There is a new burgeoning economy that I call it Economy 2.0. This new economy is a growing, it is global, and, according to a recent story in the New York Times, sweat shops in China have already been setup to start profiting from it. The interesting thing about “Economy 2.0″ is that you have probably never heard about it, never stepped foot in it, and it is 100% virtual.

Although some of the transactions in Economy 2.0 happen on eBay, I am not talking about the people buying and selling real goods and services, these transactions don’t actually take place in the World you live in. Massive multi-player online games (MMOs or MMOGs), like Everquest, World of War Craft, Ultima Online and Second Life each have their own virtual worlds, and these virtual worlds are creating virtual economies. By some estimates, the traffic in virtual goods is worth as much as $880 million in real cash every year.

Stick with me here, this gets really interesting.

Each of these virtual worlds have their own currency and these currencies can be bought and sold with real dollars, yen, euros or pounds. In fact, some sites are being setup now to actually track the valuations of these currencies. Want to know the value of 1 Million WOW Gold pieces, or linden dollars compared to US dollars? GameUSD.com will tell you!

Not only can you take out your credit card and buy currency for the games, you can also buy anything from high level characters and game items like clothing, swords, and shields. Some games like Second Life, are totally setup to be a virtual economy allowing you to buy virtual land, develop it, and resell it. Anshe Chung, dubbed “The Virtual Rockefeller”, currently makes over $150,000 US buying virtual acres, developing these plots, and reselling them.

Most of the transactions are between players and happen in exchanges like eBay. Other sites have been setup to specifically for this function, ige.com, Game9th.com, etc…. In a typical transaction, one player sells and item to another and they arrange to meet up somewhere specific in the game and make the agreed upon trade. Sony has setup Station Exchange, it’s own trading site for their Games, and saw $180,000 in transactions in the first 30 days.

Are your kids playing these games? Join them! You might just find a new virtual business between ogre battles!

It’s a brave new world. Crank up those avatars and welcome to the next global economy, Economy 2.0!

First off, “gaming the system” isn’t necessarily a bad thing from my point of view … it’s a testing of the edges of a system with any number of motivations.

I think the individual motivations of game players are as varied as there are people, as is the individual recognition of what systems are gameable or not. That’s part of that emergent magic when alot of people are playing all at once.

I’m sure there are many people who just publish webpages without thinking about search engine positioning. There is a large population gaming that system (enough for whole companies and book titles and websites to flourish in that niche) and an even smaller population working “aggressive gaming” tactice like keyword spamming or arbitrage. The challenge for Google is that their system has to survive such a diverse population of “gamers,” which means someone is going to try anything you imagine — some of which will surprise us in a positive way, and some of which will surprise us in a negative way.

So my subversive gut tells me that everyone is wired to be able to game any system and even if not everyone is acting on that potential, when the “collective” starts to form they become a part of that gaming. By this point, though, I’m using gaming in the big “game theory” sense of it (where most of the rules are not overtly expressed, and where social pressures encourage people to deny any game-like instincts.)

All we wired to play games or to game the system? I could almost see this both ways, but I also get this sense of a certain population segment more predisposed. All large scale systems have to allow for gaming (like the rewards business, for sure), but if everyone tried to game them, the economics would change really fast.

This feels like old times