When you want to send a friend a virtual gift, Facebook now splits the gift dialog into different sections:

Click on Sport and Celebrities and you find a variety of branded virtual gifts:

Do you think those branded virtual goods are attractive to the Facebook users?

During the past months, our trainee Matthias analyzed the virtual goods market, especially in the area of social gaming, social networks and virtual worlds. Today, SnipClip announced at the GamesBeat conference, where Oliver will pitch for SnipClip at the Who’s Got Game competition, that it will publish the results. The press release highlights some interesting insights:

Average revenue per monthly active user per year:

• non-gaming social apps: $0.37
• social games: $3.65
• virtual worlds: $8.04

Market potential for 2008:

• non-gaming social apps: $215 millions
• social games: $340 millions
• virtual worlds: $244 millions

Matthias posted about the 10 Tips for Monetizing Social Traffic Through Virtual Currency from OfferPal. Now OfferPal published a whitepaper titled 20 Tips for Monetizing Social Traffic through Virtual Currency. Quite interesting!

According to a study from TubeMogul users prefer very short video (what we call video snips):

Via PR Blogger.

I read a really good blog post from Anu Shukla from Offerpal on Inside Facebook. She gave the following 10 tips for monetizing social traffic through virtual currency:

1. Understand your users´ motivations

2. Create multiple methods for users to earn virtual currency

3. Sell “decorative” virtual goods

4. Sell “functional” virtual goods

5. Sell virtual gifts

6. Keep it fresh

7. Make it fun

8. Promote your currency

9. Study traditional game mechanics

10. Measure, analyze and optimize

Read the full blog post here. I really recommend it.

Good bye and stay tuned.

Cool, the sessions from the Virtual Goods Summit 2008 are online now, e.g.:

Update: sorry my first post referenced the old videos. I updated the link and the video.

If something is going wrong it is and it always was popular to blame a technology for it (mostly because a technology can not response to it). The church did it for example when printing was invented and Andrew Keen is doing so in his blog post The Great Seduction: Confessions of an Internet iconoclast. He is blaming the Web 2.0 for destroying our culture and business. He is right in his analysis, but wrong in his conclusions:

The biggest financial problem is that the supposedly new media economy of blogs and YouTube videos isn’t making the content creators much money. That’s because today’s digital technology has made almost all content free, thereby undermining media’s historically successful business model of selling content to consumers. [...] The greatest losers, then, in this great cultural transformation are our traditional creative class – professional musicians, journalists, film-makers, photographers and animators — who are now struggling to monetize their talent in an advertising saturated economy where all the serious cash is being channeled to technology providers like Google, YouTube and MySpace.

Yes, people are not willing to pay for content, because the content does not provide an added value to them! In the past, information was restricted. It provided a competitive advantage or it gave you social status. In the Internet age, information is available everywhere and everytime. Thus our old business models fail and companies that relied on these old business models will fail too! That’s economy. That’s evolution. Don’t blame technology for it!

I do not agree with Andrew Keen that the creative class is suffering from these changes. The opposite is true. Never in history there have been such possibilities for creative persons to show and to monetize their work without the need of large corporations. The Internet democratizes the media distribution. Thus more people will profit, but in less quantity. It’s bad for a few, but good for many.

I agree with Andrew Keen that technology providers like Google, YouTube and MySpace profit most from the new business paradigm, but only because the existing market players are not willing to invest in new market ideas. The media companies have to overcome their fear and to reconquer their markets. They know better how to serve the consumers’ needs than a technology provider like Google. They have the content that consumers are urging for, but they have to unclose their content.

So take the risks and have a good time!

Martin

On my search for scientific literature for my diploma thesis I stumbled over a very interesting research about Online Video from PEW / American Life Project.

57 % of the Internet user send video links to others and also 57 % watch online videos with others. Young adults are the most social online video viewers.  73 % have watched with others. Overall three out of four receive a video link.

This encourages us in our belief that consuming digital content is a social interaction.

Goodbye and stay tuned.

“Virtual goods are real goods” states a Netherland court:

In today’s society, the virtual goods from online computer game “Runescape” or become great significance. For large numbers of online gamers these goods have value. The more a player virtual goods has, the stronger he is in the game. Moreover, the money for virtual goods bought and sold, including via the Internet or on the playground.

Of interest is that not a mortal need to be. In the case law has determined that non-material objects – such as electricity and scriptural money – as well as in criminal sense. The virtual amulet and the virtual template as defined in this case are not material goods, although they are noticeable. Having regard to the said case law is that no impediment to them as well as provided for in Article 310 of the Penal Code to brands.

Via Virtual Worlds News: Netherlands Hand Out Sentence for Virtual Goods Theft; Holds Them As “Real Goods”

If you are in the virtual goods business like we are then this is a must-read article by Eric Ries, the CTO of IMVU:

I was invited to the Virtual Goods Summit yesterday, and got to see quite a few interesting speakers and panels. It got me thinking about what decisions are essential when building a virtual goods product.

Read the full article: Lessons Learned: Three decisions to make on virtual goods