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Online Gaming and Social Networking Push Virtual Goods Revenue over $7B

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November 17, 2010

Online Gaming and Social Networking Push Virtual Goods Revenue over $7B

By Calvin Azuri, TMCnet Contributor

Online gaming has gained enormous market exposure in the recent years because of the development and pervasiveness of social networking sites, such as Facebook (News - Alert), and the increasing prevalence of smartphones, such as the iPhone. Due to the rise of the virtual goods revenue model, which allows people to play for free and later pay for individual items within the game or world, has been one of the main reasons for the explosive revenue growth of this market. In-Stat projects that before this year end, over $7 billion will have been spent on virtual goods.

In a press release, Vahid Dejwakh, industry analyst, said, "Traditionally, computer games have been the realm of teenage boys. However, social networking and pervasive smartphones are driving gaming beyond this core base. Before, the gamer had to go and specifically find games he or she wanted to play, but now games are delivered via your social networking profile and your phone."

Some of the additional research findings confirm that the top 10 virtual goods companies earn 73 percent of current worldwide revenues, the emergence of social and casual games on social networking sites and mobile phones has created a 2D virtual goods market that exceeds $2 billion, the Americas and EMEA regions now have grown to account for well over a quarter of all virtual goods sales yet Asia/Pacific still dominates the global market.

In-Stat (News - Alert) forecasts total virtual goods revenues will more than double by 2014 and also reports that several legal and tax issues could impact the virtual goods market, creating both risk and opportunity.

The recent In-Stat research into the Virtual Goods in Social Networking and Online Gaming market include a look at the entire virtual goods industry by category, region, registered accounts, monthly users, company total revenues, and company virtual goods revenues, an overview of the key players including micropayment facilitators, social networking, casual and social gaming, app developers, virtual worlds, MMOs, 2D Worlds, and 3D Worlds and virtual goods revenue regional forecasts by category and year up to 2014.

It also gives profiles and estimated revenues and users of about 40 of the top companies such as  Disney (News - Alert), Electronic Arts, Facebook, Gameforge, Giant Interactive, Google, Aeria Games, Bigpoint, Changyou, CrowdStar, DeNA, Digital Chocolate, GREE, i-Jet Media, IMVU, Linden Lab, Lolapps, Microsoft (News - Alert), NCSoft, Neopets, Nexon, NHN Corp, Perfect World, Playdom, Playfish, RockYou, PopCap, Shanda Interactive, SK Telecom, Slide, Sony, Sulake, Stardoll, Tencent, WeeWorld, Zynga (News - Alert).

Calvin Azuri is a contributing editor for TMCnet. To read more of Calvin’s articles, please visit his columnist page.

Edited by Jaclyn Allard

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