13 Ravi Mehta -- igbos n_
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The document discusses virtual goods and how they generate real revenue. It notes that a Chinese portal generates 65% of its $500 million revenue from virtual goods. A Korean gaming company reported $230 million in revenue with 80% from in-game items. Virtual goods allow people to project social gestures and values onto online communities. A case study on Dogster found that its 500,000 members have sent over 50 million virtual gifts in the past two years to express friendship, support, and gratitude.
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13 Ravi Mehta -- igbos n_
- 1. REAL VALUE FROM VIRTUAL GOODS Ravi Mehta VP, Publishing - Viximo [email_address] - Email www.virtualgoodsinsider.com - Blog Proprietary & Confidential
- 2. WHAT IS A VIRTUAL GOOD? VIRTUAL GOODS INDUSTRY Proprietary & Confidential As virtual goods evolve, theyll grow to include all digital media including music and video
- 3. VIRTUAL GOODS ARE GENERATING VERY REAL REVENUE FOR PIONEERING COMPANIES VIRTUAL GOODS INDUSTRY Proprietary & Confidential Chinas largest Internet portal generates 65% of its $500M revenue from virtual goods In 2005, this Korean gaming giant report ed $230 million in revenue with 80% generated by in-game items Koreas Facebook generates $160M revenue annually entirely from virtual goods Facebooks Gifts service has generated $15M since February 2007 The youth oriented dating site generates 40% of its revenue ( $6-7M ) from sale of virtual flowers at up to $10 per flower This virtual world with over 75 million users globally generates $60M annually from virtual goods This niche social community for pet owners has had over 50 million giftings by its 500,000 users since its gifts program started 2 years ago NORTH AMERICA EUROPE ASIA MindArks virtual world, Entropia Universe, holds the 2008 Guinness World Record for Most Expensive Virtual Object, a space resort that was sold for $100,000
- 4. WHY DO PEOPLE SPEND REAL MONEY ON STUFF THAT ISNT REAL? VIRTUAL GOODS INDUSTRY Proprietary & Confidential A $100 bottle of Diaka Vodka which is colorless, flavorless, and made from $2 in grain A $97,500 Piaget watch that contains a few ounces of precious metal and tells time (less accurately than your cell phone) A $100,000 piece of virtual real estate that can be traded on a highly liquid market and generates a 20% annual return (2x most stocks) POP REALITY QUIZ Which of the following is most real ? A Stanford University research study has shown that people arent wired to distinguish between real world stimuli and digital stimuli: Study participants showed the same tendency to smile back regardless of whether smiled at by a real person or a digital avatar. Study participants felt the same feelings of elation when receiving a physical gift and when receiving a virtual gift. Cant relate? Put yourself in the shoes of someone who spends 20-50% of her waking hours immersed in an online community. How real and tangible would that community be to you?
- 5. WHAT VALUE DO PEOPLE GET FROM VIRTUAL GOODS? VIRTUAL GOODS INDUSTRY Proprietary & Confidential
- 6. VIRTUAL GIFTS PROJECT THEIR VALUE ONTO SOCIAL GESTURES AND ENRICH COMMUNITES VIRTUAL GOODS AND SOCIAL NETWORKING Proprietary & Confidential
- 7. CASE STUDY: DOGSTER VIRTUAL GOODS AND SOCIAL NETWORKING Members spend between $0.25 and $4.00 to send virtual gifts Dogsters 500,000 mainstream members have sent over 50 million gifts in the past two years Gifts sent for friendship, support of sick/dying pet, acknowledgement of community contribution, to reciprocate for gift given, just because Proprietary & Confidential