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Virtual Goods Spending Skyrockets

August 2, 2009Written by Kyle P.


Research and consultancy firm, Frank N. Magid Associates, and PlaySpan, the leader in monetization solutions for online games, virtual worlds, and social networks, today announce a new study that evaluates attitudes and behaviors of media and entertainment consumers on virtual goods expenditures.

According to the study, 12% of the overall population surveyed reported that they had bought virtual goods in the last 12 months. However, a closer look at the digital entertainment habits of virtual goods buyers reveals that virtual world visitors are the heaviest virtual goods buyers, with 46% of these consumers buying virtual goods (from virtual worlds, games or social networks) and nearly one third of iPhone owners buying from the same platforms.

Other results were reported as follows:

Largest demographic of consumers who have reported buying virtual goods:

  1. Females ages 25 to 34 (17%)
  2. Males 12 to 17 and 18 to 24 (both at 15%)
  3. Female 12 to 17 (15%)
  4. Females ages 35 to 44 (15%)

Where consumers are buying from:

  1. Marketplace of the virtual world or game that a user is playing in (29%)
  2. The official Web site of the virtual world or game (29%)
  3. A web site of an authorized reseller of the virtual items (25%)
  4. A web site of an unauthorized reseller of the virtual items (8%)
  5. Another player (7%)
  6. Other (5%)
  7. Not sure (27%)

Ethnic breakdown of virtual goods purchasers:

  1. Asian American (16%)
  2. Others (15%)
  3. Latinos (14%)
  4. Caucasians (12%)
  5. African American at 10%

While the greatest number of consumers (51%) that bought virtual goods said they were not sure how much they spent last year, those who did recall (27%) said they spent less than $50 in the last year on virtual goods, with the average price of all transactions averaging $30. Another group of consumers (15%) said they spent $100 or more, driving substantial annual revenue per user

“The fact that lots of people are reaching into their pocket to buy virtual goods is impressive, but even more impressive is that some of those consumers are spending considerable dollars,” said Mike Vorhaus, President, Magid Advisors. “As this market grows, Magid believes that the majority of consumers will continue to spend $50 or more on virtual goods every year, and this will grow to be a multi-billion dollar market.”

“This data reinforces the high growth potential of microtransactions and digital goods for online games and virtual world developers,” said Eric Hartness, Chief Marketing Officer of PlaySpan. “Our internal data and client conversations also corroborate the findings, and we’ve noticed a significant increase in the number of customers who now spend several hundred dollars per month on digital goods.”

According to various sources, revenue from virtual goods now stands at a $200-250 million dollar market in the U.S. alone, with firms such as Strategy Analytics reporting that microtransactions are expected to grow from slightly over $1 billion today worldwide to $17.3 billion in 2015.