How much is that virtual cow for? No one quite knows


Zong’s chief executive David Marcus said a significant hurdle stands in the way of successfully monetizing through virtual goods in these developing countries. Most gaming companies are still charging the same prices for virtual goods across the world even though local living incomes are quite different. A $1 virtual cow might be nothing to an American consumer, but it is significant in countries like India, where the GDP per capita is $1,017. One potential solution to that problem is differential pricing, but that could introduce a new problem, fraud: users could route their connections through IP addresses in emerging markets where virtual goods are cheaper.

If there is anything that will stand in the way of iTunes, Amazon, Zynga, Netflix and others from becoming mainstream companies in India, this is it.

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