: an increase in the price of potatoes lead to an increase in their demand, because peasants could no longer afford other, more expensive foods, and thus had to focus more of their consumption on potatoes (Jehle & Reny 2001, p. 54).

2.1.3       Utility, price and value

As the above discussion indicates, modern consumer theory no longer derives consumer preferences from the amount of utility associated with goods. On the contrary: the theory starts with the preference relation, which is conceptually much simpler and can to an extent be directly observed, as it consists of preferences over simple pairs of consumption bundles. From the preference relation, a utility function can then be derived: a real-valued function that represents the preference relation by assigning higher numbers to preferred consumption bundles. This kind of “utility” is simply an ordinal measure of the preferability of a given consumption bundle. The Benthamian notion of utility as a measurable quantity of pleasure or pain is considered anachronistic and no longer used (Jehle & Reny 2001, p. 16).

To assess the worth of a given good, the modern economist looks at the amount of other goods the consumer is willing to forgo in order to consume it (Jehle & Reny 2001, p. 47). This reflects the notion in modern economics that value is subjective: a good is worth whatever someone is willing to pay for it. This subjective theory of value can be contrasted with the view that goods have some kind of intrinsic, objective value independent of any consumer or observer, such as the view held by classical economists such as Smith and Ricardo that the value of a good is related to the amount of labour required to produce it:


The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it and who wants to dispose of it, or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money, or with goods, is purchased by labour, as much as what we acquire by the toil of our own body. That money, or those goods, indeed, save us this toil. They contain the value of a certain quantity of labour, which we exchange for what is supposed at the time to contain the value of an equal quantity. (Smith 2009 [1776])


Labour theories of value can be used in a normative fashion to criticise what one views at “excessive” profits. In contrast, accepting the subjective theory of value means accepting that goods do not have any “fair” or “natural” prices (or that the prevailing competitive market price is always “fair” and “natural”). Equating value with price also implies that goods must be scarce in order to have economic value. This means that goods that in a psychological, physiological or other sense might be quite valuable, are nevertheless economically worthless if they are abundant. Regardless of these weaknesses as a moral theory of value, the subjective view has been shown to be superior to the labour-based views in predicting actual market behaviour.

In Marxist economics, the value of commodities is related to the amount of socially necessary labour time required in their production. Although Marx saw labour as “a necessary condition, independent of all forms of society, for the existence of the human race” (Capital, quoted in Swedberg 2003, p. 9), the notion of “socially necessary labour” calls attention to the fact that production is, after all, in no way independent of the social and cultural arbitraries that condition consumption. Sociologists and cultural theorists claim that the cultural component of production is, in fact, constantly increasing, as will be discussed in section 4.4.2 below. Thus instead of a subjective theory of value and an objective theory of value, it may be more accurate to speak of a consumption-based notion of value and a production-based notion of value.

2.1.4       Economics and virtual consumption

In the brief history of economic inquiry touching on virtual consumption, the author whose works stand out as the most cited is Edward Castronova.[2] Of interest here are Castronova’s earlier studies, which center around economic analyses of an online game called EverQuest (Castronova 2001, 2002, 2004). EverQuest is a so-called “massively-multiplayer online role-playing game” (from hereon, MMORPG): a virtual space where each player controls a character, known as an “avatar”, through which they interact with other players and the environment. The game contains various kinds of virtual “goods”, including items, currency and the avatars themselves. Castronova noted that, crucially, these goods are scarce: their production is programmed to require a limited resource, players’ time, ensuring that there are never enough of them to saturate demand. This sets EverQuest apart from some earlier digital environments, where objects could be created at will and were thus abundant. Due to the scarcity of the objects, Castronova found that he was able to analyse the “virtual economy” of EverQuest using concepts from ordinary micro- and macroeconomics.

Castronova documented various economic agents and processes within the virtual economy, and collected data from auction sites outside the game where virtual goods belonging to the game were traded for real money. Using this data, he calculated an exchange rate for the game currency against the U.S. Dollar. Using survey data collected from the players, he also estimated the U.S. Dollar value of the virtual possessions of an average player, the U.S. Dollar value of the amount of virtual property generated during an average hour of gameplay (“wage”), as well as a pseudo-GDP per capita -figure (Castronova 2001).[3]

Other economists who have studied virtual goods include Huhh (2008), Lehtiniemi (2008), Nash and Schneyer (2004). The latter used microeconomic reasoning to explain why the release of an existing MMORPG to a new market area caused changes in the existing users’ virtual consumption patterns: the influx of new players caused asymmetric supply and demand shocks that affected different goods differently (Nash and Schneyer 2004). They also observed that the prices of certain goods oscillated as a function of the time of day, and explained it with the fact that Japanese players exhibit different preference patterns compared to North American players. Canonical microeconomic approaches can thus be useful in explaining virtual consumption behaviour and even predicting how it reacts to changes in market conditions.

2.1.5       Limits of the economic approach: Castronova’s puzzles

As illustrated in the previous section, microeconomic analyses based on modern consumer theory can go some way towards explaining why people buy virtual goods by, for example, explaining changes in virtual consumption patterns as a result of supply and demand shocks. One might even suggest that the success of microeconomic models in these studies indicates that virtual consumers behave “rationally” in the sense that they allocate their income to combinations of goods that more or less maximise their utility in light of their “personal tastes”.

However, this would be a false conclusion. “To say that someone bought something because it represented a utility to them adds nothing to our knowledge of why they bought it, what their motives or needs were”; “it is a tautology which says nothing about particular needs but simply infers their presence [...] from the act of buying” (Slater 1997, p. 44). We do not really know whether it was “personal tastes” that prompted users to buy virtual goods. Economics is not concerned with where consumer preferences come from, only how they are acted upon. There is a vague assumption that preferences are related to “personal tastes” (Jehle & Reny 2001, p. 5), but it is an assumption, not a conclusion. It moreover says nothing about where these tastes come from, nor how they are shaped. We require a deeper explanation for why people buy virtual goods.

If economics is not sufficient to answer the question at hand, then where should we look next? According to Don Slater, the current disciplinary structure of thinking about consumption tends to follow a division where economics deals with the “formal rationality” of consumption, “the logic and procedures through which individuals calculate the best means to maximize the satisfaction of desires that are themselves assumed”, while the study of the actual desires, that is, the “substantive rationality” of consumption, is the task of other disciplines, such as biology, psychology and sociology (Slater 1997, p. 43). Formal and substantive rationality are Weber’s concepts adopted by Slater for this purpose. In this harmonious division of labour, sociologists, psychologists and physicians reveal the processes that lead to a set of preferences, and the formal models of economics are then used to derive demand patterns and other behavioural conclusions from these preferences. However, if Polanyi is to be believed, the market model itself is culturally constituted. I would like to argue that especially in the case of studying virtual consumption, the role of other social sciences needs to go further than discovering and explaining preference relations, into the domain of describing the (economic) models of interaction. The argument is presented below.

Castronova’s recent work (2008) focuses on experiments aiming to show that economic behaviour within virtual economies is in line with the models of microeconomic theory. This is a crucial step if the happy division of labour described above is to be followed. But already in his first, famous paper, Castronova documented a phenomenon that seems to contradict one common assumption in microeconomics. Based on data he had collected, Castronova calculated that the prices of virtual goods in EverQuest decreased 29 percent in one year (Castronova 2001, pp. 34-35). Assuming that the avatars’ income remained constant, this allowed players to purchase more goods than before. According to the monotonicity assumption of consumer theory, more goods is always preferable to less goods. But according to Castronova, players were not happy about their increased affluence: instead, they expressed dissatisfaction about it. If such dissatisfaction reached a certain level, players would presumably leave the game and stop consuming the virtual goods altogether.

The same phenomenon in its various forms was identified already by the operators of so-called “multi-user dungeons”, early text-based online games also known as “MUDs”. For this reason, it is frequently termed “mudflation”. It could be defined roughly as “a situation where the aggregate amount of goods in circulation increases faster than the number of consumers” (Lehdonvirta & Lehtiniemi 2008, p. 345). In the real economy, this is called economic growth, and generally considered a positive thing, in line with economic theory. But in a “virtual economy”, as conceptualised by Castronova, growth can be a very undesirable thing – a result that seems to run counter to the economic theory.

This is of course not the first time an economic theory fails to explain some set of empirical observations it is applied to. Basic consumer theory may be adequate to explain with reasonable accuracy the demand characteristics of potatoes in an agrarian economy, but in other situations, radical expansion or elaboration has been necessary to obtain a reasonable match. Decision making under conditions of uncertainty and asymmetric information are two common variations of consumer theory (Jehle & Reny 2001, p. 92). In marketing, where predicting consumer behaviour is a key concern, a wide variety of extended models have been developed (e.g., Kotler 2003). Thus the fact that basic microeconomic models are not able to account for the undesirability of mudflation is not necessarily an invalidation of the economic model-driven approach to analysing virtual consumption, or an indication that virtual consumption is economically irrational. Instead, it suggests that a different way of modeling the situation is necessary.

Castronova must have recognised this, because in his second paper on virtual economies, he no longer applied standard microeconomic theory. Instead, he developed a new a model of game consumption that explicitly accounts for the undesirability of mudflation (Castronova 2002). In the model, MMORPGs such as EverQuest are cast as puzzles with two attributes: challenge and reward. A player’s emotional satisfaction from a game is modeled as a function of these attributes. Each player is furthermore assumed to have an optimum level of challenge which they prefer over insufficiently challenging games. The effect of economic growth in this model is to reduce the challenge level of the game, resulting in a decrease in emotional satisfaction. As a consequence, players begin to prefer other games and activities, prompting them to reduce their consumption of the “wealthier”, mudflated game.

Models must necessarily paint a simplified picture of reality, especially rigorous ones that are intended to facilitate mathematical reasoning. Castronova’s puzzle model has not been empirically tested, so we do not know how well is explains player behaviour. Nevertheless, the puzzle model is arguably a poor attempt to formalise player motivations. For one, it does not take social factors into account in any way, treating MMORPGs as if they were single-player games. The undesirability of mudflation could well be seen as a result of the deflation of the status value of virtual goods as they become over-abundant and available to everyone, for example. Castronova must be commended for seeking to find a better model, but the underlying theory of human action encapsulated in the model is an ad-hoc one, and does not represent the best understanding of human action achieved in any discipline. In this sense, I am tempted to use Mark Granovetter’s words to suggest that those who specialise in formal models may sometimes be “sociological babes in the woods” when it comes to theories of social action (Granovetter 1995, p. 232). In this study, I will not attempt to provide rigorous economic models of virtual consumption, but I do attempt to provide a rather thorough account of sociological mechanisms that could be used as bases for such.

2.2             Substantive approaches to consumption: why do people buy?

If economic consumer theory assumes that consumers behave according to their individual preferences over goods, then the sociological (and sometimes psychological) theories outlined in this section provide substance to that theory, by explaining where the preferences come from, and how they are shaped. On the other hand, some of the theories in this section also question the economic theory’s behavioral assumption, positing that consumers are driven not so much by their own rational calculations but by structures of the surrounding environment. In the later sections of this dissertation, these substantive theories of consumption will be used as a background for understanding real-money purchases of virtual goods.

2.2.1       Consumption as satisfaction of needs

I will start with a substantive approach that is the least sociological of the set, being more of a substantive elaboration of the economic model. It comes from the little half-sister of economics, marketing. In accordance with the microeconomic theory of consumption, marketing frequently assumes that preferences are something that exist prior to and independently of their possible satisfaction: they are “latent wants” that become realised in the act of consumption (Campbell 2004, p. 37). But as marketing has a more practical interest in the behaviour of consumers than economics has, it also requires a theory of where these wants come from. Most commonly, their source is located in notions of “basic human needs” borrowed from psychology and physiology.

According to a classic marketing textbook by Philip Kotler, “[n]eeds are the basic human requirements. People need food, air, water, clothing, and shelter to survive. People also have strong needs for recreation, education, and entertainment.” (Kotler 2003, p. 11) Following Maslow, these needs are moreover thought to adhere to a hierarchy of importance that determines the order in which they must be satisfied, with physiological needs coming first and psychological or cultural needs after (Kotler 2003, p. 196). Wants are the culturally specific manifestations of basic needs: “An American needs food but wants a hamburger [...] A person in Mauritius needs food but wants a mango” (Kotler 2003, p. 196). Marketers influence the way in which needs are realised as concrete wants, but take no responsibility for needs, which are seen as natural and inborn.

Sociologists have criticised the idea of all consumer behaviour emanating from a set of inborn needs (e.g., Baudrillard 1988; Campbell 1998; Slater 1997, pp. 133-136; Belk 2004). In extreme conditions such as famine-era Ireland, it is clear that knowledge of physiological needs can be useful in predicting consumer behaviour. Even so, people frequently act in ways that seem to violate the supposed natural hierarchy of needs, and in the most extreme case “starve to death in their own culturally specific ways” (Slater 1997, p. 134). While it is a biological fact that a person needs nutrition to survive and live as an organism, culture defines what the person needs to survive and live as a human. The wants that people pursue in more affluent societies can be seemingly pointless or even counterproductive from a physiological or psychological perspective. Any consumption decision, such as the purchase of virtual furniture, can always be explained after the fact as the pursuit of a suitably abstract need, such as the need for self-actualisation. But if the only evidence for such an abstract need is the behaviour it is supposed to explain, then the theory is a simple tautology.

An alternative to viewing needs as natural and inborn is the idea of needs as a culturally defined category of the minimum level of consumption considered necessary for living (Belk 2004; Bauman & May 2001, p. 147-162). Needs conceived as entirely physiological may be revealed as suprisingly culturally relative, as Darwin realised when he saw snow melting on the skins of the natives of Tierra del Fuego (Barnard 2002, p. 52). Wants are understood as desires for such goods that fall outside these needs, also known as luxuries. Wants and whims may be morally judged as vice and excess, although in other contexts luxury can also be a status symbol. The consumption of goods that are considered necessities is socially acceptable and can even be desirable to the extent of being compulsory (Belk 2004, p. 80). According to Belk, increasing affluence and the continuous introduction of new goods into society results in classificatory shifts, where goods that were previously considered luxuries are redefined as as decencies and eventually as necessities (Belk 2004, p. 71-72). Information technology is currently undergoing such a shift. For example, the mobile phone that used to be a luxury of top executives is now an everyday necessity for Finnish and Japanese teenagers (Wilska 2003; Rantavuo 2006).

2.2.2       Consumption and social status

The needs-based account seems tempting at first, but can quickly become a tautology that fails to provide a useful theory of why consumption patterns differ between individuals. An influential sociological stream of thought that fares better in providing such explanations is based on the relationship between possessions and social status.

Anthropologists have observed that in a traditional economy, the distribution of goods that results from the flows and exchanges of goods tends to be such that it more or less reflects the stratification prevalent in the society, the different levels of social status. For example, rare copper shields that were produced by natives of the American Northwest ended up in the hands of chiefs and nobles, not in the hands of beggars and paupers (Mauss 1990, pp. 44-46, 134). That someone owned such a copper object was therefore a sure indication that they were a person of high standing. This way, goods become markers that allow an individual’s social status to be “read” from their possessions (Douglas & Isherwood 1978).

A classic example of a theory that presents consumption as a sign of social status is Thorsten Veblen’s The Theory of the Leisure Class (2008[1899]). Drawing from his own experiences in late nineteenth century America as well as his unreferenced, somewhat idiosyncratic descriptions of other ages and cultures, Veblen traces the rise to prominence of a leisure class that holds as its core value the avoidance of menial work. The origins of the leisure class are found in the hunters and warriors of early “barbarian communities” that were exempted from gathering and farming activities so they could be ready to execute their duties. Indeed, participation in the menial activities was a sign that a man was not fit for hunting and fighting. Veblen’s modern day leisure class, the rich and the affluent, continue to distinguish themselves from the lower classes by highlighting their exemption from productive work. They do so by engaging in conspicuous consumption: the study, purchase and application of goods that cannot possibly be useful for any work. Such consumption is not merely useless, but can even be harmful in order to prove the point:


[P]eople will undergo a very considerable degree of privation in the comforts or the necessaries of life in order to afford what is considered a decent amount of wasteful consumption; so that it is by no means an uncommon occurrence, in an inclement climate, for people to go ill clad in order to appear well dressed. (Veblen 2008[1899])


Veblen also notes that the lower classes, wishing to partake in some of the honour and elegance of the leisure class, try their best to imitate the most conspicuous styles. Another classical theorist, Georg Simmel, used this notion of imitation or emulation as the basis of a theory of fashion (1957[1904]). As goods come to signify high status, they become available as pieces in a game of status competition. By acquiring such goods, members of the lower class can bring themselves closer to the class above them. But members of the higher class do their best to maintain the distance by constantly adopting new trends and consumption styles. In particular, they try to establish positional goods, goods over which an artificial scarcity of supply is imposed; but even these tend to be eventually imitated and inflated (Featherstone 1991, pp. 88-89). According to Simmel, this cyclical movement leads to diversity, constant change and expansion in the scope of fashion (from adult dress to children and pets, for example).

