The reason that people buy virtual goods is the same reason people buy most things. Cynics often comment that you are "buying air", as though the only thing people spend money on is rent, food, and the other basics.<p>Whenever you get a community of people together, economics is something that naturally arises.<p>I have run a successful virtual goods business in Second Life for over 2 years. The main products I have been selling center around video/machinima production, audience and performance interactions, and avatar animation improvements.<p>Just because the platform that my products are built on is a 3D MMO-ish environment doesn't mean they have no value. I often make the analogy that my creations are simply software programs that I sell, because that's what they are. Hundreds of millions of people worldwide have purchased software for decades. Our entire modern economy and culture is in large part based on software and the industries that operate in around around it.<p>When you look at communities in "virtual" spaces, whether they be full 3D environments or sites like Facebook, people find value in software that runs in those platforms. The value that they find varies greatly from person to person. Some find an application that helps them manage their friends list useful, while others have no problems spending a few cents or a dollar to send an image of a funny puppy to someone they care about.<p>Another kind of virtual good is music. I used to occasionally torrent music if it was something I wanted. I was also broke then. However, it gradually happened that I have transitioned to buying almost everything I want online. For me, and I think for others, it is so much easier to find and buy a song on iTunes than it is to stab wildly in the dark on torrent sites to find exactly what I want. The same has held true for tv shows and movies. When I was broke, I torrented. The quality was hit or miss. But since I bought an AppleTV in 2008, I just buy the stuff I want to see. Its always high quality, and its instantly there.<p>Virtual goods are really no different than anything else people spend money on. For women, maybe its fashion. For guys, gadgets or cars. None of it is stuff we need to keep our carbon-selves running, but they're stuff we want. And if we have money, we will pay for it if its easy.<p>There's a very good economic lesson that is often missed by people. If you make it extremely easy for people to spend money, they will spend money. No complicated signup forms, no thinking required, and make it as inexpensive as possible. The more barriers you put between the customer's money and your pocket, that's all the less money you will be getting from them.<p>Making money is easy. Making something people want can be a bit harder. So concentrate on building something useful and easy to use, and make it easy to buy.