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

Virtual asset sales

Plus Eight Star: Asian Virtual Goods Market 5 billion USD

+8* – Plus Eight Star, a consultancy firm, has posted a well-reasoned guestimate of the size of the virtual goods market in China, Korea and Japan: 5 billion USD! Contrast this with our guestimate in 2007 that the global virtual goods market was worth 2.1 billion USD. Some other estimates and revenue figures can be found here.  Read more

Virtual Economy at GDC2009

Game Developers Conference 2009 took place at Moscone Center in San Francisco USA in March 23. One of important keywords from this year’s Game Developer Conference is digital distribution of video games. So, many sessions dealt with issues related to digital distribution like virtual economy models, new revenue models for casual games distributed via console networks including PSN, XBLA. In addition, virtual goods trades and how to make more money through various new distribution methods were focused by a number of sessions.   Read more

Guest article: Are secondary markets profitable for item sales based businesses?

The question whether secondary markets limit the profits of a monopolistic seller has generated a lot of controversy over the years. The “conventional wisdom” is that secondary markets eat manufacturer profits because used goods create competition for new goods by acting as close substitutes. Instead of buying a new good, consumers can choose to buy used goods instead; especially so if they offer better value in terms of price. However, it has also been shown that secondary markets have other implications as well and therefore the conditions under which secondary markets are detrimental to the profits of a monopolistic supplier are subject to debate. In this essay, I will review some of the previous microeconomical work on secondary markets and then seek to determine how their results apply the context of virtual asset markets. The key question would be “how do secondary markets affect primary market profits?”  Read more

Korean online game portals report record-breaking sales in 2008

At the beginning of February, South Korean news reports said, nevertheless the global recession, Korean online game portals announced that their yearly sales were highest ever in the South Korean game market in 2008. While all most all big game publishers in the global game industry including EA, Activision-Blizzard, THQ, SCE, MS are facing a huge amount of loss and planning large-scale layoffs, South Korean online game portals including Neowiz Games, CJ Internet, Hangame are celebrating their incredibly successful sales records.

Guest article: Game Commerce from virtual item sales to gold farming

The following Guest Article by Steven Davis is an extract from his recently published book, Protecting Games: A Security Handbook for Game Developers and Publishers. The extract is from Chapter 22: Game Commerce: Virtual Items, Real Money Transactions, Gold Farming, Escorting, and Power-Leveling

Money makes the (real and virtual) world go around. In some sense, money itself is the oldest, most widely used virtual item. Because money is so universally understood, virtual currencies are widely used as incentives in online games. Whatever one’s views are about “consumer culture,” we all seem to have a Pavlovian response to accumulating more things.   Read more

Why do people buy virtual goods?

Habbo record playerThat question has been a driving force in much of my PhD research, which is finally beginning to reach its conclusion. During this year, I will hopefully have four journal articles published or accepted for publication. I will blog about them here as they come out. Academic publishing can be slow, so some of the stuff that comes out now will have been written two years ago. Fortunately I think all of it is still relevant.

The first article I thought I would blog about is titled Virtual item sales as a revenue model: identifying attributes that drive purchase decisions. It’s due to appear in Electronic Commerce Research 9(1-2). A pre-print version (essentially the same content with a less pleasant layout) of the paper can be downloaded here.  Read more

Selling branded items in Gaia: Snoop’s Dobermans and Timberlake’s fedora

New York Times has an interesting story about Virtual Greats, a company that focuses on bringing licensed content to online environments:

For celebrities, licensing virtual products is a new way to make a buck and stay hip with a young crowd. Snoop Dogg’s manager, Constance Schwartz, said she did not have a clue about virtual worlds when Virtual Greats approached her this year, so she and her team spent a week exploring Gaia Online.  Read more

Reasonings for virtual currency implementations in business models of free-to-play worlds

Virtual currency issues have been on the table for a while now: Sulake introducing dual currency system to Habbo and Three Rings launching Whirled with three separate currencies. The purpose of this post is not to go into much detail, but to encourage discussion on this issue.

I just quickly wanted to point out what implications different currency implementation currency design choices may have on different sub-business models.   Read more

Virtual Goods News Launched

Virtual World News has now launched a sub-site on news concerning virtual goods, covering issues in a more targeted scope. This is a well reasoned developement as the amount of emerging information is quite huge. Virtual assets sales is also one of the primary topics here at VERN and forms a well grounded, independent perspective to virtual worlds.   Read more

Social games developer estimates size of U.S. virtual goods market at $200 million

Charles Hudson over at his blog posted an estimate of the virtual goods market size in the United States.

More links to such estimates can be found here at VERN forum. Feel free to add your links.