Social games driving virtual goods market

The virtual goods market is set to soar and virtual currency and payments solution provider Social Gold has published a report that shows over half of virtual goods customers make repeat purchases.

by Helen Leggatt

Social games are generally free to play and are making their money from the sale of virtual goods. Some players purchase virtual goods that individualize their online gaming personas, others use cash to buy items or powers that bolster their game-play or to buy their fellow gamers virtual gifts.

Essentially, the 20% of players that buy virtual goods enable game developers to let the other 80% play for free.

According to data recently released by Social Gold, over half (56%) of those who made payments for virtual goods via their platform went on to make a second purchase. Around a quarter went on to make more than 2 purchases. These percentages demonstrate the increasing engagement levels in social gaming and how consumers obviously find the purchase of virtual goods worthwhile, compelling even.

It's no wonder, then, that the virtual goods market is set to soar.

Recent figures from Inside Networks' "Inside Virtual Goods" research series show that while 2009 saw $1 billion spent on virtual goods that figure is expected to rise to $1.6 billion this year. "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," says the report.

It was recently announced that PayPal will become a payment option for Facebook's virtual currency, Facebook Credits, which is currently being tested in a small number of games and applications.