VIRTUAL GOODS
Farmville
Earlier this week my colleague Sam Granleese posted an entry on this blog debating the notion of user pay content? I thought therefore it might be a nice follow up to have a little look at another emerging market; that of Virtual goods.
Now, virtual goods are certainly not a new idea. We would all hopefully be able to recall from our ever diminishing short term memories the story of Anshe Chung, the first Second Life Millionaire who was successful in selling virtual land and property in a virtual world. Of course there are also WOW (world of warcraft) and other such fantasy gaming communities / worlds where there are existing markets for goods, powers and secrets. There are even companies dedicated to the dubious and sometimes illegal accumulation of said powers and weaponry which they then on-sell to eager gamers for ‘real’ dollars. But let’s be honest these are still relatively niche markets and unless you are a participant in these games you are unlikely to have seen and certainly not paid over your hard earned dollars for a virtual item. Yet that is.
Enter facebook and gaming applications are suddenly readily accessible to over 250Million users world wide. Currently the most visible and successful one is farmville
“FarmVille is a real-time farm simulation game developed by Zynga, available as an application on the social networking website Facebook. The game allows members of Facebook to manage a virtual farm by planting, growing and harvesting virtual crops, trees, and livestock.[2] Since its launch in June 2009,[3] FarmVille has become the most popular game application on Facebook ….”
I checked, and the Farmville application is currently being actively used by 69Million users. Much like the a fore mentioned virtual goods sellers Virtual Goods are at the heart of the Farmville experience with users earning or paying for virtual currency ‘coins’ and trading with one another to buy land, seeds, equipment livestock or even a duck. Interestingly advertisers are also allowed to provide offers or actions to users of this application asking them to conduct brand interactions; Watch a commercial, sign up for our newsletter or apply for credit in exchange for ‘coins’ provided by that advertiser.
Now Farmville is a very popular game and I assume is highly addictive, as are other such games like Mafia Wars where users can also pay for virtual items to help them achieve missions. Here is the draw dropping bit though; Virtual goods sales are estimated to hit $1 billion USD in 2009. (for reference the entire AU online ad spend for an established market is estimated at $1.7 billion for 2009)
So back to the question at hand. Are people likely to purchase virtual goods? They most certainly already are, and I think we can expect a lot more frivolous micro spending where that came from.
If anyone wants me i’ll be out on the farm with my virtual tractor working toward a holiday in 2020.