But as the availability of goods in the society increases and they become more attainable to lower classes, the lower classes’ incursions into the domain of high-class consumption become so bold and frequent as to altogether threaten the link between possessions and social status: it starts to be impossible to “read” a persons status by simply looking at their consumption style. The higher classes stand to lose if class distinctions are evened out in this way, so there may be moral panic and attempts to freeze the prevailing order through sumptuary laws: rules that determine what each social class is permitted to consume. For example, the Tudor English prescribed the permissible colours, cuts and materials of the clothes of different levels of nobility and bourgeoisie, as well as the length of their swords and daggers, “to the intent [that] there may be a difference of estates known by their apparel after the commendable custom in times past” (Secara 2001).[4]

Appadurai (1986, p. 25) sees sumptuary laws as a kind of intermediary phase: a half-way point in a transition from a “stable universe of commodities”, where commodity flows are restricted (traditional economy), to an “ever-changing universe of commodities”, where commodity flows are seemingly unrestricted (market economy). As consumption choices and affluence continued to grow in England, it eventually became impossible to control the sign system by means of laws. Did the link between consumption style and social class thus disappear forever?

Pierre Bourdieu’s well-known theory posits that class remains very much a factor in consumption styles through the mechanism of taste (Bourdieu 1984). In a society where access to goods is not restricted, it is access to information regarding which goods are the “right ones” that becomes valuable. One’s taste, the discernment that one shows when making consumption decisions or evaluating the consumption decisions of others, is what reveals one’s social status. Factory workers may be knowledgeable about football and beer, while scholars might favour ballet and wine. But a factory worker cannot masquerade as a scholar by simply reading up on ballet and wines. One’s preferences, dispositions and classification schemes are embodied in one’s habitus: an unconscious, natural, almost physical aspect of one’s being, that is the result of class breeding (Slater 1997, p. 162). The scholar’s habitus is such that they can feel comfortable discussing ballet at a wine party, making distinctions at ease, whereas a factory worker might feel self-conscious and uncomfortable despite possessing the same information.

Bourdieu shows that even though access to goods is no longer coercively restricted, the ability to consume the “right” goods, the ones that bestow status upon their consumer, is restricted by class breeding, habitus. However, this opens up a new arena for struggle: the struggle for cultural capital, the right to determine which tastes and consumption styles count as the legitimate ones. Factory workers may not have the resources to challenge the primacy of the scholars’ tastes, but as an example of an emerging group that is successfully redefining the boundaries of legitimate consumption, Featherstone (1991, p. 93) mentions a generation of newcomer-scholars that turned the legitimating gaze of academic scholarship to jazz and cinema. Today’s young scholars seem to be turning it to video games, anime and the Internet. By challenging and reshaping the symbolic content of goods, they are transforming not only culture itself but consequently also the class structures and divisions dependent upon that culture (Slater 1997, p. 160).

2.2.3       Consumption and identity

The class-based approach to explaining differences between individuals’ consumer behaviour has been influential among sociologists of consumption throughout the history of the field. In part thanks to Bourdieu’s contributions, it also features prominently in contemporary theoretical discussions and is a living field more complex that was possible to convey in the previous section. However, in the past decades, the approach has also been seriously challenged. Often the claim is that society has changed in ways that necessitate a radical break with older theories of consumption. Most commonly this change is framed in terms of “modern” giving way to a “postmodern”.

Postmodern is understood in a variety of different ways by different authors (or indeed, by the same author). For instance, it can be understood as a cultural and intellectual movement, visible in the arts and philosophy of the current period, or as a whole new era, characterised by concrete social changes and a new set of values and institutions, visible everywhere down to the level of everyday consumption (Baudrillard 1981, 1988; Jameson 1991; Featherstone 1991). For the purposes of this study, it is not necessary to dive deep into debates regarding the nature of postmodern and whether the movements ascribed to it are recent or part of more ancient undercurrents. Instead, we will simply note the criticisms leveled against the class-based explanations and examine what kind of an image of substantive rationality the new theories put forward.

A major criticism of the class-based theories of consumption is that they assume consumption style is concerned only with symbolising social class, when it is actually also a means to symbolise all kinds of other dimensions of identity: gender, generation, age group, ethnicity, religion and sexuality, among others (Barnard 2002, p. 131). Class-based differences are less pronounced in today’s consumption styles than they were a century ago, whereas the role of other aspects of identity is claimed to have grown. In fact, the whole concept of social class in contemporary society is de-emphasised and even questioned. According to Ekström and Brembeck, “merchandise increasingly turned into a language able to formulate subtler meanings. The primary focus was the way identity was expressed within different social groups.” (2004, p. 1)

Psychological and social identity is seen as a uniquely modern problem (Gabriel & Lang 2006, p. 82). The anonymity of urban living, constant physical as well as social movement, and the proliferation of choices in life makes it difficult for an individual to assume a fixed identity. The collapse of what Lyotard calls “grand narratives” can also be seen as depriving individuals of any firm cultural anchoring points on which to base their identities (Campbell 2004, p. 30). As a result, individuals are constantly seeking to define themselves, working on the “reflexive project of the self, which consists in the sustaining of coherent, yet continuously revised, biographical narratives” (Giddens 1991, p. 5).

The most mechanistic views concerning how identity relates to consumption posit that shopping is a way to acquire identity: images and meanings from consumed goods are simply transferred onto the consumer (Gabriel & Lang 2004, p. 84). But this fails to explain on what basis the goods are chosen, how the goods come to acquire their meanings, and what kind of interactions there may possibly be between identity and consumption. In the theories of Veblen and Simmel, most consumers simply adopted styles handed down to them from above; but to account for the diversity of contemporary styles, various scholars suggest that we need to look at how “consumers, if they may still be referred to as consumers and not as producers in some sense, [...] actively [use] fashion and clothing to construct and articulate [...] identities that are not those that are prevalent in society” (Barnard 2002, p. 132).

Many studies of cultural rebellion and subcultures could be brought to bear in illustrating how fashion has been used in the construction of new identities (e.g., Hebdige 1979). Barnard’s (2002) account of jeans, punk and hip-hop will be followed here. Originally worn by farmers, miners and cowboys, jeans had a clear association with lower class. From 1930s onwards, different subcultural groups in North America began to adopt jeans: first artists, then bikers, and later leftist activists and hippies (Barnard 2002, pp. 133-134). Each of these groups, in their own way, “stood strongly in opposition to the dominant conservative, middle-class, consumer-oriented culture of America”, and wearing jeans offered them a “visible means for announcing such anti-establishment sentiments” (Davis 1992, p. 70). Wearing jeans, all of the same colour and material, was used to reject and step outside class-based positions and identities, and establish new positions outside the dominant order.

The 1970s saw the rise of the punk phenomenon, which can be described as an attempt to challenge both middle-class culture as well as the capitalist system that mass-produced the goods of that culture (Barnard 2002, pp. 136-137). With their self-made styles and excessively crude tastes, participants renounced the role of an obedient consumer and established new positions supposedly rooted in more earthy, vulgar and authentic values. In the 1980s and 1990s, hip-hop music culture originated its own distinct consumption styles, beginning with expressions of defiance against perceived injustices and developing into a full-blown hip-hop fashion (Barnard 2002, pp. 138-141).

From the perspective presented above, fashion is no longer a matter of pure social performance, as it perhaps was in some earlier centuries, but a matter of personal truth and authenticity (Slater 1997, p. 16). If fashion for Veblen and Simmel was something that only the upper classes “do”, from this perspective, fashion appears as something that any active consumer can do as part of creating and expressing identity and challenging the role assigned to them by the dominant order. It is, in fact, the ruling classes who, according to Barnard, stick to conservative fashion (or “anti-fashion”), because it remains constant and proclaims the message of continuity and un-change.

Some of the methods active consumers use to construct new styles and identities have been described as pastiche and bricolage (Hebdige 1979, pp. 102-106; Barnard 2002, pp. 176-181). The English word pastiche is rooted in the late Latin word pasta, meaning “paste”. Here it means the direct imitation of the characteristic styles of past ages, rather than their creative combination or parody (for a theoretical discussion, see Jameson 1991). Perhaps the contemporary term would be “copy-paste”. Bricolage, on the other hand, refers to the creative mixing and matching of odds and ends from other styles and ages to create new styles.

The end result is a constant flow of styles, goods, meanings, fashions and oppositions. The influence of one-dimensional social class on consumption decisions wanes, but the importance of belonging to social categories does not necessarily disappear: new lifestyle groups can be seen as forming around specific identity positions and their associated consumption styles. Typical rallying points for such groups are cultural icons such as musical artists, films, and more recently, some anime characters and video games (Nikunen 2006; Järvinen 2006).

To conclude this section, I will briefly introduce a slightly different angle into the relationship between consumption and identity. For Colin Campbell (1989; 1998; 2004), consumption is not so much a means to constructing identities as it is a means to discovering one’s “true” self-identity. As a consumer exposes themself to different goods on the marketplace, they learn about their true identity by monitoring their own responses to different choices and products. Through explorative consumption they discover what kinds of things they like, what kinds of things they hate, and how their mind and body react to different kinds of things. From this angle, consumption is less about acquisition and more about process: a quest to find and experience new and diverse consumption choices in order to become as acquainted with one’s inner self as possible.

2.2.4       Consumption as art and experience

According to Featherstone, the developments outlined in the previous section have lead to an increasing “aestheticization” of everyday life (1991, p. 70). In search for order in the jumble of signs and styles, the consumer’s identity project starts to involve a need to form life into an aesthetically pleasing whole: life as an artistic project. This entails, on one hand, the careful seeking out and cultivation of hedonic experiences. On the other hand, it also entails creativity and self-expression, such as the pastiche and bricolage described in the previous section, but as an end in itself, rather than as the conscious construction of countercultural identity positions. Identity turns into performance, then spectacle, and finally art (Barnard 2002, pp. 166-168).

If in previous times consumption was about social performance or personal authenticity, under this view, contemporary consumption is seen as a hedonistic hunt for experiences and sensations. “The pursuit of pleasure, untarnished by guilt or shame, becomes the bedrock of a new moral philosophy” (Gabriel & Lang 2007, p. 97). Campbell (1989) divides hedonism into two types: traditional, which involves the pursuit of sensations attached to the senses, and modern, which involves the pursuit of emotions attached to all kinds of experiences, even negative ones.

In traditional hedonism, aesthetic pleasure is derived directly from consumer goods through the senses: for example, from the touch and sight of attractive clothes (Barnard 2002, pp. 69-70). In modern hedonism, goods can be used as props in the construction of increasingly elaborate experiences (Pine & Gilmore 1999, p. 144). While traditional aesthetic pleasure relies on “socio-genetically” determined and thus somewhat shared aesthetic codes (Featherstone 1991, p. 71), more elaborate experiences can be very individualistic and constructed in a process resembling artistic pursuit.

What we might expect this rather “postmodern” view of consumption to entail in terms of practical observations is that it becomes difficult to explain consumption by reference to social structures or even lifestyle groups based around an identity position. Instead, consumer behaviour is highly individualised and linked to the playing out of dreams and fantasies. As such, it is best explained by reference to the individual’s psychological landscape, if it can be explained even then.

When consumption is discussed as a means towards emotional fulfillment, a question that is frequently raised is whether consumer goods can really deliver happiness. In the next section, I will consider such criticisms towards consumption and explore the suggestion that the benefits of consumption are, in fact, an illusion, and that consumption may even be harmful to consumers.

2.2.5       Production of consumption

In the sections above, I have outlined how consumption can be approached as the fulfilment of culturally defined needs; as the expression of one’s social status and a means to affect it; as a way of constructing, expressing and discovering one’s identity on a wider range of dimensions; and as a hedonic pursuit of experiences and artistic visions. Each of these systems of consumer behaviour can be thought of as emerging naturally or spontaneously from deeper structures of social life and human psychology. But it is also possible to see them, or some aspects of them, as the consequences of manipulation.

According to Kotler, “[m]arketers do not create needs: Needs preexist marketers” (Kotler 2003, p. 11). Even if we accept this view, according to which needs are inborn and marketers only affect their realisation as wants, marketing cannot be disregarded as an innocuous process of informing consumers about the available options. One example used to argue for this point is childhood obesity and the mismatch between desired dietary intake and what is targeted and advertised at children in the United States (Gabriel & Lang 1995, p. 115). By choosing to use children’s desire for sweetness instead of some other need as the thrust of their marketing efforts, food producers are directly influencing realised consumption patterns.

Yet as argued in section 2.2.1 above, a better way to understand consumer behaviour is in terms of culturally-defined needs, the “necessities” of life. In 1950s, journalists and scholars begun to drawn attention to the ways in which marketing affects perceptions of necessity. Vance Packard (1981[1957]) describes how new sophisticated techniques of consumer psychology were being used to persuade Americans to buy goods that they would not have otherwise purchased. Yoshimi (2006) relates how the number of electric appliances that were considered sufficient for a Japanese household kept increasing throughout the postwar decades. Today, the process of educating consumers about the ever-growing necessities of life begins at an increasingly young age (Quart 2004; De Graaf, Wann & Naylor 2005).

The association of certain goods with high social status can be seen as a natural result of their rarity and exclusivity, and subsequent adoption by high-status individuals. But in the age of mass media, perceptions of rarity, exclusivity and celebrity endorsement can also be manufactured. In Simmel’s account of fashion, members of the upper class spontaneously adopted new styles to maintain social distance, but in Fred Davis’s account of the contemporary fashion system, international fashion conglomerates play the main role (Davis 1992, pp. 200-206). Women’s clothing fashion in particular is designed in the fashion capitals of the West (and increasingly, in Tokyo), from whence it emanates radially to every hinterland on the wings of the conglomerates’ global marketing power.

In opposition to mainstream fashion and the limited range of identity positions it affords, stands the use of consumption styles to create new and rebellious identities, from jeans-wearing hippies to consumption-critical punks and politically defiant hip-hoppers. In each of these cases, the popularity of the style eventually made it commercially attractive to start producing the symbols of the rebellion industrially. A side effect of such commercialisation, however, tends to be the subversion of the original meanings of the styles. Different kinds of jeans began to appear in the market, from Levi’s classics to Chanel’s luxury denim, introducing “precisely the sorts of distinctions between the classes of jean wearer that they had originally been used to counter” (Barnard 2002, p. 135). Punk styles were gentrified and disarmed when their styles were adopted into high-street fashion (Barnard 2002, p. 138). And the menacing ghetto styles of the hip-hop movement became a fashion of choice for middle-class youth from Los Angeles to Tokyo, almost in direct opposition to the identity they were originally developed to express (Barnard 2002, pp. 140-141). As long as there are discontents, activists, politically radical African Americans, they will find new consumption styles to position themselves brazenly outside the dominant order. But with the same certainty, if they succeed, entrepreneurs will never be far behind.

Today’s marketers are also actively creating new commercialisable identities instead of simply waiting for them to emerge (Davis 1992; Quart 2004). Central to this activity is the concept of lifestyle, which is a new way of grouping consumers. If Fordist marketing grouped consumers according to socio-demographic segments, post-Fordist marketing groups them in terms of similar tastes, attitudes and consumption patterns (Slater 1997, p. 191). The rationale for this grouping is the idea, elaborated in section 2.2.3 above, that culturally defined lifestyle categories are now more powerful determinants of behaviour than social structures such as social class. According to Slater, “lifestyle marketing not only identifies and targets existing lifestyles but rather produces them by organizing consumers according to meaningful patterns, constructed and distributed through design, advertising and the media” (Slater 1997, p. 191). According to this view, consumers associate with a lifestyle they see in advertising, magazines and movies, and turn it into reality by adopting the corresponding consumption behaviour.

