Report tracks the rise of virtual goods in the U.S.

A comprehensive new report claims that U.S. consumers will spend more than $1 billion on virtual goods this year, rising to $1.6 billion in 2010, as the market grows thanks to social gaming.

by Helen Leggatt

That's just one finding of the recently released "Inside Virtual Goods" report by Inside Network and the Virtual Goods Summit. The report focuses mainly on virtual items being sold on social networks like Facebook, as well as through MMO games such as Eve Online.

What are virtual goods? They can take many digital forms such as designer sunglasses for an avatar, a magic potion in an MMO or a cutesy teddy-bear gift on Facebook.

"While virtual goods have been driving revenues in Asia and Europe for years, 2009 will be remembered as the year virtual goods-based businesses began to scale in the United States," said Justin Smith, founder of Inside Network and co-author of the report, adding, "I don't know anyone who expected it to grow this fast."

The rise in social gaming has brought virtual goods to the attention of a broader audience particularly on Facebook where, in just two and a half years, the platform went from zero to hundreds of millions of dollars.

Mobile doesn't play a major part in the report, but the iPhone is highlighted as an emerging virtual goods sales platform.

Tags: micropayments, research, social gaming, social marketing, trends, virtual goods