Virtual goods represent one of the strongest ways that marketers and retailers can get involved with virtual worlds, and their popularity in social networks has increased with the opening up of the Facebook platform.
For example, fashion marketers and retailers have offered virtual versions of current in-store clothing, along with links to buy the items in real life, on sites such as Stardoll. Branded items are also available to decorate social network profile pages or to send to friends.
Piper Jaffray predicts that total US revenues from virtual goods will reach $621 million this year, a huge increase of 134% over revenues in 2008. Double-digit increases are projected to continue through 2013, according to the “Pay to Play” report, when US virtual goods revenues will reach nearly $2.5 billion.
“Last year, it was likely that the majority of virtual goods based revenue in the US came from virtual worlds,” according to the report’s authors. “However, this year we believe the trend is shifting to more virtual goods revenue coming from social networks.”
They note that this is due not to a dropoff in usage within virtual worlds, but to an increase in usage within social networks. According to research from Strategy Analytics, sales of virtual goods and other microtransactions made up 68% of worldwide virtual world Website revenues in 2008. Piper Jaffray expects such revenues to remain significant.
US sales of virtual goods make up only 28% of the worldwide total in 2009, according to Piper Jaffray. The research firm expects global revenues to exceed $2.2 billion this year, climbing to more than $6 billion by 2013.
“Nothing says engagement like a flock of avatars crowding a virtual store and showing off their haul in their virtual home,” said Debra Aho Williamson, eMarketer senior analyst.
However, keeping that engagement up does require some effort.
“First and foremost, no matter how good your virtual good is, it has to be optimized,” Nir Eyal, CEO of virtual goods platform AdNectar, told eMarketer. “You have to constantly maintain virtual goods, because they get old. Every three days or so, you need to bring in a new item for people to send around.”
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