As for the idea of consumption as the pursuit of experiences and artistic visions, the classic criticism, as expressed by Adorno and Horkheimer (1979[1947]), is that experiences produced by the capitalist culture industry are nothing but homogenous mass culture, empty and without any other meaning than the need to capture the audience. Moreover, this Marxist perspective sees the culture industry as being in service to other industries, programming people into consumers to fulfill the needs of the expanding production. According to this view, living out one’s dreams through consumption is, in fact, an illusion.

Viewing consumption as an entirely “produced” phenomenon, where consumers are nothing but victims of manipulation, is a tempting way to try to explain away the whole question of consumer behaviour. In practice, however, it tends to overlook the diverse, even active roles that consumers adopt in markets. Consumers behave in unexpected ways (Gabriel & Lang 2006; Featherstone 1991, p. 15), share information, advocate and campaign (Zelizer 2002a, p. 116), take roles as producers and distributors (Lessig 2004), and as detailed in the previous sections, continue to play a role in the way fads and fashions come to being. I will therefore set this view aside for now, but invoke it later when a critical perspective is needed.

2.3             Consumption across cultures

The scope of this dissertation is not explicitly set to any specific geographical area. Instead, a relatively global perspective is attempted in the sense that empirical data is included from both of the two main market areas of virtual consumption (explained in section 3.2.3 below). To support this wide geographical scope on the theoretical level, it is necessary to briefly consider the role of culture in consumption and consumer behaviour.

The notion of a “culture” pertaining to a group of people can be defined by reference to its manifestations as practices and cultural objects, or by reference to values and other mental objects that are not directly observable. A definition used by Viviana Zelizer combines these two approaches by defining culture as “shared understandings and their representations in objects and practices” (Zelier 2002a, p. 105). Shared understandings include both values (what should be) as well as ontological beliefs regarding the world (what is). Culture is typically understood to be an attribute of a nation, geographial region or ethnicity, but lately it has also been applied to other objects, such as corporations (Zelizer 2002a, p. 102) and most recently, online communities (Kim 2000; Lessig 2004). In each case, a connotation of shared understandings and their concrete manifestations is to some degree present.

As for how culture relates to consumption, two basic approaches can be identified in literature. The first is to consider culture as a structural variable, similar to social class, that explains systemic variations in people’s consumption behaviour. Differences in behaviour between members of two different cultures are explained as reflections of “cultural differences”: systematically different patterns of understandings that individuals adopt as a result of being socialised into a particular culture (Nisbett 2004). However, by adopting this kind of cultural explanations too earnestly, researchers run the risk of glossing over other possible mechanisms. For example, Horioka (2006) argues that before resorting to cultural explanations, it is important to consider whether simple economic realities might account for cross-national differences in consumption patterns. Culture is best used as an explanans when a mechanism through which an attribute of the culture could plausibly affect the behaviour in question is also proposed (e.g., Kimura & Saito 2006).

The second approach to the relationship between culture and consumption takes a wider view, recognising that even economic institutions such as the market are products of culture. Karl Polanyi’s classic economic anthropology sees price-making markets as one possible model of allocation, and contrasts them with two other economic models, reciprocity and redistribution (Swedberg 2003, pp. 28-29). Reciprocity is understood as flows of goods within symmetrical groups such as families and neighbourhoods, while redistribution refers to centrally organised static allocation of goods, typically by the state. The actual economic model of an entity, such as a society, is a mixture of these ideal types. Which transactions belong within which sphere is also a matter of shared understanding. For example, Zelizer (2002b) notes that some social relationships are considered “intimate” and therefore outside the scope of markets, while other relationships are “professional” and open to price-making. There is ambiguity and fluctuation, as well as movement from category to category as a result of long-term cultural changes.

In this dissertation, both approaches to theorising the role of culture are utilised to some extent. In article four, culture is used as a structural variable in statistical models to explain national differences in virtual consumption behaviour, while article two is an account of the culturally constituted economic-social institutions of an online hangout. In section 3.5, I also explore the limits of the ability of users to culturally shape these institutions, considering the way in which operators necessarily pre-determine features of the economic landscape.


3                 Virtual consumption

In this section, I move from established theories of consumption to what I claim to be a novel mode of consumption: spending money on virtual goods. I begin with some background on the sites of virtual consumption, the virtual spaces that emerged as a result of the consumer Internet boom of the 1990s. I follow with an analysis of how digitalisation influenced consumption in three waves: first through online retail, then by enabling increasing consumer participation, and finally by giving rise to virtual consumption. I then proceed to the main contribution of this dissertation: applying established theoretical perspectives on consumption to virtual consumption to develop explanations for why people are spending money on virtual goods. This involves analysing how virtual consumption practices relate to social status, identity and experience, how they are shaped by the architectures of virtual space, and how they interact with the virtual consumers’ life outside the screen.

3.1             Being social online

The emergence of virtual consumption is predicated on a larger consumption-related trend that has swept over industrialised countries in the past two decades: the massive adoption of the Internet and other digital communication technologies for everyday consumer use. This section is concerned with theorising the rise of online communication in a way that provides necessary context for the practices of virtual consumption that are detailed in the later sections.

Technology is defined as the application of sciences to solving practical problems. Ostensibly, then, the aim of technological consumer products, including computers and Internet services, is to help consumers overcome their problems and fulfil their needs. But technology consumption can be approached from other perspectives as well: as one more style, marker or trend in the pursuit of social status, identity or manufactured consumerism. Empirical studies show that socio-economically disadvantaged people tend to consume Internet services and other new technologies less than socio-economically advantaged people (Hsieh et al. 2008; Räsänen 2008; Räsänen 2006). This could be interpreted in a Veblenian fashion as a reflection of how higher classes are drawn to novel and expensive gadgets because of the gadgets’ ability to signal social status (Yoshimi 2006, p. 76). Recent empirical studies also suggest that people of the lower income and education brackets use the Internet for entertainment purposes rather than for information retrieval or learning (North, Snyder & Bulfin 2008; Räsänen 2006). This could be seen from a Bourdieuan perspective as reflecting differences in the distribution of cultural capital, or from a production of consumption perspective as an instance of the triumph of frivolous mass culture over more enlightened values.

In terms of identity, the consumption of new technologies carries with it connotations of youthfulness and masculinity as opposed to old age and femininity, which is reflected in empirical studies of technology consumers (Räsänen 2008; Räsänen 2006; Wilska 2003). Marketing associates technological devices with images of success and sophistication, although technology products and brands can evoke ideas of freedom and independence (e.g., Linux) as well as conformity and control (e.g., Windows).

But beyond this superficial analysis of communication technologies and Internet services as one more piece in the grand game of consumption, is the realisation that these technologies have also changed the way in which the game is played for many people, by extending the playfield into the online space. A large body of authorship is concerned with how identities are formed online, how people congregate in virtual communities, and how computer-mediated communication channels become to be perceived as concrete new spaces. In the following subsections, I will cover these ideas to the extent necessary to understand the context in which Internet users engage in virtual consumption.

3.1.1       Virtual identities in virtual bodies

As the use of computer-mediated communication technologies expanded from corporate groupware to hobbyist bulletin board systems, from academic data exchange to multi-user dungeons (MUDs), the issue of identity entered the scene in a big way. In professional use, identity had chiefly been an administrative and forensic matter, but in the new leisure-time oriented services, it turned back into the social and psychological question of the construction of self. Furthermore, the inability of the technologies to relay information about the participants’ appearance, socio-demographic background and consumption style, also known as anonymity, freed the participants of early computer-mediated communication systems to make up their own descriptions regarding the same. This gave rise to pseudonymity, acting under an assumed identity, as well as the notion of “disembodiment” and the idea of the digital representations of the self as “virtual bodies”.

Together with “virtual communities”, the question of identity and body online is one of the main topics of early Internet scholarship in the social sciences and humanities (e.g., Turkle 1995; Porter 1997; Holeton 1998; Kitchin 1998; Jordan 1999). A brief summary of the major claims follows. An assumed identity, whether it be simply an exaggeration of the person’s actual attributes or a completely fabricated or even fantastical being, is to a certain extent made real and tangible by other participant’s reactions to it. This enforces the identity in the mind of the person assuming it. In time, reputation, memories, roles, responsibilities and relationships will become pinned to the identity, further enhancing its reality. From the perspective of consumption, it is also interesting to note that textual descriptions of consumer goods can be used in place of actual goods to express identity: a character’s self-description might reveal, for example, that the character is a “Marlboros rolled in the T-shirt sleeve kind of guy” (Turkle 1995, p. 13).

The ability to create identities can be used by the participants for experimentation and play: for trying on different identities to observe how others react to them and what kind of feelings they evoke in the self. It can also have emancipatory potential for people who feel that they are not able to express their “true” identity in their everyday environment, because of, for example, the limitations of their body or the attitudes of the surrounding society. Castronova sees that computer-mediated communication can therefore “give you a freedom that no one has on Earth: the freedom to be whomever you want to be” (2001, p. 17). On the other hand, the veil of anonymity also allows the more negative aspects of human personality, such as egotism, belligerence and rivalry, to be brought forward.[5]

Anonymity, together with multitasking and asynchronous modes of communication, permits the maintaining of multiple identities simultaneously. To make use of this ability, users must split their time and attention between their various computer-mediated identities, in addition to splitting their time and attention between computer use and other activities. This partitioning, coupled with the significance and value users invest in their computer-mediated identities and relationships, gives rise to the idea and experience of the physical body as just one facet of the self, to which there is not always willingness to assign primacy. “RL [real life] is just one more window [...] and it’s not usually my best one”, Sherry Turkle quotes one informant as saying (1995, p. 13).

3.1.2       Communities of interest

A common theme in the literature is how repeated discussions and interactions in a computer medium over an extended period of time result in meaningful relationships, even such where the participants’ experience of trust an intimacy is comparable to or even exceeds their experiences in face-to-face relationships. But the relationships and the identities involved in them are never described as floating freely in some kind of a borderless cyberspace. Instead, each identity and relationship is framed by and defined in relation to an online social group: users of a particular MUD, participants in a particular Usenet discussion group, and so on. Such groups are frequently called “virtual communities”.

The phrase “virtual community” was coined by Howard Rheingold and made popular as the title of his book on early computer-mediated social groups, first published in 1993 (Rheingold 2000). Rheingold himself traces the idea of viewing computer-mediated groups as “communities” to ARPA directors J. C. R. Licklider and Robert Taylor:


‘What will on-line interactive communities be like?’ Licklider and Taylor wrote in 1968: ‘In most fields they will consist of geographically separated members, sometimes grouped in small clusters and sometimes working individually. They will be communities not of common location, but of common interest....’ (Rheingold 2000, p. 9)


This prediction was shown to be insightful when groups matching the description appeared many years later and were described by authors such as Rheingold and Amy Bruckman (1998). The idea of a common interest, whether it be a hobby or profession or something as abstract as common tastes, became central in these descriptions and was elevated to the position of something of a constituting feature of virtual communities. Rheingold and especially Bruckman compare virtual communities to bars: each has its distinct clientele, from “Sportsman, a leather motorcycle bar” to “Maria’s”, a cozy Italian restaurant (Bruckman 1998, p. 171). The reason for coming to a particular virtual community are the like-minded individuals that gather there.

The membership of a virtual community is often discussed and analysed in terms of a simple structure of roles or status positions, which are usually informal. Defining factors of such informal status can be, for instance, one’s knowledgeability in the themes of the community, one’s frequency of participating in discussions, one’s manner of presentation, and one’s length of membership. Amy Jo Kim’s (2000) life cycle model consists of five phases through which a virtual community member might go through: 1) lurker, a person who merely observes the community; 2) novice, a person who begins to participate in the community’s life; 3) a regular participant; 4) a leader in the community; and 5) an elder, a respected but less active participant.

In sociology, the concept of community has been given many different definitions in different ages and contexts. Virtual community, as described above, relates quite well to the classical notion of community as Tönnies’ Gemeinschaft, which implies common interests and beliefs and strong personal relationships among its members (Tönnies 2001[1912]). Virtual community differs from Gemeinschaft mainly in that membership is somewhat fuzzy and status positions perhaps more flexible. Occasionally a distinction is made between “virtual community” and “online community”, where the latter is understood as an Internet-mediated community, whereas the former can be mediated by any communication technology including, for example, telephony. Although the empirical parts of this dissertation pertain to the Internet, the overall notion of virtual consumption does not need to restricted to a particular medium. Due to technological convergence, this distinction is in any case loosing some of its importance.

3.1.3       From medium to space

Another common theme in works such as Rheingold (2000), Bruckman (1999) and Turkle (1995) is experiencing the computer medium through which the virtual community interacts as a place: a location rather than a channel. This happens in all kinds of virtual community platforms, but is particularly obvious in those that are built to simulate actual geographical space, such as many online games and hangouts (Neitzel 2007).

A term that will be used to refer to such games and hangouts in this dissertation is “MMO”, which stands for “massively-multiplayer online”. This indicates an online service with a large number of users interacting with each other synchronously, often through an avatar situated in a virtual space. For example, the use experience in MUDs (a subset of MMOs) involves navigating in a maze of “rooms”, presented as textual descriptions, which together constitute a virtual terrain. Modern MMOs usually involve navigating an avatar in a virtual terrain rendered in three-dimensional graphics. The presentation style is not crucially important: the analyses in this dissertation apply for the most part even in services that only feature metaphorical space, such as social networking sites. It is important, however, that the space and its objects are persistent: that they do not disappear or reset after every session, but continue to live and evolve even as the user logs off.

A “virtual place” can be seen as the vessel of an interest-based community, but it may also become an attraction in its own right, as Bruckman discovered when people unrelated to media research repeatedly attempted to enter her media researchers’ discussion space MUD (1999). Following the bar analogy above, the people came because of the drinks and the pool table and not because of the other clients. From this perspective, the element that gathers users together can be the features and content of the platform as opposed to any particular relation to the other participants. Indeed, the term “virtual community” is today often used to describe any “bunch of people who happen to use the product that we as developers or researchers” are interested in (Johnson & Toiskallio 2007, p. 31). This use makes the term interchangeable with “user base” and therefore renders it redundant. The term is also sometimes used to describe the technological platform that mediates the community. This equates it with group-based communication technology, again rendering it redundant. In this dissertation, the term “virtual community” is reserved for situations where some kind of Gemeinschaft-like communality between a group of users is suggested.

Modern MMOs have user bases consisting of hundreds of thousands or even millions of active participants. Participants spend significant time exploring and interacting with the large and often intricately crafted game environments, in addition to and instead of interacting with other users (Williams, Yee & Caplan 2008). Not surprisingly, users can have widely varying ideas of what constitutes legitimate participation in an MMO (Lehdonvirta 2005; Whang & Chang 2004). For these reasons, even though the concept of virtual community has been historically important in laying the ground for understanding social forms in the online environment, it is not sufficient for understanding the complexity of social behaviour in MMOs. The question is important if virtual consumption in these environments is to be understood as social behaviour of some kind.

An easy way forward would be to consider large virtual spaces such as MMOs as vessels that act as the gathering places of several distinct virtual communities. For example, Williams et al. (2006) draw parallels between communities and MMO guilds. Guilds are a quintessential social grouping in many MMOs, and most active players belong to one. But viewing MMOs simply as collections of guild-communities would be insufficient for analysing phenomena such as inter-guild rivalry, recruitment of individuals from one guild to another, and institutions that exist outside the guild structure, such as individual fame and social status related to virtual goods. Some larger theoretical framework is therefore necessary.

