Castonova

In Chap 5 of Castonova's text talks about the supply side of Market for synthetic worlds. the text begins by explaining the whole marketing of Games and how such methods as beta versions are released to create a community of insiders. These free downloadable versions are available to get the game itself known through word of mouth and also known within these communities of insiders. Castonova suggest that if this method being used by video games is not the correct way to go about the marketing of these synthetic worlds then "it is not clear what would be better."

The text explains pricing models, which deals with the two part pricing system. Castonova points out that in the game second life, the owners themselves are landholders. they allow the users to create and build everything in the world and charge them fees for the proportion created on land.Advertising and Price discrimination play major roles with this system. The text states that to much advertising could potentially make the virtual world unfun because it defeats the purpose of the virtual world. The text points out that Price discrimination is simply put into place for people who are more choosy, very similar to coupons which often appeal to people who are sensitive about prices. These methods can ultimately be used to hook users into the game itself, and then once the newer version is released the users are forced to upgrade or buy the newer version.

Castonova then goes into detail about why sythentic worlds fit into the economy and which of their competitors could potentially be in trouble.The texts mentions such competitors as travel and tourism, communication etc. The text compares synthetic worlds to clubs. Castonova says "no club is fun when your the only member." An athletic club which contains a swimming pool is also used as an example to show how membership can rise and be effected by proper pricing options.

Do you agree with the Castonova that the production processes being used by Video Games would be the right way for managing Synthetic world?