Tricks of the Trade: The Rise of the Virtual Marketplace
Posted by Jakstone | Filed under Tricks of the Trade
In the past fifteen years selling your unwanted goods has gone beyond a simple yard sale and directly to the web. With the advent of sites like Craig’s List and Ebay buy and selling has become quick, easy and cheap. But recently a new trend of selling and buying has started with the monetization of virtual goods.
In the past virtual goods been over looked by many entrepreneur and big business but has recently started to turn heads and many company’s have started to scramble to jump on this growing marketing. According to a report by Inside Network, its estimated that the virtual goods market will hit $1.6 billion in revenue the U.S. in 2010. This is only a quarter of the estimated $4 billion in revenue that will be generated this year in South Korea where the virtual good market started over a decade ago.
Facebook, Myspace, and others are driving this new market. Their massive user base have allow companies like Zynga, the creator of popular games like FarmVille and Mafia Wars, to capture audiences with there virtual offerings and has create a viable business model from which to profit from. Max Lechin, CEO of Slide and co-founder of PayPal, in a recent interview told TechCrunch they now almost make all there money from virtual goods.
Even if you haven’t heard of Zynga or Slide, other big companies have started to ramp up production there virtual offerings in hopes of new revenue streams. Companies like Sony, Activision Blizzard, and even Microsoft have all started to expand or experiment with offerings in the virtual market by taping into there existing services and adding “premium content”.
You maybe thinking to yourself “I’ve never bought a pet for a game!”, but at one point or another you have bought some type of virtual good.
Virtual goods are not limited to just items for games for FarmVille or WoW, but can be found in places like Apples own App Store with there new in app purchase system. Apple is another example of seeing the potential growth of the virtual goods market and expanded their payment platform to include functionality to allow purchases of premium content and services. Now that Apple has announced the iPad and there intent to keep with the iPhones App Store model virtual goods can be seen as the foundation of their new business strategy. Services like Xbox Live, Playstaion Store, Apple App Store and more will help ignite a virtual goods boom the the coming years.
But virtual goods have not always been at the for front of a companies business model. In the beginning they where uses to entice customers to buy a certain product and acted as a bonus. Blizzard has been known to give vanity pets for there World of Warcraft game as a bonus to people who purchased a collector edition, usually tagged with a premium price. But in late 2009 Blizzard announced they would open up there online Blizzard store to accommodate 2 new vanity pets that could only obtained buy purchasing them at $10 each. Also a recent Blue Post stated Blizzard it intent to bring their in-game auction house online on World of Warcraft Armory portal and would be considered a premium service with a separate service charge.
So how do these new “goods” and services affect our real lives? At what point does the meta become an integrated part of life and is important enough to us to track, pay, and consume on a daily basis? What drives us to decided to pay for new cloths for our avatar, or to be granted access to these new tier of “premium content”?
For whatever the reasons maybe it is seemingly becoming clear that the line between our real lives and our life in the meta is starting to blur and become one.
Tags: Facebook, FarmVille, Meta, Virtual Goods