3.1.4       The fallacy of virtual society

Article one of this dissertation focuses on the problem of how to conceptualise MMOs in social scientific research. Scholars who write about MMOs frequently refer to the systems and their user bases using phrases such as “virtual world” (e.g., Lastowka & Hunter, 2004), “synthetic world” (e.g., Castronova 2005) and “virtual society” (e.g., Jankowich 2005). In many cases, these are just labels with no implied theoretical content. But for some, Castronova in particular, the naming signifies a certain theoretical approach to the subject matter:


The defining feature of a large game is that because of its sheer size and complexity, it can be categorized as a genuine human society. In other words, the society we all lived in before the advent of synthetic worlds was itself a large game. True, it was the only large game, but these days it is no longer unique in that sense. The large game of Earth society now competes for my time with the large game of Norrath society, Norrath being the world of the video game EverQuest, which at this writing hosts the attention of some 400,000 human minds on a daily basis. And so long as we focus on the core mechanics of a large game, there will be little in the way of significant difference between the behavior of individuals in one large game or another. (Castronova 2006b, p. 171)


In other words, if “virtual communities” are computer-mediated equivalents of conventional communities, then “virtual societies” are computer-mediated equivalents of conventional societies, complete with the same core rules that regulate human behaviour. From a research point of view, this would certainly be convenient. For example, it would allow us to use MMOs as the social science equivalent of petri dishes:


Until now, it has not been possible to take all of society as a research object [...] Thus, although we might believe theoretically, historically, and ethnographically that society operates a certain way, and we might have small-scale experiments that support our beliefs, it has generally not been possible to observe whole societies under controlled conditions. Now however, with the advent of synthetic world technology, it is indeed possible to replicate entire societies and allow them to operate in parallel. (Castronova 2006b, p. 163)


There are serious problems with conceptualising MMOs as entire societies, however. As a practical empirical matter, the avatars that supposedly make up the “inhabitants” of such a society cannot be equated with the humans controlling them, because there is no simple one-to-one correspondence between avatars and users. More importantly, humans that participate in an MMO are already members of an Earthly society, and it is simply not the case that they can completely escape this identity by going online. Existing social structures, norms, institutions and even the physical layout of their surrounding space will continue to act on the online user’s behaviour. The institutions and processes that are ostensibly internal to the virtual society itself, such as its economy and laws, are bound to larger institutions and processes, most visibly through the decisions and (commercial) interests of the entity operating the MMO. These issues and a number of other reasons for why it is misleading to label MMOs as “virtual worlds” or “virtual societies”, and even more unsatisfactory to analyse them as such, are discussed in detail in article one of this dissertation.

Instead of attempting to theorise MMOs as communities or societies, they could perhaps be better analysed using some other social scientific constructs. In article one, I argue that such constructs include Anselm Strauss’s social world perspective (Strauss 1978), Bourdieu’s concept of field (Swedberg 2003, p. 127), as well as social network analysis, introduced to economic sociology by, among others, Granovetter (1973). Social networks –based perspectives postulate network structures consisting of ties between individual actors, but what exactly counts as a tie is a point of disagreement (Burt 2002, p. 150). In this dissertation, MMO users are theoretised using the interactionist notion social worlds, as described below.

The social world perspective allows us to analyse the boundaries and subdivisions in an MMO user base whilst recognising that the users are simultaneously members of other social worlds, such as family and workplace. The virtual space of the servers of an MMO is seen as the central site of a new social world; the world of World of Warcraft, for example. The activities programmed into the MMO constitute the world’s central activities. The social world also extends beyond its central site to other sites such as discussion forums, instant messaging channels, offices and school yards. The borders of the world are not determined by formal membership or arbitrary techical boundaries, but by the limits of communication and discourse. Communication simply means being in touch with the central activities of the world as opposed to being isolated from them; cancelling one’s World of Warcraft account does not necessarily mean exclusion from the social world because of the existence of other sites of participation. The limits of discourse can be understood as the ability to speak about the activities in a way that classifies the person as a World of Warcraft player as opposed to, for example, a developer or a first-time visitor. This indicates that the social world has a degree of common culture, where culture is understood as a set of shared understandings. However, these only need to exist to the degree necessary to maintain discourse; there can be significant differences in core values, such as what kind of engagement constitutes legitimate participation.

The social world can contain subworlds that have a stronger set of shared beliefs; for example, World of Warcraft’s hard-core raid players are convinced that World of Warcraft is about succeeding in extremely difficult raids and doing it better than competing guilds. The social world also contains communities, groups characterised by shared interests and strong personal relationships. For example, a serious raid guild might well amount to a community in Tönnies’s sense (c.f. Williams et al. 2006).

The realisation that online hangouts are neither isolated silos nor independent realities, is, of course, not original. Manuel Castells (2000) argued for a vaguely network-based understanding of digital space in 1996, somewhat against the then-prevailing accounts of online activity taking place in relatively isolated virtual communities (e.g., Bruckman 1998; Rheingold 2000), although he maintained a strong distinction between real and virtual. Today’s Internet scholars, such as Danah Boyd (2008), take an integrated view of online activity for granted. In essence, it entails recognising that people are always simultaneously members of many social groupings, which continue to exert influence on them even as they engage in online activities. In MMO related studies, this reality is sometimes still neglected in favour of an isolationist view, but in this dissertation, section 3.6 is dedicated to exploring it.

3.2             Digitalisation of consumption: three waves

Whereas the previous section dealt with identity, interaction and social aggregates in computer-mediated communication and virtual spaces, this section is an introduction to the practices of consumption online. The form of presentation is a simplified history of how the online medium has shaped consumption, culminating with the rise of virtual consumption. Discussions on production and commerce are also included where relevant. This form allows virtual consumption to be understood in context and to be contrasted with other modes of online consumption from which I will argue it is distinct.

The influence that the adoption of Internet in everyday life has had on the practices of consumption can be expressed as a sequence of three waves. The first wave was online shopping: ordering traditional goods and services over the Internet and having them delivered by mail. The paradigmatic service of the online shopping wave is, launched in 1995, and the paradigmatic product is a book. The second wave can be termed the participatory wave, and comprises a range of practices in consumption as well as in production that were set in motion by the spread of social media and social networking technologies. It involves both information goods as well as new ways of consuming material goods. The paradigmatic service of the participatory wave is YouTube, and the paradigmatic product is a video clip. The third wave is virtual consumption, the acquisition and use of virtual goods that are rivalrous by design. Paradigmatic services are Habbo and Cyworld, and the paradigmatic product is a virtual sofa.

3.2.1       Shopping online

The consumer Internet boom that started in the mid-1990s prompted retailers to start building facilities for online shopping. The basic model of online retailing was the same as with the existing modes of remote retailing, mail order catalogues and TV shopping, and utilised most of the same infrastructure: huge warehouses for stock and logistics, mail and delivery companies for distribution, and credit cards for payment. The only thing that was essentially new was the customer’s search, selection and order placement process. Nevertheless, online retailing enabled a number of significant differences in consumption practices compared to brick-and-mortar stores and previous remote retailing methods.

Despite, it could be said, the whole world of new problems it introduced in the form of computer related problems and glitches, online shopping realised certain clear advantages in the areas of convenience and availability (Underhill 2000). Shopping at online stores is available at any time from any place with an Internet connection, allowing access for consumers who might otherwise be excluded due to distance, limited mobility or time constraints. Online shopping can also be fast and efficient compared to the process of selecting from a mail order catalogue and relaying the order to an operator over the phone. Web search tools enable much more efficient price comparisons than traditional modes of shopping do.

On the other hand, online shopping has been criticised for failing to provide some of the joys and benefits of traditional brick-and-mortar retail. Paco Underhill, a retail consultant writing in the late 1990s, identified “three big things that [physical] stores alone can offer shoppers”: “touch, trial or any other sensory stimuli”, “immediate gratification”, and “social interaction”: the company of other shoppers as well as interactions with shop staff (2000, p. 218). According to Underhill, online shopping is more about “orderly, planned acquisition of goods” than the “sensual, experiential aspects of shopping” (2000, p. 218).

But perhaps the most celebrated feature of online shopping is the ability to reach a far wider selection than it is possible to find in even the largest superstores or mail order catalogues (Underhill 2000, Anderson 2006). For example, while a typical Borders bookstore offers a selection of 100 000 books, has an inventory of 3.7 million book titles (Anderson 2006). A similar situation prevails in several other industries and product categories. The massive selection is made possible by the low cost of listing products in an online store as well as efficient searching and browsing features that allow customers on the Web to find what they are looking for.

A consequence of the huge selection is that consumers’ purchases can be distributed over a much wider range of products than what was previously possible, a long tail, enabling greater divergence and fragmentation in tastes and styles. According to Anderson (2006), this allows consumers much greater freedom to express their preferences, not being constrained by their local retailer’s selections. Anderson contrasts manufactured “hit culture” engendered by limited shelf space with a “niche culture”, where consumption patterns reflect the diversity of tastes set free by the movement from geographically defined communities to self-selected communities of interest. Anderson believes that this postmodernist “niche culture” is morally superior, because it reflects people’s tastes in a purer and more natural way. In essence, it allows shoppers to realise “the true shape of demand in our culture, unfiltered by the economics of scarcity” (Anderson 2006, p. 9).

As demonstrated in section 2.2, the notion of “natural” preferences and “true” demand is quite problematic, as consumer demand is always a product of social institutions. In this context, “true” should perhaps be interpreted as “free from the influence of commercial institutions”. Still, the mere availability of choice is obviously no guarantee that consumers can make informed choices. The significance of the first wave is therefore in the broadening of markets rather than in some kind of emancipation from them. The emancipatory potential of ICT becomes more apparent in the second wave, discussed next.

3.2.2       The participatory wave

What is termed here the participatory wave of Internet consumption has been the subject of much enthusiastic discussion and authorship in recent years, under such rubriks as Web 2.0, remix culture and social media (Benkler 2006; Hietanen, Oksanen & Välimäki 2007; Hietanen 2008; Lessig 2004; Scoble & Israel 2006; Surowiecki 2005; Tapscott & Williams 2006). The basic claim is that certain new technologies and, more importantly, new ways of designing online services have lead to a radical empowerment of the consumer in certain processes of production and consumption. Technologies and design techniques such as blogs, RSS feeds, tags, social networking, web applications, Creative Commons licensing and peer-to-peer networking have permitted users to emerge from uninformed shoppers into discerning connoisseurs, from passive consumers to active producer-consumers, and from isolated individuals to “carrot mobs”. This paradigm shift, as it is portrayed in the literature, could be conceptualised as a shift from a model where vertical information flows originate at the producer and are mediated by marketing before terminating at the consumers, to a model where information is exchanged in networks between individuals and organisations.

The consequences of this shift have been most perceptible in the markets for information goods: computer software, music, movies, images, news and any other goods that can be represented in digital form. According to Shapiro and Varian (1999), information goods differ from ordinary goods in two ways. The first is that from a producer’s point of view, information goods involve high fixed costs but low marginal costs. Creating the first copy may require substantial effort and investment, but once that is done, the cost of creating additional copies by duplicating the original is negligible. The second is that from a consumer’s point of view, information goods are experience goods: their value cannot be directly assessed without first experiencing and thus consuming the good. Many goods are experience goods when they are still new, but information goods are always new (Shapiro & Varian 1999, p. 5). To overcome this hurdle, marketers have developed techniques such as trailers and testimonials to impress consumers of the value of their information without giving it away completely.

The first part of the value chain that was to be affected by the participatory wave was distribution. Starting from 1990s, peer-to-peer file sharing programs “empowered” users to duplicate and distribute software, music, movies and digital books to each other in a very efficient manner outside the official distribution channels and schedules. This gave rise to an ongoing conflict between “file sharers” and the entire copyright industry. Although authors of Web 2.0 –related literature would probably not see file sharing as having anything to do with the participatory wave, it is a similar instance of technology changing the role of consumers. In the traditional copyright regime, the production of new information goods, especially “cultural content” such as music and movies, is based on high investment in production and marketing, which is recouped by monopoly profits allowed by copyright. In contrast, the political agenda of file sharers, as expressed by the Pirate Party of Sweden, involves scaling back the copyright regime in favour of free private copying and “culture-sharing”. 51 percent of 16-24 year-old Finns say they have substituted CD purchases with downloading music from the Internet (Statistics Finland 2009, p. 59). At the elections of June 7, 2009, the Swedish Pirate Party won a seat at the European Parliament.

The second change brought about by the participatory wave concerns the value appraisal part of the chain. The web has been a platform for people to express their opinions and experiences regarding products since its popularisation in mid-1990s, but only the latest wave of the so-called “Web 2.0” techniques has allowed that information to be organised, ordered and filtered in ways that make it highly usable to individual consumers (Scoble & Israel 2006). As a result, consumers now have more powerful means and varied angles at their disposal when they seek to assess and compare the value of information goods (Benkler 2006).

The third change brought about by the participatory wave links the terminal part of the traditional value chain, consumption, to its initial part, production. The varied voices on the Internet question not only marketers’ images of what to consume, but also how to consume it. New technologies allow users to move from passively experiencing information goods to actively participating in the experience, appropriating the goods to new uses, and combining and altering the goods to create entirely new experiences. For instance, new software for editing videos, sampling music and touching photographs (often acquired from peer-to-peer networks without paying for a license) has enabled suitably skilled participants to create “remix culture” on the basis of industrially produced cultural products (Lessig 2004). Open-source software and web application mashups represent analogous processes in the technology field. The terms user-created content, prosumerism and peer production are used in the literature to denote consumers’ increased participation in the production of information goods and the blurring of distinctions between consumers and producers (Hietanen, Oksanen & Välimäki 2007; Hietanen 2008; Tapscott & Williams 2006). All of the shifts described above, from distribution through value apprisal to consumption and re-production, are epitomised in the video sharing site YouTube, which allows users to distribute (commercially produced) videos, rate them, comment on them, augment them with captions and annotations, and upload remixes, derivative works and original amateur content.

It is possible to identify similar if less extensive reflections of the participatory wave in the consumption of material goods. Internet auction sites challenge the rigidities of official distribution channels. Efficient methods of information sharing have made connected consumers less reliant on views provided by marketers and word-of-mouth in their geographical community. They have perhaps also contributed to an increasing awareness in the ecological and ethical implications of one’s consumption. Moreover, social networking and mobile communication technologies allow individual consumers to self-organise in ways that improve their traditionally weak bargaining position against vendors. In China, groups formed for the purpose of tuángòu or team buying aim to negotiate lower prices (Montlake 2007), while in United States and Finland, “carrot mobs” persuade businesses towards eco-friendliness (Leivonniemi 2008). In many ways, the participatory wave has enabled onlined consumption to regain much of the sociability, sensuality and experiential aspects of consumption that the first wave of online shopping was said to lack.

In all of the literature referred to above, the new “participatory” consumption behaviours are portrayed as being enabled by new technologies, but by no means determined by them. Rational choice and efficiency considerations are sometimes invoked as the explanans of the behaviour, but as discussed in section 2.1.5, rational choice without a substantive theory of preferences does not explain any behaviour. A set of values, manifesting as the guiding force of the participant-consumer’s actions, can be found implicit in much of the literature. They are clearly not the values of appropriation, accumulation and exclusivity, as found in the traditional status games of consumption, but a restatement of the hacker ethic articulated by Steven Levy (1984): freedom of access, sharing to the benefit of others, using technology to improve the world, creativity as an end in itself and valuing people based on their mental abilities rather than on their material possessions. In other words, the participatory wave of consumption is portrayed as ushering in a new, enlightened, post-materialistic consumer, in comparison to which the petty status games of the material consumer seem positively benighted.

3.2.3       The third wave: virtual consumption

The online shopping wave and the participatory wave are well established in consumption-related literature. In this dissertation, I argue that it is possible to distinguish a third wave of online consumption, virtual consumption. Isolated cases of virtual assets being traded for real money can be traced back to the MUDs of the 1980s. Organised real-money trading began around 1999, when players of Ultima Online, EverQuest and Lineage began to trade their game possessions with other players on Internet auction sites. Habbo, a popular online hangout aimed at teenagers, has been selling virtual goods to its Western users since 2000. Korean hangout Cyworld opened in 1999 with a similar revenue model. In this sense, it could be said that virtual consumption predates both online shopping and the participatory wave. However, it is not until the last few years that virtual consumption has become a mainstream phenomenon in the sense that mainstream Internet users can buy virtual goods in mainstream Internet services such as Facebook.

The distinguishing features of this new wave of consumption are outlined in articles two and three of this dissertation. The biggest difference is in the nature of the goods being consumed. They are digital, but from the consumers’ point of view, their characteristics are almost opposite to the characteristics of information goods. Firstly, they are not abundant, but scarce. Every copy of a virtual good is rivalrous: only one person can “own” it at a time, in contrast to information, which can be shared endlessly (Fairfield 2005). Operators can duplicate virtual goods at will, but to the consumer they are as indivisible as ordinary material commodities. Secondly, the value consumers obtain from virtual goods seems to be primarily related to something else than information and experience. This is suggested by virtual goods’ lesser emphasis on visual, aesthetic and informational qualities in comparison to information goods. Why are consumers nevertheless attracted to these uncopyable and aesthetically modest digital objects is a question that will be the main focus of the following sections. I will first briefly set the scene by outlining the global commercial significance of this new wave of consumption.

