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Virtual goods make for real cash

Written on: Oct 14, 2009
Author: Gavin Dunaway |
: Share; Virtual goods make for real cash

ADOTAS – This year instead of giving your loved one a physical gift or actual flowers (natural or plastic), why don’t you do it the post-modern way and buy it virtual?

You’d be part of an industry that has doubled since 2008 and will hit $1 billion this year according to a new report by InsideFacebook.com editor Justin Smith and Charles Hudson of Serious Business. The virtual goods market is expected to grow to $1.6 billion in 2010.

Virtual goods come in many forms, including enhancements for avatars in web games like World of Warcraft or virtual worlds like SecondLife. See a suit of armor you need to protect from trolls or a pair of pumps your digital surrogate just has to have and you can ring it up on the PayPal register. Comparing it to the ad network explosion, Smith noted that 15 companies that offer such “goods” have sprouted up in the last two years.

Another bustling segment is social media sites — $1 gets a Facebook member 10 credits that can buy just about virtually anything from the gift store. Facebook too is outsourcing, allowing third-party developers to sell their wares for credits. Virtual goods account for 10% of Facebook’s $500 million in revenue, according to the report.

The latest twist is that companies like AdNectar are offering branded virtual goods from clients such as Godiva and Gillette. This gets interesting because we don’t know about you, but we’d rather dig into a real box of Godiva truffles than stare mouth-wateringly at virtual ones on our monitor. Will this make us more likely to stop at the Godiva store down the street? We’re sure Godiva hopes so.

Reader Comments.

Hi,
Youmnetioned in your write up that 15 compnaies offer such goods . Can I have a list ?

How we can work together?

Posted by Sandip Mukherji | 4:45 am on October 15, 2009.

yes, can you send a list of these companies please? thanks.

Posted by lilly | 6:35 pm on October 28, 2009.

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