Last week local news reporter Jon Keller of WBZ (Boston’s channel 4) caught wind of the emerging virtual goods industry and came by and did an interview with Viximo about virtual goods and the holiday season.  The holidays bring along some very good opportunities for publishers with virtual goods models to increase revenue.  As I sit here at Starbucks writing this blog post, the similarities between offline merchandising and virtual goods merchandising become very clear.  Here are just a few best practices for virtual goods providers on how to capitalize around the holiday season. The Content Go...

At Viximo, we have evaluated dozens of companies selling virtual goods to identify and compare the common threads between successful and unsuccessful implementations. I will be sharing some of these insights through a weekly blog series called “Virtual Goods Keys to Success.” As the first post in this series the lesson is one which you should think about prior to implementing: making virtual goods part of the core experience rather than just an additional feature. In order for virtual goods to be successful, they need to be a core part of a product’s experience. Virtual goods need to be more...

Virtual Goods and Virtual Currency are gaining a significant amount of attention these days among the press and the technology industry as a new way to drive revenue. With online ad revenues plummeting, it is easy to understand that everyone is searching for that next big thing which will help replace lost revenue. But for a publisher, how do you cut through all the hype, and get down to truly evaluating if virtual goods are right for your product? Is Your Product Social? Virtual goods are valued by users based on their social implications. A user doesn’t send a virtual gift because...

While the size of the global virtual goods market is a robust $5.5 Billion, it is no secret that the majority of this is generated in Asia. Asia makes up about $5 Billion (or 90%) of the global virtual goods market. Are virtual goods an isolated occurrence in Asia? Will the size of the North American virtual goods market ever be equal to or greater then Asia’s? We Are Still Early North America is still in the first inning of the virtual goods ballgame. Virtual goods only started to gain serious traction in the US near the end of 2007, early 2008. The Asian virtual goods market, however,...

Virtual goods is emerging as a major business model for community driven products such as social networks, dating sites, multiplayer games, and more. Virtual Goods have proven to drive significant revenues for many companies, but compared to other models such as advertising, subscription, and fixed fees, what are the additional benefits from a virtual goods model, in regard to community based products? Value Add Business Model Everyone can agree that online ads do not contribute positively to the user experience in an online community. Mostly, this is due to that fact that users behave quite...

There is no question that virtual goods is the hot new business to be in. Social networks, games and virtual worlds are implementing virtual goods at an increasing rate. $408 million of venture capital was invested in virtual goods companies in 2008 , and that number already exceeds $300 million in the first two quarters of 2009. But virtual goods have been successful in Asia since 2000. Social networks, games, and even virtual worlds such as Second Life have been around for years. This begs the question, why are virtual goods just recently becoming the new “it girl”? Advertising, The Lazy...

After explaining why people buy virtual goods, I often get follow up questions around what type of people are active virtual goods buysers. There is a common myth that virtual goods are only bought by teens or kids. But if you look at industry data you will notice that all ages, demographics, and cultures actively spend real dollars on virtual goods. Here are just a few examples in each age segment: 35 – 50 Years Old Dogster – 67% between 35 – 50 years old. In 2007, Founder Ted Rheingold stated at the Virtual Goods Summit that over 50 million virtual gifts had been sent by 500,000 users...

Last Thursday, Facebook officially announced the alpha testing of their Facebook Payment platform. While they are just rolling it out now, it certainly hasn’t hindered a virtual goods ecosystem from forming across many applications. Certain bloggers have even predicted up to $500 million in 2009 virtual goods revenue for application developers. But now that Facebook has started focusing on a key component which will accelerate the development of the virtual goods ecosystem, how will this impact virtual goods sales on Facebook? 1. Facebook Payments Will Expand The Market Of Virtual Goods Purchasers Facebook’s...

The Virtual Goods industry is growing extremely quickly. Some estimate the size of the industry to reach $5.5 billion globally this year, and it is just beginning. There is no escaping the fact that consumers spend money on virtual goods, even in economic down times. Others in the virtual goods industry, such as Charles Hudson and Jeremy Liew, have written articles explaining the psychology behind buying virtual items. Yet, the question of why people spend money on virtual goods is still one of the most common questions I am asked. So I decided I would add an additional perspective as to why...

Social Gaming Summit is coming up in June in San Francisco. Â This is one of a few small conferences that Charles Hudson of Serious Business organizes. Â Others include Virtual Goods Summit and iGames Summit. Â Charles and his crew always do an amazing job at bringing together some incredibly smart people. Â These summits are by far the most productive conferences I have been to in the past couple years. Even if you aren’t directly involved with gaming I encourage you to go. Â The rest of the web can learn a lot from the gaming world about motivating user interaction and monetizing their...