To get a sense of the commercial significance of virtual consumption, let us place it in context on two dimensions. The first dimension is its market size compared to the two previous waves of online consumption. The second dimension is geographical area. In industry discussions, the global virtual goods market is usually framed in terms of two major market areas: the “Western market” and the “Asian market” (Allison 2008; Lehtiniemi & Lehdonvirta 2007). The Western market is understood to include North America and Europe, while the Asian market usually mainly refers to Korea, China and Japan. Virtual consumer behaviour is seen as differing considerably between these areas due to technological, cultural and historical factors (Allison 2008).

To illustrate the relative sizes of the three waves of online consumption in these two market areas, Table 1 presents total revenue figures from virtual goods sales, online advertising and online retail in Korea, China and the United States. For the purposes of this illustration, online advertising is considered as a proxy for the participatory wave.[6] Two points are apparent in these figures. The first is that compared to traditional online shopping, virtual consumption is a significantly smaller market. This is particularly the case in the United States, home of the Internet and the leading market in the two previous waves of online consumption. The second point of note is that in Korea and China, virtual goods sales actually exceed those of the United States, despite them being smaller economies. Moreover, in Korea and China, virtual goods sales exceed online advertising revenues and are not quite as dwarfed by online retail revenues as they are in the United States.


Table 1.           2006 total revenues from virtual goods, online advertising and online retail in Korea, China and the U.S. (billions of U.S. Dollars)[7]






Virtual goods

1.1 a

0.9 a

0.3 a

Online advertising

0.7 b

0.6 c

16.8 d

Online retail

14.3 e

2.5 f

146.4 g


These observations support the thesis, common among observers of virtual goods trade (e.g., Castronova 2005, p. 122), that the third wave of online consumption sees Asia in the leading role while the Western market follows. The figures in Table 1 are for 2006, which is the most recent year for which full data was available, but more recent industry estimates suggest that virtual goods sales have grown while maintaining the East-West pattern (Plus Eight Star 2009). Currently being pioneered in the Asian market is the idea of accessing virtual goods through mobile devices, which presents a first step in taking virtual goods out of the online context and into physical social situations. According to Nojima, Japanese DeNA Corporation sells approximately 8 million U.S. Dollars worth of virtual items for mobile phones per month (Nojima 2008, p. 7). In attempting to provide a comprehensive picture of the structures of virtual consumption, it is thus wise for a “Western” scholar to be as mindful as possible of the Asian market.

3.3             Virtual consumption and social status

As discussed above in section 2.2.2, many theorists have seen consumption as a type of social behaviour that is linked to social status within the bounds of some social aggregate. In section 3.1, I examined how social aggregates can exist in computer-mediated spaces, from small virtual communities to massive online social worlds. In this section, I analyse results from empirical studies to show how virtual consumption can be seen as social behaviour within these computer-mediated social aggregates, and how it displays many of the same forms and patterns that conventional modes of consumption have been seen to follow in offline social worlds. The results provide answers to RQ 2: What kind of social structures promote and regulate virtual consumption? and preliminary insights to RQ 1: What kind of benefits do virtual consumers experience from virtual goods?

The analysis is divided into two parts. The first part focuses on relationships between virtual goods and status hierarchies in traditional fantasy MMORPGs, while the second part focuses on virtual consumption in a more open-ended online hangout. I have titled the former as a “traditional economy” to invoke notions of fixed, formal redistribution of goods according to rank, while the latter is titled as a “market economy” to highlight the dominance of market-based exchanges.

3.3.1       Crisis in a traditional online economy

The first genre of online services where real-money trading began in a significant volume were so-called massively-multiplayer online role-playing games (MMORPGs) launched in the late 1990s, described in article five of this dissertation. In the Western market, the leading titles in this sense were Ultima Online and EverQuest, whereas in the Asian market, the leading title was Lineage followed by Ragnarok Online. All these games are set in a medieval fantasy world, and in each game, the player’s task, in very simple terms, is to undertake a “heroic journey” (Bartle 2003, p. 434): a classic story of struggle and personal growth where the protagonist, the player’s avatar, starts from almost nothing and gradually, over many months of gameplay, fights their way to wealth and superhuman prowess. A key game mechanic in these games is that the avatar’s possessions and prowess increase in proportion to the amount of time the player spends in active engagement with the game environment. This results in a pattern of play known as grinding: undertaking repetitive tasks over and over again, for dozens of hours, in order to obtain gradual increases in items and skill points. It is perhaps not surprising that many commentators as well as players themselves compare this aspect of MMORPG gameplay to work (e.g., Yee 2006a; Grimes 2006, pp. 982-985).

By obtaining virtual wealth and prowess players reap “material” benefits such as the ability to dominate in fights against other players. But the most interesting consequence of this design is that it becomes possible to “read” whether a player is a casual adventurer or a dedicated fan who “works” the game for dozens of hours per week simply by looking at the strength and possessions of the avatar they are controlling. In other words, the avatar is a sign that points to the player’s position in what has been termed the “achievement hierarchy” (Lehdonvirta 2005). Those at the top of the hierarchy not only enjoy the “material” benefits of their possessions, but also claim competence and authority in forum discussions and debates touching on topics such as what constitutes legitimate play and how should the game be developed in the future.

The usual moral interpretation of the achievement hierarchy is that players who have “worked” the game so intensely obviously deserve the virtual fruits of their labour, in analogy to the Lockean labour-desert theory (Lehdonvirta 2005). Furthermore, that they and their opinions should deserve the respect and esteem of other players and perhaps even developers is not simply a bid for seniocracy but a reasoned argument for meritocracy: as the most experienced of the players, they should be the most knowledgeable and therefore in the best position to offer guidance. Thus legitimised, the achievement hierarchy along which players must work to climb was the stable backbone of the economy and social structure of the early MMORPGs.

But very soon, or in some cases from the very start of the game, this idyll was unsettled by so-called secondary markets. Some of the high-ranking individuals, tired of the game or in need to money, decided to offer their virtual possessions and avatars for sale at sites like eBay. This evolved to a veritable cottage industry of brokers, dealers and producers, many of them professional, vividly described in Julian Dibbell’s Play Money (2006). As a result, it was now possible for any player, no matter how experienced or inexperienced, dedicated or casual, to obtain high-ranking avatars and possessions simply by purchasing them from a website. Virtual goods were commodified.

Many players expressed horror at this situation (Lehdonvirta 2005): markets were seen as “cheating”, because they allowed anyone to enjoy the benefits of rank without first going through the necessary hardships; moreover, when this happens in a large scale, the traditional link between achievement and avatar is broken, and it becomes impossible to “read” a persons social status from their possessions. While commodification preserved the material function of virtual goods, it was stripping them of their meaning. Thus many players demanded, and many of the developers granted, rules against the purchasing of virtual goods. Trading remained permissible in Ultima Online, but in EverQuest became an offense for which one’s account could be terminated. This prohibition remains, and is to varying degrees enforced, in many of today’s popular MMO games.

The events described above read like a classic story of the destructive effects of markets on traditional social order, recalling Marxist criticisms of commodification as well as Adorno’s longing for original values. The strict prohibition of real-money trading presents itself as a brave stand against colonisation by markets and for the conservation of better, more original values. But the story described above also facilitates an alternative interpretation, one with almost opposite moral implications. Legal scholar Joshua Fairfield has used the phrase “time aristocracy” to refer to the players in the upper strata of the achievement hierarchy, drawing attention to the fact that they are privileged in the sense of being able to spend a lot of time in the game environment (Lehdonvirta 2007). This can be contrasted with “money aristocracy”, individuals with more money but less time at their disposal. The traditional MMORPG is ruled by the time aristocracy, because they are the only ones with the necessary resources to reach the top of the hierarchy. The introduction of markets has a democratising effect, as it allows access to those resources by the money aristocracy. From this perspective, the prohibition against virtual goods purchases presents itself as a sumptuary law designed to uphold traditional order by controlling lower classes’ consumption.

The idea of the real-money trading controversy as a struggle between time aristocracy and money aristocracy is lent some support by an unpublished survey-based study of MMORPG players, where it was found that older respondents were much more likely to purchase virtual goods than younger respondents (Yee 2005). The most traditional computer game players are young people and students who are able to dedicate significant time to their hobby, but gaming is also increasingy popular among the working adult population. In a series of surveys of MMORPG players, the players’ median age was found to be 25 years and upper quartile 32 years (Yee 2006). On the other hand, phrasing the situation in terms of class struggle perhaps makes it sound more consequential than it really is. MMORPGs are usually designed in such a way that players who wish to play together have to have avatars of approximately the same level of prowess. If working adults wish to spend time playing with their children (as described by e.g., Taylor 2006, pp. 52-56), they must make purchases to keep up with the youngers’ pace.

Finally, it is interesting to note that the conflict over virtual goods markets is more of an issue in the Western market than it is in the East-Asian market. In China, Korea and Japan, virtual goods transactions are not uncontroversial, but they are more commonplace and developers have adapted their game designs and business models around the practice (Huhh 2008; Nojima 2007). Virtual goods transactions are also sometimes embedded in other social and business relationships. Article one of this dissertation describes Chinese “trans-game megaguilds” that feud over such things as market shares in the mass-production of MMORPG goods. In Korea, Huhh (2008) traces virtual goods transactions to small businesses’ marketing practices:


[R]eal-money trading [...] originated from the promotional strategies of PC bangs [gaming cafés]. In 2000, as the competition among PC bangs increasingly intensified, some invented promotional tools for attracting customers. One such promotional activity was the purchase of in-game items from their expert customers to entice new customers. Thus the birth and rise of RMT in Korea directly resulted from local trading between PC bang owners and their visitors. [...] Around 2001, some PC bangs started turning themselves into so-called gold farming shops that specialized in making in-game items for RMT. Because many players were on the receiving end of RMT, the trend was viewed favorably, which undoubtedly ensured the prospering of RMT. (Huhh 2008, pp. 31-32)


In recent years, Western MMO operators have increasingly warmed up to the idea of markets where virtual goods can be purchased for real money. World of Warcraft remains strictly against real-money trading, but the sequel to EverQuest has an official marketplace for such transactions on some servers. Moreover, many MMOs, casual gaming sites and social games are now selling virtual goods to their users themselves, as an alternative to the old subscription fee -based method of reaping revenues. In these services, the traditional economy of the MMORPGs is largely replaced by the market economy. The next section examines what implications this has for the social meaning of virtual goods.

3.3.2       Jockeying for positions in an online market economy

Article two of this dissertation presents an empirical study of Habbo, an online service maintained by Finnish company Sulake that earns most of its revenues by selling virtual goods to its users. The main feature of the service is a virtual environment resembling a giant contemporary Western indoor space, presented in isometric “retro style” 3D graphics and populated by blocky avatars, each controlled by a user. In addition, it contains user homepages, group homepages, group discussion forums and social networking style features. According to Sulake, Habbo is visited by a total of 9.5 million different users each month, which would make it one of the most popular MMOs, about ten times as popular as Second Life. A localised version of Habbo is available in 32 countries. In addition to these official Habbo sites, there are a large number of so-called “fansites”: websites maintained by users independently of Sulake that chronicle events taking place in the service, host discussions and interviews of notable users, present stories and art that extend Habbo’s official fiction, and analyse information such as observed trading prices of virtual goods.

Using the concepts discussed in section 3.1, each of the localised instances of Habbo can be described as a separate virtual space and the central site of a social world; for instance, the world of Finnish Habbo or the world of Spanish-speaking Habbo. Each of these social worlds also extends beyond their commercially-maintained central site to user-maintained sites and mediums. On the other hand, it can be asked whether a very open-ended environment such as Habbo contains a degree of shared culture sufficient to be described as a single social world, or whether the membership of each localised instance instead breaks down into several social worlds that have little to do with each other. In article two, the observations speak for a degree of commonality of beliefs, particularly regarding virtual items.

A major feature of Habbo’s virtual space are virtual items, of which there is a staggering variety, from “rubber ducks” to “festive red pillows” and from “black laser portals” to “victorian streetlights”. Each item is owned by an avatar, and can be held in storage or deployed in one of the avatar’s rooms for use and display. In contrast to MMORPG economies, access to most goods in Habbo is not regulated based on the individual’s achievements, time served or any other such factor. Instead, goods are available for purchase to anyone using a virtual currency that is obtained using the local national currency. In slightly simplified terms, each item is first purchased from Sulake, after which users trade them between each other in the course of their activities.

Due to the way goods in Habbo are purchased instead of earned, they do not have any inherent link to time served in the way they did in traditional MMORPG economies. However, article four of this dissertation indicates that users who visit Habbo every day are nevertheless much more likely to purchase virtual goods than infrequent visitors. Significant virtual possessions probably continue to be a mark of dedicated participation even in a market-based economy, although the connection is less straightforward.

In article two, a somewhat Veblenian pattern of the use of rare and expensive items to speak for one’s wealth and social status was identified. For some users, acquiring and displaying such status items and comparing them to the possessions of other users is a central way of participating in the Habbo world. According to statistical analyses of survey data presented in article four of this dissertation, virtual wealth reflects to some extent the person’s real income. It is also interesting to note in this context that male users spend significantly more money in Habbo than female users, even though both genders are equally represented in the user base. Being considered “rich” by other Habbo users can confer tangible powers, such as access to private locations.

Wealth is not the only axis along which members of the Habbo world seek to stratify themselves and each other. Knowledge of Habbo culture is another such axis. If one shows a lack of knowledge regarding conversational conventions, the celebrity canon, popular venues, or the value and history of various virtual items, one risks being marginalised as a “newbie”. Some “experienced” users claimed to be able to recognise new users based on their clothing style alone. Furthermore, it is possible to earn significant recognition, even the aforementioned celebrity status, by hosting a popular activity or venue, such as a soccer game or a match making club. Celebrities receive a lot of attention from other users: they are interviewed on fansites and their consumption styles are sometimes imitated by other users. Having such celebrities as friends is also a positive status sign.

It is easy to see the above observations in the framework of a Bourdieuan capital system: financial, cultural and social capital as parallel resources in a game where participants seek to position themselves favourably in the field constituted by the Habbo world. The statistical analyses in article four allow us to make some interesting conjectures regarding the convertibility of these capitals. Firstly, users who report doing a lot of organising games and events are twice as likely to have spent money in the service during the past month compared to those users who report doing little or no organising. Observations suggest that this reflects a need to spend money on components from which to construct attractive and functional venues as well as to buy prizes that can be handed out to winners in order to attract popularity. In other words, users who are attempting to establish themselves as cultural leaders or perhaps maintain their existing cultural capital are investing a significant amount of financial capital in doing so. In principle, mechanisms exist in Habbo through which cultural capital can also translate back into financial capital; for example, some organisers are requesting admission or membership fees from their participants. The data does not permit a quantitative assessment of this payback, however.

Secondly, the analyses indicate a relationship between spending money and having a large number of contacts in one’s friends list. A more tentative result is that there is a relationship between spending money and the activity of making new friends. In the United Kingdom version of Habbo, spending money is positively associated with making new friends, whereas among Spanish and Mexican Habbo users, spending is negatively associated with making new friends. In the fourth country included in the study, Japan, no relationship could be observed. This could reflect differences in the way financial capital translates to social capital in different Habbo worlds, although more research is necessary before strong conclusions can be drawn.

In conclusion, if almost all virtual goods in the worlds of Habbo can be obtained by anyone who is willing to pay for them, does this not mean that the goods can have no inherent link to the individual’s status or dedication in the way they did in traditional MMORPG economies? If so, the only thing the goods would seem to be able to signify is the wealth of the player who purchased them, making them a kind of conspicuously meaningless form of consumption. But there are two objections to this view. Firstly, the evidence suggests that it is the most dedicated users who obtain the greatest possessions in both types of virtual economies, whether it is accomplished through gameplay (MMORPG) or through direct purchases (Habbo). Secondly, when the dynamics of cultural and social capital are added into the analysis, it becomes apparent that in Habbo’s market economy, the different types and shapes of virtual goods also become subjects of taste and the ability to make distinctions. Besides the usual labels of “rare” and “common”, additional connotations such as fashionable, sophisticated, old-fashioned and vulgar are attached to the commodities, and knowledge of these values becomes a basis for classifying individuals within the social world. Thus it can be said that goods are certaingly not meaningless even in Habbo’s market-based virtual economy.

Finally, it is worth noting that in both MMORPG and Habbo worlds, goods are also used in the performance of social relationships: virtual items are presented as gifts to other participants and used to pay for favours. This flow of virtual items can be seen as making visible the “ley lines” of social relationships, as well as reproducing and strengthening them.

