Revenue: Social media games and virtual goods 2010

Virtual goods in the USA will reach $1.6 billion revenue in 2010 I have a patent in social network economies particularly in user generated virtual goods – which we don’t see a lot of yet. So I tend to keep an eye on how virtual goods are coming along. That’s the problem with patents, you…

Virtual goods in the USA will reach $1.6 billion revenue in 2010

I have a patent in social network economies particularly in user generated virtual goods – which we don’t see a lot of yet. So I tend to keep an eye on how virtual goods are coming along. That’s the problem with patents, you have to get your timing right to develop and launch. When I took out the patent – pre Facebook, pre Twitter – it was impossible to explain to investors how pixel products were going to jump from closed game worlds (Everquest) into the real world. Now it’s easier….

From GamesBeat/VentureBeat:

Virtual goods are expected to hit $1.6 billion in revenue in the U.S. in 2010, according to a report from Inside Network.

The most interesting part of that number is that social gaming startups — which didn’t exist three years ago — will account for about $835 million of that total, said Justin Smith, founder of Inside Network and co-author with Charles Hudson of the Inside Virtual Goods report.

Virtual goods are digital items that don’t exist in the real world. They’re often used to monetize free games available on social networks such as Facebook. In Zynga’s FarmVille game on Facebook, for instance, you can buy a hot rod tractor that can help you grow your crops faster. While FarmVille is free, you pay for the tractor using real money via credit cards or other payment systems.

Other figures from the article:

  • Virtual goods might hit $1.6 billion this year, but South Korea has had cyber goods for a decade (around $4 billion)
  • 2009 may have seen revenues (USA) of $1billion

In fact Cyworld (South Korea) has huge number of members – like 86% of the Korean population – and zero adveritising. Yet more revenue than MySpace – all from virtual goods. Actually, MySpace may have caught up now.

You may have seen my presentations on monetizing social media and revenue streams in social networks – these are the updated figures. You might also like the 2009 venture capital virtual goods post.

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15 Comments

  1. Pingback: Jamie Southall
  2. I would like to see some numbers that describe the average spend on Social Media Gaming, and I would like that to take into account ‘active’ users. So that if we know that only 20% of signups to games like Farmville continue using it, how much of their hard earned cash do they actually spend on these games?????

    1. Hi Rob
      Cyworld is around $7 per user per year – it’s a J curve with majority spending nothing and a small number spending a lot bringing in around $300,000 a day. Cyworld Spend. Habbo is quite high 10% spend around $17 per month (equals $200 million per year). The Farmville numbers ($5-10 per purchase etc) some Zynga figures. Hope this helps?

      1. I forgot to say, Facebook only allows apps to show “active users”. I have a post on what a daily active user and monthly active user is. It’s not “join once then forget” users. Monthly active users So Farmville has 23 million active users I think?

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