Marketers Are On Board with Virtual Goods

From eMarketer.

The popularity of social gaming has catalyzed tremendous growth in virtual goods monetization. Game developers, virtual worlds and social network providers are driving this economy, which is projected to grow substantially in the next several years.

“Most of the growth in virtual goods revenue has come from the surging popularity of Facebook games,” said Paul Verna, eMarketer senior analyst and author of the new report, “Virtual Goods and Currency: Real Dollars Add Up.” “More than half of Facebook’s users have played a social game, and their virtual goods expenditures drive an economy worth hundreds of millions of dollars in the US alone.”

US revenues from virtual goods in social games will grow by 21.3% to $792 million in 2012, from $653 million in 2011. This growth follows a 28% increase in 2011 over the previous year. eMarketer’s estimates are based on PC-based social games and do not include console or mobile games.

Virtual worlds, social networks, massively multiplayer online games (MMOGs) and social games have thrived within a connected-PC environment. However, mobile is gaining ground as consumers use smartphones and tablets for social and casual gaming.

A mobile gaming study by analytics firm Flurry estimated that, in February 2010, average revenue per user (ARPU) for virtual goods surpassed advertising ARPU. Further, virtual goods ARPU continued on an upward trajectory through September 2010, quadrupling that of advertising dollars that month.

“Gamers have a robust appetite for virtual goods, especially for branded items,” said Verna. “Savvy marketers have grasped this phenomenon and inserted their brands into a variety of games in creative ways. The potential for continued branded virtual goods integration is limited only by the imagination of marketers and game makers.”

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