3.4             Virtual consumption, identity and experience

In the previous section, virtual goods were discussed in their capacity to act as markers of social status, and in the performance of social relationships. Although statistical analyses presented in article four of this dissertation lend some support to this perspective, they also suggest that a greater proportion of users’ consumption behaviour is not explained by the intensity of their participation, the extent of their social behaviour or their real-life socio-demographic background. Explanations for this variance should be sought in other directions. Sections 2.2.3 and 2.2.4, above, presented approaches to consumption that view it as a matter of individual self-identity, emotional experience and even art. In this section, I discuss observations from articles two and three that link these perspectives to virtual consumption. The results provide answers to RQ 1: What kind of benefits do virtual consumers experience from virtual goods? as well as additional answers to RQ 2.

Article two discusses various ways in which the users of Habbo can shape their “virtual bodies”, the way they appear to other users, by means of consumption choices. If this body is understood broadly, it can include not only the avatar but the rooms and distinctive arrangements of virtual items and furniture through which the user can, in principle at least, express themselves. Each user can also have more than one avatar, each of which can represent either a different social identity or another “face” of what is known to be the same person. Users can also use a different body/social identity to participate in different subworlds and communities of the Habbo world.

In practice, users construct their overall appearance by making selections from a large and constantly expanding variety of virtual body parts, clothes, wallpapers, items and furniture. The design and appearance of these building blocks echoes bygone eras, national cultural symbols, fantasy and science fiction canons, contemporary fashions, and other sources the designers at Sulake draw their inspirations from. Users combine these blocks in numerous ways in a process that could be likened to creative bricolage. The results are not only variations and mixtures of the styles pre-programmed by designers, but also call into existence completely new styles that the designers had not thought of. An example of this, given in article two, is the way a user has combined items to convey the appearance of a doctor in a hospital room, even though no notions related to hospitals or doctors were programmed in by the designers. Similar creative combining of virtual items in order to convey an idea completely different from the items’ intended meaning has also been documented in Ultima Online (Ondrejka 2004).

“Innovations” such as the way to construct a hospital and dress as a doctor can spread, and become more or less canonical styles. Styles can act as a means of establishing group identity. Article two mentions two cases where a certain type of dress is a formal requirement of belonging to a certain group. This could be related to discussions of discipline, uniform and power relationships (Davis 1992, pp. 65-65; Barnard 2002, pp. 112-113), but in the context of voluntary and fairly informal Habbo associations, it is easier to interpret it in terms of communicating and strengthening group identity and the feeling of belonging.

Above these groups and communities in terms of both scale and informality are aggregates that could be termed lifestyle groups: groups characterised by their tastes and virtual consumption choices, rather than, for example, strong personal relationships. According to the discussion on lifestyle groups in section 2.2.3, they can be seen as an alternative or orthogonal classification to traditional socio-economic strata or status groups characterised by the possession of various types of capital. One such lifestyle group, identified in article two and described in more detail in Johnson and Sihvonen (2009), are goths: a style characterised by dark, gloomy, Victorian looks, horror themes and a sense of irony.

In the virtual space of Habbo, the goth style takes very similar forms as in physical spaces, but it also shows differences. The differences can be due to the limitations and possibilities of the medium, but can also represent idiosyncrasies of the goth culture inside the world of Habbo. This highlights the question of the relationship between offline identities and identities in virtual spaces. A goth body in Habbo could be an extension of a goth identity at school and leisure time, or it could be playful experimentation with an identity that is alien to oneself in other contexts. I return to this issue below in section 3.6.

The above discussions have not yet strayed far from the notion of goods as social markers insofar as all meaning and value of the goods is attributed to social reality, extrinsic to the goods themselves. In article two it is pointed out that when queried about why they chose a particular virtual attire, users do not usually respond by referring to social status or lifestyle groups, but by using aesthetic argumentation: it pleases the eye. To what extent is it possible to distinguish between “genuine” aesthetic and hedonic sensations as opposed to subconscious social and emulative motivations is a difficult question both theoretically and empirically, but article three of this dissertation examines the issue on a very practical level. Using a wide variety of qualitative data, a number of concrete attributes are identified that users pay attention to when choosing a virtual item. Some of these attributes, it is argued, lend themselves better to establishing social distinctions, while others are more easily seen as delivering individual psychological benefits, such as aesthetic experiences or emotional sensations. Article three thus provides a concrete view to what kind of benefits users seek from virtual goods.

For instance, one socially significant item attribute that relates to the prestige of the virtual item is provenance. This term is usually associated with art and antique, and refers to their place of origin, earliest known history or previous owners (New Oxford American Dictionary). The concept of “virtual antique” may sound oxymoronic, because digital objects do not physically age and in general do not accumulate any sort of changes to their shape that would attest of past events. One instance of a virtual item is generally identical to another. But observations in article three and article two suggest that if a virtual good can be distinguished from other similar ones, it can take up a “social life” of its own, wherein events such as remarkable past owners become valuable distinctions that are added to is reputation. Individual users also attach personal meanings and feelings of nostalgia to virtual goods with which they have shared memorable times. The oldest Habbo furniture is soon a decade old, and some castles in Ultima Online are even older, so they potentially have a lot of stories to tell. Thus the notions of provenance and authenticity can be important in understanding the social as well as psychological value of virtual goods.

Another socially significant item attribute is rarity: rare items are better at establishing social distance than common ones. But the hunt for rare objects can also be described as an individualistic hedonic experience: a thrilling psychological pursuit that exists in isolation from any social meaning the objects may possibly have (c.f. Belk 1995). Other hedonic experiences that virtual goods can give rise to include sexual arousal, the excitement of discovering new places and vistas, and the joy of playful creation. In order not to over-emphasise social uses of virtual goods at the expense neglecting individual experiential ones, it is useful to remember that in many ways the historical roots of these graphical virtual spaces and virtual goods are in single-player video games. Habbo’s distinctive design borrows much from old Commodore 64 games, while Ultima Online is the first multiplayer title in an illustrious series of single player games spanning two decades. Whatever joys could be derived from virtual goods in these games must have been primarly hedonic and experiential, and only secondarily, if at all, social. Article two traces a brief history of digital “consumption games” from single-player to massively multiplayer online.

3.5             Designing spaces, producing needs

In the sections above, I have described how spending on virtual goods is motivated and structured by social status games, construction and expression of identity, and the pursuit of hedonic experiences and art. In each of these discussions, the environment in which the activity takes place, the virtual space with its various features, including the virtual goods themselves, has remained on the background. Yet it is obvious that by essentially determining the range of possible as well as impossible courses of action within an MMO or other online hangout, this architecture influences virtual consumption behaviour. In this section, I seek to outline the main mechanisms of this influence as well as the role of the operator more generally, based on findings from the articles constituting this dissertation. The results provide answers to RQ 3: What is the role of the operators in promoting and regulating virtual consumption? as well as an additional answer to RQ 1, namely, the perceived usefulness of virtual goods.

In previous sections, the desirability of virtual goods has been located in their symbolic and aesthetic qualities. The idea of use-value or practical usefulness seems far removed from these tiny figures on the screen. But if usefulness is understood instrumentally, as the capacity to achieve some separately defined end, then virtual goods can be useful in their own environments, in the same way as the rake is a useful tool in the garden but not much elsewhere.

In article three, some uses to which virtual goods can be put are discussed. The archetypal example is the use of virtual swords and shields to vanquish computer-controlled monsters generated by the environment in MMORPGs. The operator makes the swords and shields desirable by first programming a challenging environment and then trying to convince players that overcoming these challenges is a worthwhile goal. All the other examples follow essentially the same pattern, where the operator is ultimately responsible for creating both the problem as well as its proposed solution, the latter sometimes costing money.

Though the tendency to compete for status positions is something that participants most likely bring to the MMO with them, the operator provides the means for its realisation and has ways to adjust its intensity. This is described in article three and article two. Firstly, the operator defines the “frame of fashion”, the range of surfaces and behaviours over which it is possible to exercise choice. Secondly, within that frame, the operator can manufacture “artificial scarcity”, providing participants with lines of rare and exclusive collectibles that are ideal material for status competition. Thirdly, providing participants with more ways to flaunt their status or possessions is likely to intensify this competition. Finally, the operator can destroy existing status positions by flooding the market, so that what were once exclusive rarities are suddenly at the reach of everyone. New rarities can then be sold to fill the vacuum.

Article two discusses the use of virtual goods to construct roles or identity positions in Habbo, of which goths are the most prominent example. As with the rebellious styles described above in section 2.2.3, the goth style initially involved the creative re-appropriation of mainstream Habbo goods, but was eventually commercialised as its constituency grew. According to Johnson and Sihvonen,


gothic players started out by using the ‘Halloween’ furniture line of candles, skulls, and bats for their own purposes. The developers noted the popularity of the ‘Halloween’ line, and in 2007, they incorporated parts of the gothic subculture into the core of Habbo. A gothic line of furniture emerged as a set of its own (Johnson & Sihvonen 2009, p. 19)


Habbo’s operator also actively constructs and promotes new roles and styles by introducing and advertising sets of goods designed around a theme. For example, at the time of writing, a set of countryside-themed items is being promoted, along with suggestions to assume the role of a relaxed farmer.

Finally, article two examines virtual consumption as a creative or even artistic activity, where goods offered by the Habbo platform act as building blocks. The operator encourages this creative activity by organising design competitions and promoting the works of creative individuals. Whether, then, the desire to create ultimately stems from the individuals’ artistic visions or from the status game into which the commercial structure turns it, is a question common in many fields of creativity.

On the surface it would therefore seem that by designing every detail of the architecture within which interactions in an MMO take place, the operator has nearly limitless power to shape the practices of virtual consumption within its service, and can harness it as a mechanism to relieve committed users of all their disposable income. In a digital environment, code is stronger than law (Lessig 1999). But there is a simple mechanism that considerably limits the operator’s power: if users begin to feel that the challenges are not worth their time and money, that obtaining social status and expressing identity costs more in this world than it is worth, and that the building blocks of creativity are too expensive on this platform, then they may take the step to migrate to a new arena, either as individuals or as parts of the whole social world. This might mean moving to another MMO that is easier to commit to, or quitting MMOs altogether and replacing them with another pastime or a new job. And even if users do stay in the MMO, the social world as a whole may end up not recognising and not using mechanisms of status gaming that the operator has built into the platform. We do not know how “susceptible” to the operator’s marketing users are, but surveys suggest that most MMO users are almost certaingly not children (Yee 2006b; 2007) and that the users who are most likely to purchase virtual goods are adults rather than children (article four of this dissertation).

3.6             Social networks and the offline impact of virtual consumption

So far the model under which I have analysed virtual consumption has more or less assumed an online social world that is largely isolated from the rest of the world and functions according to its own internal structure and dynamics. This ideal type permits the clear exposition of status strata and mechanics of cultural capital and social identity as drivers of virtual consumption. It also affords a clear view into the way in which the operator of the service promotes and shapes virtual consumption by designing the most important aspects of the technical architecture on which the world functions. However, as argued in section 3.1.4 above, in order to obtain a full picture of the forces that shape participants’ behaviour inside an MMO, it is also necessary to consider how the online social world overlaps with other, established worlds such as family, school, workplace and consumption. In this section, I summarise evidence from different articles of this dissertation to examine how the overlap influences virtual consumption. The results provide additional answers to RQ 2: What kind of social structures promote and regulate virtual consumption? by describing the influence of real-world social structures. The results also provide additional insights to RQ 3 concerning operators’ inclusion of real-world symbols into virtual goods, as well as to RQ 1 concerning real-world social uses of virtual goods.

The claim that MMOs allow participants to completely break free from their previous identity and form a new “virtual identity” in an online social world is criticised in article one. Observations suggest that people bring their values, attitudes and cultural resources to the new environment and that these have an influence on the way participants present themselves. At the same time, participation is shaped by constraints imposed to the body in the physical environment; for instance, gender-differentiated responses from parents (Lin 2008). The notion of disembodiment is criticised on the basis that these “real-world” structures are to some degree reflected in the user’s virtual body. For example, Yee (2007) reports that certain character creation choices in MMORPGs correlate with age and gender. From here, it is a small step to hypothesise that the influence of socio-demographic structures is also carried through to virtual consumption behaviour. Indeed, in article four of this dissertation, statistical analyses of survey data from three Habbo worlds indicate that respondents’ virtual consumption behaviour is significantly influenced by personal income and in some countries also by gender and age.

The influence of outside social structures on activities inside an MMO can be organised conceptually using the concept of social worlds, as argued in article one. Separating the technological platform of the MMO (the virtual space) from the users of the MMO (the social world) makes it easy to understand how “outside” social worlds can extend into and share a virtual space with its “core” social world centering around gaming activity. For example, the goth identity discussed in article two has significant impact on its adherents’ virtual consumption decisions. Johnson and Sihvonen (2009) show that this Habbo goth phenomenon is linked to the global gothic youth subculture. The “world of goth” has thus entered the virtual space of Habbo. It overlaps with the core Habbo world, leaving individuals caught in the overlap to negotiate between the cultures and structures of two different worlds. Other prominent examples are the penetration of family and business circles into virtual spaces. And as the previous paragraph suggests, even if the individual finds themselves the only representative of such a group in a virtual space, they carry the influence of that group with them: it is doubtful if such memberships are ever left behind completely.

Responding to what they see as market demand from various offline subcultures and social worlds crisscrossing their virtual spaces, some virtual goods vendors have begun to sell goods that are specifically designed to appeal to those groups by incorporating their favoured styles and symbols. In the previous section, it was described how a gothic line of furniture emerged in Habbo. Article three of this dissertation describes a number of similar cases where outside cultural symbols are incorporated into virtual goods. Some of these are quite mainstream, such as Christmas trees and Halloween costumes. Others are more subcultural: football team colours, popular anime characters, and virtual merchandise for artists, movies and television shows. Thus the world of football, for example, obtains a firm standing in that particular virtual space. The area where football fans can spend on football merchandise expands, affecting the spending patterns of individuals caught in the overlap.

Thus far the discussion has dwelled on mechanisms through which positions in real-world structures affect virtual consumption. A more remarkable claim, suggested in article two, is that individuals may attempt to use virtual consumption to affect their positions in real-world structures. Consider the following examples: Pinckard (2006) describes business acquaintances gathering in World of Warcraft to enjoy their free time, discuss business matters and build networks, much in the same way as some businessmen do on golf courses. James Gorman describes a situation that can happen when family members play MMOs together:


This one I’ll buy for you,’ he [his son] said, pointing out the Plated Belt of Thorns (which I now wear), ‘but if you go for the more expensive one, you’ll have to pay yourself.’ I could hear my own voice, in the aisles of Toys’R’Us, urging moderation in the purchase of Beast War transformers. (quoted in Taylor 2006, p. 53)


These examples suggest that as social worlds extend themselves into virtual spaces, the structures and dynamics of the virtual spaces start playing a part in those social worlds. Article one of this dissertation contains more examples to support this claim. As virtual consumption is connected to the dynamics of status and identity in virtual spaces, the result is that virtual consumption could also begin to play a part in these social worlds, as hinted by Gorman in the quote above. Another way to phrase this idea is that social worlds based entirely in virtual spaces (e.g., the world of Habbo) involve only virtual goods in their status games, while social worlds based entirely on face-to-face interactions involve only material goods; social worlds that fall somewhere in between involve both material goods as well as virtual goods in their games of status and identity. More research is necessary to fully substantiate this claim, however.

To conclude this section, I will briefly consider social networking sites in light of the above discussion. The notion that a virtual space begets its own “core social world” is based on observing old-fashioned virtual communities, MUDs and MMORPGs. In more open-ended MMOs such as Habbo, a single, coherent social world becomes somewhat more difficult to identify, and the influence of outside social worlds becomes more apparent. In social networking sites, such as Facebook and IRC-Galleria (discussed in article three of this dissertation), it is difficult to perceive almost any signs of a core social world. Ishii and Ogasahara (2007) distinguish between “virtual network -based” and “real group -based” online communities. In accordance with their design, social networking sites act primarily as the virtual dimension of existing social networks. It is therefore interesting to note that both Facebook and IRC-Galleria sell virtual goods to their users. Whatever social uses those goods have, they must be oriented mainly towards existing social relationships as opposed to being a way to impress virtual friends in a fictional universe.


