People spend over $1.5 billion on virtual items every year. Pets, coins, avatars, and bling: these virtual objects are nothing more than a series of digital 1s and 0s stored on a remote database somewhere in the ether. What could possibly possess people to spend real, hard earned cash on ‘objects’ that have no tangible substance?The virtual worlds space has received tremendous press attention in the last year, fueled in no small part by Wild West stories of fortune and anarchy in worlds like Second Life and the plight of the Chinese gold farmer in World of Warcraft. But people aren’t paying attention to the bigger story. While people preoccupy themselves with mocking the absurdities of some of these virtual worlds, the reality is that there are many businesses out there making meaningful amounts of money in virtual goods: