News, research and discussion on virtual goods, currencies and economies globally.

Virtual asset sales

Cultural exchange: Western devs enter Japanese social gaming market - Japanese enter Facebook


The Japanese social gaming scene is dominated by three platforms: Mixi, Mobage-town and Gree. The great majority of people access these social networks via a mobile phone instead of a computer browser. It's a big market: according to David 'dc' Collier of Japanese social game developer Pikkle, it's just as big as the U.S. market: half the population, but twice the ARPU (David gave an excellent introduction to Japanese social games at GDC this year, covering everything from business models to game design). No wonder major social game developer PopCap's APAC bizdev Giordano Contestabile recently said on Twitter that he was "doubling down on social games in Japan. As are most other companies. Next 6 months will be a pitched battle. Expect fireworks"!   Read more

AVEA virtual economy research project final report released

A seminar on virtual economy research is starting in a few minutes here in Helsinki. The seminar marks the conclusion of a 2.5-year virtual economy themed research project at the Helsinki Institute for Information Technology. The purpose of this post is to disseminate the 119-page final report of the project. Here you go! (edit: summary version added) Excerpt from the report below.  Read more

13 Percent


Also posted at Terra Nova

According to Playspan, and reported by various outlets this week, 13% of internet users bought virtual goods last year, spending a little over $90 on average.  (If this is accurate, it matches the percentage of voters who claim membership in the Tea Party, the percentage of CEOs who drove hybrids in 2007, and the percentage of teenagers who eat the recommended amount of fruits and vegetables.)  Estimated global revenues from sales = over $10B.

In related news, 44M game passwords were reportedly stolen, presumably with the hopes of supplying a bit of that 13 percent, multi-billion dollar market.

Game Design as Marketing: The Business/Game Developer's Dilemma

A brief presentation I gave at Games-As-Services Seminar on March 2nd about the dilemma developers face when balancing between monetization and retention on game design level.

Three Phases of Gold Farming: Scientific American Article

The January 2010 issue of Scientific American carries an article (by me!) that divides the development of gold farming into three phases (pre-history; golden age; and "backlash and beyond"), and examines the phenomenon particularly from a developing country perspective.

The article has been available online at: http://www.scientificamerican.com/article.cfm?id=real-money-from-virtual-worlds, though may get closed off behind a subscription firewall.  Read more

The price of eggs in World of Warcraft

In discussing the ease associated with having someone else do the work of gaming, more often than not large-scale services working to create offline profits like gold farming and power leveling operations are discussed. However, on a smaller scale the in-game economic systems of games like World of Warcraft can also provide players a way to avoid working for the things that they want, while simultaneously allowing other players the opportunity to profit from their in-world efforts.  Read more

Upcoming changes to XStreetSL


This came out awhile ago, but Linden Labs has announced changes to the way it operates its online XStreetSL marketplace, a significant player in its virtual economy and source of a wide variety of virtual goods for use in Second Life.

The major change seems to be to the way in which XStreetSL will handle free items, or “freebies”. Despite being given to other residents for free, these items will now have a monthly listing fee of L$99, or about $0.40 USD each. At the same time, other costlier items will be subject to new rates for listing and commissions on the site.  Read more

Deflation of Virtual Currencies, 2004-2009

I've published online a spreadsheet of data on the US dollar values of virtual currencies from eight different games, tracked over time from 2004 to 2009. And a Google Motion Chart also for those who like to look at pretty pictures (though this tends to draw attention to the two outliers more than the main deflationary trend).

To be found at:
http://spreadsheets.google.com/pub?key=ttEFy433f0C9bJSczaqGw0A&single=true&gid=0&output=html

Richard Heeks  Read more

The Genesis of the Virtual Goods Model

Guest post by Matt Mihaly on how the virtual goods sales model was born.

Matt Mihaly is a CEO and Creative Director of Sparkplay Media and Chairman (formerly founder, CEO, and Creative Director at Iron Realms Entertainment.   Read more

The virtual goods/microtransactions model dominates Asia and is now far and away the most popular business model for online games in the West with the meteoric rise in popularity of games on Facebook and MySpace. Twelve years ago, in ’97, I pioneered this model at the company I had founded two years earlier – Iron Realms Entertainment – out of pure necessity. This is the brief history of how the virtual goods model, and soon thereafter the dual currency model, came to be.

Virtual consumption: the thesis

Lehdonvirta (2009): Virtual ConsumptionMy PhD thesis on people who spend real money on virtual goods is now published. Thanks to everyone for your support! Here's the publication info:

Vili Lehdonvirta (2009). Virtual Consumption. Publications of the Turku School of Economics, A-11:2009, Turku. ISBN: 978-952-249-019-3 (printed) 978-952-249-020-9 (electronic) ISSN: 0357-4652 (printed) 1459-4870 (electronic)

You can download the electronic version of the thesis from the university library here. The print version can be purchased from the university's publisher: KY Dealing, tel. +358 2 481 4422, email ky-dealing(at)tse.fi. I also have some free copies to send to people, so drop me an email while they still last!  Read more