4                 Conclusions and discussion

The primary research question of this study is, why do people spend real money on virtual goods? This why-question was separated into three what-questions that asked us to provide details on different kinds of mechanisms that can explain virtual consumption behaviour. In the sections above, I provided such details by presenting syntheses and analyses of the results of the articles constituting this dissertation. It was found that participants experience social, hedonic and instrumental benefits from the consumption of virtual goods. It was moreover found that social structures, including in particular hierarchies of social status, cultural capital, performance of identity positions, and group memberships, promote and regulate virtual consumption behaviour, so that differences in individuals’ virtual consumption choices can in many cases be explained by referring to differing positions within these structures. The operator was found to be in a position to facilitate and exercise influence over all of these mechanisms. In the following sections, I consider what can be said about the why-question on the basis of these findings while relating them to the larger context of how virtual consumption is conceived of as a field human activity. In the final section, I take a normative view on virtual consumption and consider its role in the world of economic crises, technological alienation and ecological catastrophe.

4.1             Virtual goods are real

The first thing that can be concluded from all that has been presented above is this: the position according to which spending real money on virtual goods is insane because the goods “do not really exist” is untenable. Despite their name, virtual goods are “real” in the ontological sense that they exist in the same reality as other goods. They have a physical manifestation, often a visual form, which can be experienced by many people. They also make their presence felt through other mechanisms. Virtual goods are not figments of imagination, although they can give rise to a strong emotional or dream component in the mind of a consumer, in the same way that many brands and consumer goods seek to do.

On the other hand, those who assert that virtual goods are not “real” are probably not meaning it in the ontological sense, but rather in a more practical and colloquial sense. Virtual goods are digital and limited to digital spaces only. Even if we accept that virtual goods are technically part of the same reality as everything else, it can be argued that in practice they are not present in most situations or their impact is so insubstantial that they are more like fantasy than actual goods. Turn the computer off, and their thin link to reality disappears. Thus virtual goods “do not really exist” in the way the living room sofa does.

This study challenges the view presented above in two ways. Firstly, it questions the assumption that the “material world” always has primacy over the “digital world”. Studies of media use show that the proportion of time spent with electronic media continues to increase even in countries where it is already high (Räsänen 2008; Dentsu et al. 2009). For people who interact mostly in the digital world, it is the living room sofa that lacks presence and impact in most situations. If presence and impact are the measures of reality, it is the sofa that must be termed “unreal” in such a case. Furthermore, the digital world is increasingly penetrating into face-to-face social situations. Mobile devices, public display screens, and in the near future, wearable computing and augmented reality applications make it possible for virtual objects to have presence and impact in social situations of the material world (Montola & Stenros 2009; Nojima 2008). I have participated in research where ubiquitous computing technologies are used to superimpose digital game mechanics and virtual objects on top of day-to-day activities, with the result that these objects start to influence the way people conduct their daily lives (Nakajima et al. 2008; Shiraishi et al. 2009).

Secondly, this study joins several others in advocating a move beyond the dichotomous “real world” vs. “digital world” model in favour of a more realistic understanding of the role of digital communication in everyday life. Immersive 3D environments and other massively-multiuser online services are impressive hubs of human activity, so much so that it can be tempting to compare them to whole new worlds, countries or city-states, and to contrast them with the “real life” which they supposedly stand apart from. But upon closer observation, two things become apparent: One, that actions, interests, norms and networks overlap and intersect freely between different arenas, whether physical places or virtual spaces. Two, that “real life” is not the monolithic and rational whole it is implied in these discussions to be. Strauss’s social worlds, Bourdieu’s concept of fields and social network analysis are some of the attempts to conceptualise the fragmentation inherent in society and everyday experience. In many cases, the difference between face-to-face communication and digital communication does not represent a significant dividing line, certainly not as significant as the difference between family, colleagues and gaming friends, for example.

From this perspective, the position of the living room sofa and the virtual sofa depend not so much on whether one is “in the digital world” or in “real life”, but on which of many worlds one is addressing, regardless of the channel of communication. How virtual goods are regarded in a given world has some relation to whether the members of that world usually convene face-to-face or in online spaces, but is by no means determined by it. It is time to give up the idea that virtual goods exist in a separate “digital world” and recognise that they are part of the world of consumption. One answer to the primary research question of this study is therefore that people buy virtual goods for the very same reasons as they buy other goods.

4.2             Consumption as a game

In this section, I will elaborate briefly on the different factors that lead people to buy virtual goods, and outline a model of consumption with some wider applicability.

According to the assumptions of rational choice theory, people who spend money on virtual goods must experience some sort of benefit from those goods that exceeds the perceived benefit obtainable by spending the money elsewhere. This study identified several ways in which individuals can experience benefits from virtual goods: virtual goods can have functional properties that help the individual realise their goals; virtual goods can deliver emotional and aesthetic sensations; and virtual goods can contribute to self-identity and enhance social status.

However, as suggested in the previous section, these benefits must always be defined against the backdrop of a field in which the individual operates. Some of the most important playfields in contemporary life are school, career and family. In all of these, traditional consumption plays a part as individuals make their moves. When virtual consumption first emerged, it bore no influence on these big games. Today, there is evidence suggesting that virtual goods are involved in the daily activities of some families and workplaces. In fact, it is probably a reality in many neighbourhoods that the coolest kid on the block is no longer the one with the toughest plastic action figure, but the strongest World of Warcraft character. For the most part, though, the utility of virtual goods most likely continues to be realised within the new social worlds that have emerged online. Depending on which of life’s games the individual is participating in, a virtual sofa may or may not deliver more value for money than the living room sofa.

Moreover, a central theme in this dissertation has been the way in which social structures influence the individual’s perception of what goods are desirable and what goods are available for consumption in the first place. One example of the latter is the norm against real-money purchases in many competitive MMORPGs. This study also revealed gender-based differences in virtual consumption, which can possibly be traced to norms regarding appropriate consumption styles for girls and boys. Young consumers’ decisions are constrained by parents, who have different ideas about what games their offspring should be playing. Lack of agency may extend to older family members as well, especially in more collectivist cultures. Examples of positive consumption norms are found in the way consumption is associated with social status and membership in lifestyle groups.

A third aspect of virtual consumption is the role of the operator. On one hand, it was recognised that by designing every detail of the architecture within which interactions in an MMO take place, the operator has considerable power to shape the practices of virtual consumption, and can certainly build the consumption of “useless” virtual goods as a near-necessity into its service. On the other hand, it was recognised that if users find themselves frustrated by the apparently meaningless need to consume, they may leave the MMO in favour of another MMO, or even some completely different social world, such as a new hobby. The key task of the operator is to ensure that users maintain interest in the service, or rather, in the stakes that are in play in the social worlds that live on it. Bourdieu has defined interest as follows:


Interest is […] to participate, to admit that the game is worth playing and that the stakes created in and through the fact of playing are worth pursuing; it is to recognize the game and to recognize its stakes. (Bourdieu 1998, p. 77)


The games that Bourdieu refers to are not MMOs or even table-top role-playing games, but “social games” played on every field from academia to politics (Bourdieu 1998, p. 78). Those who have interest, who have bought into the game and internalised its rules, the game is self-evident: the question of whether it makes sense does not even arise. Thus for example in the field of gardening, one encounters numerous problems as well as established solutions to them that frequently involve the application of commercial products; possibilities for social one-upmanship that most probably involve additional spending; and possibilities for self-expression that likewise require effort and spending. Those who partake in it as a hobby are unlikely to ask why the struggle to shape vegetation against its natural tendencies is seen as an important pursuit among contemporary Western middle class, but they are probably more than willing to question the idea of stacking virtual pieces of furniture on top of each other. Similar ideas regarding the cultural construction of consumption are expressed by, for instance, Featherstone (1991), Bauman and May (2001), and Zelizer (2002b).

Based on the ideas above, it is possible to combine the three explanans of consumption outlined above – rational benefit calculations, social structures and marketing-architectures – into a single model of consumption as a game. A game has participants, rules, objectives and organisers. The task of the organisers is to convince people into joining the game as participants, who accept the objectives of the game and learn the rules through which it is played. In the case of consumption games, the organisers are frequently marketers, and the rules involve goods and spending as instruments in the advancement towards the objectives. Participants can also develop new rules and drop old ones, but if a resulting ruleset becomes incompatible with the original rules, it branches into a separate game with the rulemaker-participant as its organiser. At stake in each game is nothing more and nothing less than power and influence inside the game, but through individuals who participate in several games, as well as through shared gamepieces such as money, the outcomes of one game can affect the outcomes of other games.[8]

From this perspective, marketing is about recruiting participants to a game as well as establishing its rules. Designing physical architectures, from online hangouts to golf clubs and suburbs, is likewise about establishing playfields and tangible aspects of the rules. Social structures define different positions that it is possible to occupy in a game, as well as the rules for moving between these positions. Calculations of rational benefit are simply assessments of which move to make next. The set of possible moves depends on the participant’s current position and the surrounding landscape. The relative preferabilities of the moves ultimately depend on the objectives of the game. Different strategies and routes can be chosen, as the ambiguous nature of the rules makes it impossible to determine an optimal path.

It is obviously easier to succeed in smaller games than in large games with many participants, but the perceived rewards of success are also smaller. In the largest games, the fields are almost limitless, but difficult to navigate far. In any case, if one reaches the far end of a field and “wins” the game, the only reward is seeing beyond the playfield and realising the game for what it was, instantly loosing interest in its stakes and all that has been gained. On a very abstract level, this is what happens in “mudflation”.

The wish to escape the eventuality of reaching the limits of a game also explains our desire to adopt new games. In the next section, I will argue that what is new about virtual consumption is that it enables materialist games in virtual spaces. As a small counterpoint to the rather nihilist view of consumption articulated in this section, I will also touch on the personal meaning of virtual goods.

4.3             Digital post-materialism versus virtual matter

The adoption of online consumption can be seen as a series of three waves: traditional online shopping, participatory consumption, and virtual consumption (section 3.2, above). Each of these waves can be seen as a social innovation made possible by key enabling technologies, without which they could not have emerged. We can therefore offer a different angle into the question of why people buy virtual commodities by considering the enabling technological innovations and asking, why did people adopt this technology? What is the new benefit it ostensibly offers beyond earlier technologies?

The picture that emerges in this dissertation is the following. The first wave of online shopping no doubt attracted pioneering consumers because of its novelty and positive aura of being modern, but its main value proposal is in the convenience, availability, efficiency and ease of selecting and purchasing goods, as well as in the extremely wide selection available. In short, the innovations are in the site of consumption: a new kind of marketplace. In the participatory wave, the key innovations are in involving and empowering consumers in the processes of consumption: a new role for the individual, a new consumer.

Virtual consumption started out on some of the same marketplaces as online shopping, particularly eBay. Virtual consumption also involves aspects of participatory consumption, from consumption in communities to user-generated content, but in many ways follows a very traditional producer-consumer value chain, with operators having considerable power. What, then, is the new feature or ability that attracts consumers to the virtual mode of consumption?

The key innovations in virtual consumption can be traced to the nature of the goods. Consumers are attracted to virtual consumption because the benefits offered by these new types of digital goods differ from the benefits of earlier digital goods, namely digital information goods. To support this claim, I will next analyse how virtual goods differ from digital information goods.

In section 3.2.3, two key differences were identified between virtual goods and traditional digital information goods. Firstly, virtual goods are rivalrous, while digital information is abundant. Secondly, the primary way of deriving value from information goods is through experiencing them (for example, listening to a song), while for virtual goods, the main source of value seems to be elsewhere. Based on the results of the empirical part of this study, we are now in the position to elaborate on these distinctions.

If the main benefit derived from information goods is experience (including knowledge), for virtual goods the benefits consists not only of experience but also instrumental benefits and social benefits. The instrumental benefits are due to the way virtual goods are programmed to function as components of their surrounding architecture, bestowing power and ability within that environment on any person controlling them. The social benefits are due to virtual goods’ ability to act as vessels of symbolic meaning. But digital information goods come laden with meanings and symbolisms also. Listening to a certain musical artist, watching certain types of movies or reading news from a certain brand of website conveys many things about the consumer. Are virtual goods any different in this respect?

The most obvious difference is the one reflected in the concepts of rarity and artificial scarcity. Information goods are able to convey momentary distinctions of taste in never-ending cycles of fashion, differentiation, imitation and opposition, but since the goods are abundant and available to anyone, these distinctions are rarely lasting. In contrast, artificially scarce virtual goods are by definition not available to everyone, and are therefore able to create lasting distinctions between positions. In industry discussions, this social value of exclusivity is frequently highlighted as the main source of value for virtual goods, besides the aforementioned instrumental value.

In practice, however, not all virtual goods are very scarce at all: some exist in great numbers, and some are distributed freely to every participant as part of a promotion or celebration. Digital information goods can sometimes be very scarce in the sense of being difficult to find or costly to obtain, and being in possession of information that others do not yet have can have significant implications for social status. The distinction between “artificially scarce” virtual goods and “abundant” information goods therefore does not seem as clear and unambiguous as was first thought. Is there some other way of distinguishing between these two categories?

My conclusion is that the key difference between virtual goods and digital information goods is revealed in the discussion in section 3.4, above, on the concepts of provenance and social life of goods. For digital information goods, every copy is a manifestation of the same, abstract, singular information good. Symbolic meanings such as being fashionable, avant-garde, old-fashioned or vulgar can be attached to the information good, but the meanings are attached to its abstract idea, not to any specific manifestation. One copy of a file containing a Hollywood movie is semiotically no different from another copy containing the same information. They are both the same signifier, pointing to meanings attached to that movie.

In contrast, for virtual goods, every copy is distinct from other copies. Each copy is a different signifier, and can therefore point to different meanings. The notion of provenance and social life refer to the way in which individual virtual goods, through the course of their life, can pick up different kinds of personal associations, and even a social “reputation” of their own. Thus one virtual sofa can be quite meaningful to someone, while another visually identical sofa can seem empty and hollow. The result corresponds with Scott Lash and Celia Lury’s analysis of what happens when media become thingified as commodities: they become Leibniz’s monads, “all different from each other, because each carries its own trace” (Lash & Lury 2007, p. 12).

Table 2.           Goods in physical space and virtual space



Physical space

Virtual space


Material goods

Virtual goods


Images, media

Images, media


Miyamoto Shigeru of Nintendo has used the phrase “touchable images” to describe video games (Fukuda 2000, p. 6). Virtual goods are “touchable images”: not just images with meanings, but images that one can appropriate, make one’s own, and attach personal meaning to. Unlike the objects in Nintendo’s traditional video games, these images moreover exist not just on one screen, but in a virtual space where they can touch the lives of many people, and obtain a social life. In many ways, therefore, virtual goods are more similar to material goods than information goods: they are the matter of the virtual space, distinct from images or representations in the virtual space (Table 2). On this observation we can base the idea that the key innovation in virtual consumption is a new type of commodity, “virtual matter”.

To conclude this section, I will briefly consider what this perspective implies for our understanding of the consumer. The first-generation online shopper was decidedly materialist, driven by a desire to accumulate, although perhaps also to explore the new frontier. The second-generation participant-consumer, in contrast, is painted as a very different creature, being not so much interested in material distinctions but in creativity and the fruits of mental effort: a true post-materialist “non-sumer”. Virtual consumption, however, seems to represent yet again a return to materialism, this time through the accumulation of virtual matter. Why such big differences in ethos?

The “enabling technologies” perspective suggests that participant-consumers were perhaps never as revolutionarily post-materialist as their reputation leads us to believe. The idea of obediently obtaining and consuming each new good in the order and manner prescribed by marketing has obviously been questioned many times before in material culture by youth subcultures (e.g., Hebdige 1979). And the hacker ethic is by no means hierarchy-free. Individuals are still intensely assessed, valuated and ordered by those few measures that are visible through the mediating layer: intellect, creative output, the whole “virtual body” constituted by the words and images the individual puts out. Games of taste and cultural competence have not disappeared. From this perspective, it is not surprising that if matter is then re-introduced, people fall back into full-fledged “materialism”.

4.4             Ethical perspectives on virtual consumption

Having used empirical studies to conclude that virtual consumption is driven by the same kinds of social structures and offers the same kinds of benefits as material consumption, only in the context of virtual spaces and usually in different, more marginalised social worlds, we are now in the position to compare virtual consumption with more traditional modes of consumption in a normative fashion. As discussed in section 2.1.1 above, consumption has come to be seen as a crucial component in the functioning of the economy: only by consuming more can we grow the economy and increase global welfare. On the other hand, consumption is facing crises: it is blamed for an increasing disintegration of social life, and worse yet, an ecological crisis that threatens the future of the whole planet. In this section, I will speculate about what virtual consumption could entail in these three dimensions.

