The phenomena real money gets translated to virtual money for use in a virtual world, just like Chuck E. Cheese charges for tokens.
Businesses even make money from trading in game money for real money.
http://mymmoshop.com/ - Specializes in the farming and selling of in-game money from massively-multiplayer online games like World of Warcraft, Final Fantasy XI, and Everquest II, has by purchased by My MMO Inc. to the tune of $10 million.
Money making from the games themselves.
Zynga Pushing Nine Figures In Revenues Thanks To Micro-Transactions
Generating Revenue from Virtual Goods
Video is from the Virtual Goods Summit.

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