Virtual Goods Start Bringing Real Paydays
Silicon Valley may have discovered the perfect business: charging real money for products that do not exist reports, The New York Times.
These so-called virtual goods, like a $1 illustration of a Champagne bottle on Facebook or the $2.50 Halloween costume in the online game Sorority Life, are no more than a collection of pixels on a Web page.
But it is quickly becoming commonplace for people to spend a few dollars on them to get ahead in an online game or to give a friend a gift on a social network.
Analysts estimate that virtual goods could bring in a billion dollars in the United States and around $5 billion worldwide this year — all for things that, aside from perhaps a few hours of work by an artist and a programmer, cost nothing to produce.
“It’s a fantastic business,” said Jeremy Liew of Lightspeed Venture Partners, a venture capital firm that has invested $10 million in several virtual goods companies. “Because it’s digital, the marginal cost for every one you sell is zero, so you have 100 percent margins.”
Photo by Playfish.
Angela Shupe on November 13th, 2009 3:30 am
I think that buying virtual gifts and game cash can be a waste of money but I have to admit, I’ve done it. I can see why there is so much money to be made there, especially in game cash. Sometimes it can be hard to pass up that opportunity to ‘upgrade’, like in Restaurant City. $5 put towards coins can go a long way in renovating the restaurant.
RedHotFranchises on November 13th, 2009 10:25 am
With the increasing numbers of MMORPG Games around, Many have resorted to buying Vitual goods to get ahead of the game, and it can turn into a very lucrative business and better yet if you have a Passion for it!
Each different MMORPG, has it’s own specific industry with a variety of virtual goods.
Welcome to the Digital Age.
danec on November 12th, 2009 12:12 pm
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