4.4.1       Economic prosperity

Do virtual goods have “real” economic value? Can businesses based on selling virtual goods contribute to the growth of national economies in the same way as their more material counterparts, leading to increased economic welfare in the society? Castronova notes that under the consumption-based notion of value used in economics, this is possible:


The mere fact that the goods and spaces are digital, and are part of something that has been given the label “game,” is irrelevant. Willingness to pay, to sacrifice time and effort, is the ultimate arbiter of significance when it comes to assessments of economic value. (Castronova 2002, p. 15)


Virtual goods represent real economic value insofar as there are people who are willing to spend time and money to obtain them. If more and more people become interested in obtaining virtual goods, the virtual goods business will contribute more and more value to the economy. The same applies to any goods, from furniture to cinema tickets. Virtual goods can perhaps be more ephemeral than some material goods, because they might, for example, disappear suddenly if the operator goes out of business. But in today’s economy, economic prosperity is not measured by the amount of durable goods hoarded in vaults, but by GDP: the total spending on final goods and services produced in a country (Burda & Wyplosz 1997, p. 21). Thus lack of durability can even be a virtue if it leads to repeated spending.

A problem in the consumption-based notion of value is that by equating value with consumption, it assumes that consumers can never go wrong: whatever consumers purchase, it is always good (Slater 1997, p. 49). The supposed economic contribution of a business is understood as its ability to fulfil consumers’ desires. But what if the business itself generates those desires? Is it still an economic contribution? According to Galbraith,


[i]f the individual’s wants are to be urgent, they must be original with himself. They cannot be urgent if they are contrived for him. Above all they must not be contrived by the process of production by which they are satisfied [...] One cannot define production as satisfying wants if that production creates the wants [...] (Galbraith 1969, pp. 146-147, quoted in Slater 1997, pp. 49-50)


But is satisfaction even the aim of real economic activity, or simply a theoretical construct? In January 2009, a group of Finnish companies launched an anti-recession campaign aimed at Finnish consumers.[9] The message of the campaign is that if Finnish consumers reduce their consumption in response to recession fears, this will only deepen the recession. Instead, it is suggested that consumers should keep on shopping as before, so that jobs may be saved and the economy continue on its course.

In other words, the message of the campaign is that consumption is not simply about the satisfaction of private indulgences: it is a duty we owe to the society. In economic theories it may be postulated that consumption leads to welfare, but for the functioning of the economy, it is completely irrelevant whether we really derive some sort of pleasure out of the goods we purchase or not. The axiom of strict monotonicity is an approximation of human decision making in theory, but a norm imposed upon the consumer in practice. The consumer must keep on buying more in order to maintain society. Yet what the consumer buys the rule is indifferent about. For economic prosperity, a set of furniture from Ikea is just as good as an equally priced set from Habbo; as is the old native North American custom of throwing food and crafted objects into the sea (Mauss 1990, pp. 15-16).

In summary, virtual consumption can contribute to economic prosperity, so in this respect it is not different from its more established alternatives. The business that virtual goods companies generate is no less real than other businesses. However, economic value is not a very useful ethical measure of value, because under the consumption-based notion of value, any activity at all is considered valuable if someone will pay money for it. In the following sections, I try to seek other standards for assessing the ethical value of virtual consumption.

4.4.2       Dematerialisation and social integrity

The notion of dematerialisation of consumption is prominent in contemporary sociological and cultural accounts of consumption, especially those tending towards the postmodern. Dematerialisation has an ambiguous ethical colour: it can be seen as both emancipatory and anti-social. As virtual consumption literally seems to be a very “dematerialised” form of consumption, it is worth examining what those accounts can say about virtual consumption, and at the same time, what virtual consumption can say about dematerialisation.

The concept of dematerialisation has several meanings. Slater (1997, pp. 193-195) identifies four distinct developments that dematerialisation can refer to. One, that non-material goods, such as services, account for an increasing share of consumption. Two, that even material goods appear to have an ever greater non-material component, such as design, aesthetics and experience. Three, that the goods constituted in this way are increasingly mediated: delivered to consumers as representations via advertising, films, magazines and so on. Four, that regardless of the materiality of the final product, the resources used in the production process are increasingly immaterial, such as knowledge, design and emotion.

On accounts one and four, virtual consumption can be said to represent similar “dematerialisation” of the economy as the movement from industrial to service economy. This movement has various interesting implications for the organisation of production and society, as discussed by, among others, Castells (2000) (under the concept of “informationalisation”). These changes are, however, not particularly unique to virtual goods. I will instead focus on accounts two and three, in which dematerialisation is seen as increasing mediation of commodities. What does mediation imply and are virtual goods mediated?

Mediation of commodities is a key ingredient in Jean Baudrillard’s post-structuralist account of consumer culture (1981, 1988), which can be framed as a theory of radical dematerialisation. According to to this view, in contemporary society commodities have dematerialised until only their sign value remains, and the “hyper-reality” constituted by endless commodity-signs pouring through media has become more substantial to the consumer than material and social reality. In contrast to the traditional social reality of values and hierarchies, this mediated reality is “fluid” in the sense that new signs are constantly created through, for example, advertising. It is also “flat” in the sense that it consists only of endless distinctions between signs, with no objective standpoint from which to order them. High culture, popular culture, art and trash are all flattened into differential positions on a level playing field through processes of commodification and mediation. Baudrillard’s visions are dystopic: hyper-reality occludes values and social bonds. In the form presented above, it is possible to see emancipatory potential in it as well, though: radical dematerialisation can flatten modernist structural distinctions such as social class and gender (Slater 1997, p. 196).

Despite the fact that virtual goods are completely mediated in the sense that they are experienced entirely through a computer screen, they are not necessarily mediated at all in the sense of Baudrillard and Slater. The latters’ notion of mediation refers to the process of attaching a non-material component (a sign value) to a commodity, by means of, for example, advertising. This mediated component is objective in the sense of being independent of any consumer, existing instead as a difference in the world of signs. In contrast, the mediation involved in virtual goods is a process that aims to deliver to the consumer an experience of being in touch with an actual, monadic object (section 4.3, above). Of course, advertising and other means can then be used to attach sign values to this “virtual commodity” as to any other commodity, but these two processes of mediation are not related. For this reason, the emergence of virtual consumption does not represent the consummation of Baudrillard’s dystopic visions of hyper-reality.

Virtual goods are thus “mediated” in the somewhat mundane sense of being digital objects transmitted by computer networks, and not necessarily in the more “postmodern” sense of being constituted almost entirely of sign-values. Ritzer (2001) offers an opinion on the ethical implications of dematerialised consumption in this more down-to-earth sense, equating dematerialised consumption essentially with advanced online shopping. His conclusions are similar to Baudrillard’s, however: dematerialisation means the death of the social.

According to Ritzer, dematerialised sites of online consumption are “dehumanized and dehumanizing worlds in which satisfaction from human action and interaction is all but impossible.” (Ritzer 2001: 150) Shop assistants and other human beings are totally eliminated from the process, and the consumer enters their own computer-generated “dreamworld” of consumption. As social controls are eliminated, consumers are increasingly vulnerable to the online shopping sites, which are moreover always available and therefore harder to escape from.

This analysis might have been somewhat accurate during the first wave of online consumption, but the participatory wave reintroduced human interaction into consumption and somewhat balanced the scales in favour of the consumer. And in virtual consumption, social relations are central for deriving value from the goods. The bits that constitute virtual goods have little experiential value without meanings attached to them within a social world. The prequisites of social control are therefore in principle present when virtual goods are consumed, but the question is what the nature of that social world is like: caring or indifferent. Caring computer-mediated communities and indifferent physical neighbourhoods illustrate that this is not a question of “real” versus “dematerialised” (Steinkuehler & Williams 2006).

In conclusion, virtual consumption is certainly dematerialised in the rather mundane sense of being mediated by computer networks, but dematerial does not necessarily mean de-social, only de-corporeal. In the final section, I will speculate on the implications of de-corporeal consumption in a world of limited natural resources.

4.4.3       Environmental sustainability

A major issue shadowing modern consumer culture is the impending environmental crisis it is said to be giving rise to. According to Intergovernmental Panel on Climate Change (IPCC 2007), global warming caused by greenhouse gases released into the atmosphere through the actions of man is a major threat to the earth’s ecology. The production, distribution and consumption of goods is a major tributary to these emissions. Intensive consumption and disposal is also associated with depletion of natural resources, pollution and degradation of natural environments, and other ecological ills.

According to Haanpää (2007), actions aimed towards reducing the environmental impact of consumption can be divided into two categories. The first is using increasingly sophisticated technologies to improve the efficiency and reduce the emissions of consumption-related processes. The second is effecting changes in actual consumption patterns and levels. Due to factors such as the “rebound effect”, technological improvements alone probably cannot reduce the environmental impact of consumption sufficiently (Haanpää 2007, p. 17). Changes in the quantity and quality of consumption are thus necessary if environmental catastrophe is to be avoided.

I concluded above that in terms of social benefit and function, virtual consumption serves many of the same kind of purposes as material consumption, and indeed is a substitute for material consumption in many social worlds that frequently gather online. When the primary function of goods is to serve as signs as symbols, is it not wasteful to use material goods as the vessels of those intangible values, if virtual ones are able to fulfil the same purpose? It was suggested that in the future virtual objects are increasingly present in everyday social situations. Assuming so, would it make environmental sense to promote virtual consumption as an alternative to the excesses of material consumption?

My literature review has not indicated any serious attempts to quantify the environmental impact of virtual consumption, or to compare it against other types of consumption. Some information regarding the CO2 emissions caused by general Internet use and ICT are available. Gartner has estimated that information and communication technology accounts for 2 percent of global CO2 emissions, approximately on the same level as aviation (Gartner 2007). The figure includes consumer, commercial and governmental use of ICTs, as well as a partial estimate of the energy expended in their production. Running a personal computer for an hour can generate between 40g and 80g of CO2 (Leake & Woods 2009), which is roughly equal to what Walkers Snacks indicates as the total carbon footprint of a small bag of crisps. At first glance it would therefore seem that the adoption of ICT and computer-mediated communications causes a significant additional burden on the environment.

However, it has been argued that ICT is not simply an additional burden, because the use of ICT and computer-mediated communications increases the resource efficiency of existing processes, and more importantly, in many cases replaces them entirely (The Climate Group 2008). It is argued that the increased adoption of ICTs therefore reduces environmental footprint instead of increasing it.

Be that as it may, it is possible to build an analogous and perhaps more compelling case for virtual consumption. Firstly, virtual consumption to a large extent uses the same personal computer and network infrastructure as established forms of Internet use, so it only partially represents an additional environmental burden. Secondly, the environmental impact of virtual consumption does not increase as a function of the number of goods purchased. This is a key difference to material consumption, where each additional unit purchased represents a direct increase in environmental footprint. In virtual consumption, each additional good represents at most an additional row in a database, with no direct increase in the consumption of materials (on energy, see below). Thirdly, the disposal of virtual goods does not leave behind waste that needs to be stored or recycled. Operators can create short-lived disposable virtual goods that keep databases lean without increasing the environmental burden in any way. Fourthly, in contrast to traditional goods and services, virtual goods do not involve physical transportation, either of the good to the consumer or of the consumer to the site of service delivery.

For the reasons outlined above, if a consumer was to substitute a certain amount of their weekly material consumption with virtual consumption, it could conceivably reduce their environmental footprint. The consumer would probably spend more time logged into computer systems, causing an increase in energy consumption. But as more goods are substituted, this increase in energy consumption should plateau at some point, at the point where the systems are never turned off. Beyond this point, the marginal rate of reduction in the environmental footprint would then increase with each additional unit of substitution. If spending is the sine qua non of contemporary society, either because as consumers we are incurable, or because our economic model requires it, then directing that spending to virtual goods instead of material goods could help to reconcile this social fact with the limitations of physical reality.



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[1] Translated from Finnish into English by the author from comments appearing at Grönholm & Haapanen (2008).

[2] An economist by training, Castronova is currently Associate Professor of Telecommunications at Indiana University Bloomington. His career as a “virtual economist” began in 2001, when he put out an online working paper titled Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier (Castronova 2001, later published as Castronova 2006a), followed by an another the following year (Castronova 2002). The papers attracted considerable attention from the mainstream media and contributed to the emergence of a loose, multi-disciplinary field of “virtual world studies” among North American academia. Castronova’s work has thus far not succeeded in making significant impact among economists, as only one of his virtual economy studies has been published in a peer-reviewed journal associated with economics (Castronova 2004). He subsequently authored two books, oriented towards virtual world studies rather than economics (Castronova 2005, 2007). His latest work represents a kind of comeback to economics, connecting with the experimental and behavioural movements within the field: his goal is to use multiplayer online games to study economic phenomena and decision making empirically (Castronova 2008).

[3] For a rebuttal of Castronova’s GDP calculations and some alternative ideas regarding the measuring of economic activity in virtual economies, see Lehtiniemi (2008).

[4] And in the increasingly prosperous Tokugawa Japan, the shogunate was forced to enact sumptuary laws governing the consumption of such minute items as “elaborate hats and kites, costly children’s toys, [and] certain brands of fireworks” (Hur 2008, p. 156).

[5] A particularly succint artist’s expression of this phenomenon is “John Gabriel’s Greater Internet Fuckwad Theory”, which posits that a “normal person + anonymity + audience = total fuckwad” (Holkins & Krahulik 2004).

[6] The rationale behind this proxy is that advertising is the main revenue model used by Web 2.0 and social media services, although advertising is of course widely used elsewhere as well, including online shopping sites and virtual consumption sites. The figures are thus only illustrative.

[7] Sources for the revenue figures:
a: Lehtiniemi & Lehdonvirta (2007) (estimates). b: Internet Marketing Council of Korea ( c: Analysys International ( (estimate). d: IAB & PwC ( e: Korean National Statistical Office ( f: eMarketer ( g: Forrester Research (

[8] Game as a metaphor for life is hardly original, as shown by Bourdieu (1998) and, for example, Malaby (2007). The aim here is to elaborate on that metaphor in a way that makes it practically usable for analyses of consumption.

[9] The campaign is titled “Don’t feed the recession” and organised by advertising agency Bob Helsinki. The campaign’s homepage is at

* All online materials were last accessed on June 1, 2009.


Besides having the ostensible purpose of assigning credit, the acknowledge-ments section is also a game where authors compete in thanking their supporters and apologising to their families in the most clever and eloquent words possible. When faced with a game such as this, an individual has two choices. One is to accept the rules and join the game. The other is to attempt to subvert the game by putting forward an alternative one.

In the computer art subculture known as the demoscene, the convention was to present acknowledgements as a simple list of names. Instead of witty prose, competence was demonstrated by the list’s visual appearance.



Terhi-Anna Wilska


Sang-Min Whang

Pasi Pyöriä





Mika Lehdonvirta

Tuukka Toivonen

Pekka Räsänen

Juho Hamari

Kai Huotari

Juha Tolvanen

Tatsuo Nakajima

Marko Turpeinen

Tuukka Lehtiniemi

Marjoriikka Ylisiurua

Herkko Lehdonvirta

Mikael Thuneberg

Pyry Lehdonvirta

Takahito Uezono

Herkko Hietanen

Eino Joas

Sulka Haro

Olli Pitkänen

Mikael Johnson

Emmi Kuusikko

Kai Kuikkaniemi

Otso Lehdonvirta

Jukka Kemppinen

Nanae Yamagishi

Jaana Lehdonvirta

Yoshiaki Hashimoto

Hiroshi Yamaguchi

Joshua Fairfield

Thomas Malaby

Horace Xiong

Riku Suomela

Dan Hunter

Esa Ojansivu

Miho Nojima

Julian Dibbell

Jun-Sok Huhh

Greg Lastowka

Andrew Schneider

Edward Castronova

Eyjólfur Guðmundsson

Savvas Papagiannidis

Johannes Borgman

Marylka Uusisaari

Hideyuki Tokuda

Pekka Nikander

Tetsuo Yamabe

Antti Ukkonen

Fahim Kawsar

Taiyoung Ryu

Zhangxi Lin

Kevin Li

Fu Qiang

Tatu Aalto

Aleksi Aalto

Frans Mäyrä

Janne Hyytiä

Yoshito Tobe

Jeremy Snyder

Heikki Mannila

Hiroaki Kimura

Kjartan Emilsson

Fernando Herrera

Tuomas Yrjänäinen