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Virtual Goods in US to hit $2.1 billion in 2011
The US economy is doing “so-so” these days manufacturing real goods, but we’re rocking on virtual items. According to a report released by Inside Network today, the virtual items business in the US will grow to $2.1 billion in 2011, up from an estimated $1.6 billion in 2010.
The US economy is doing “so-so” these days manufacturing real goods, but we’re rocking on virtual items. According to a report released by Inside Network today, the virtual items business in the US will grow to $2.1 billion in 2011, up from an estimated $1.6 billion in 2010.
What is the reason for this growth?
As you well know (and why we are reporting on it here), most of the growth in virtual items is fueled by the growth in social games, particularly on Facebook.
Though the numbers are huge, the news is not all good. Only 1 – 2 % of people playing social games are purchasing virtual items and some companies are better at making money on virtual goods than others. Take out World of Warcraft and FarmVille, and you get a bigger story.
The flipside is, if you can get more than 1 – 2% to purchase virtual items (let’s say 5%), the $2.1 billion amount will seem small in comparison. If paying for virtual items in social games is mass-market activity, this could happen. If it remains a niche market, however, going beyond 2% conversion will be very difficult.
Check out the article on CNN for more information.
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