If the idea of spending money on something you will never use, see, nor touch seems ridiculous to you, then how do you explain the one billion dollars of virtual goods that have been bought this year? (And that’s only the American estimate — it’s more like five billion dollars in Asia).
Virtual goods are generally small purchases that fall into two categories: 1) they help you in a game that you’re playing (i.e., a special weapon) and 2) identifiable objects such as clothes for your avatar. Virtual goods started off as niche purchases in virtual worlds such as Second Life or World of Warcraft, both of which had their own internal economies.
Facebook Credits help you make in-game purchases or virtual goods
Unsurprisingly, Facebook is also jumping in on this with Facebook Credits, sort of like a common currency that can be used across all Facebook applications. But the price is steep — it’s taking a 30% cut of all transactions. In the next year or two, the we can only expect the market and demand for virtual goods to increase quickly.
Virtual goods are also coming to the iPad. The on-board OS (a modified version of the iPhone OS) supports microtransactions (i.e., high volume, low-value transactions that typify the virtual goods business model). Game developers are making use of this feature, most notably Tapulous’s Radiation and Aurora Feint’s Aurora Feint 3. Both games are free to download and play, but will earn revenue by selling virtual goods such as access to premium songs in Radiation.
According to Social Gaming Network (SGN)‘s Jeff Weiser, the iPad will play an important role as social gaming grows. The larger screen and higher processing speed of the iPad places it in a position to compete with other game consoles such as Sony’s PSP. Additionally, these iPad features could also open up the market for traditional board games and SNG’s F.A.S.T, a popular, graphics-intensive flight simulator game.
