Study: U.S. Consumers Spending On Virtual Goods Grew To $2.3 Billion In 2011

It’s not exactly a secret that gaming has found new life on the web, social and mobile platforms. Of course, with it, especially the rise in free-to-play gaming, developers need to find ways to monetize their apps, or their browser-based games. Beyond mobile or banner advertising, there is the option of in-app or in-game purchases — the old in-game freemium model. Give your game away for free, sell new levels, armor, weapons, life for a buck or two. Lots of games have incorporated virtual marketplaces to hawk virtual goods of all kinds.

This is the first paragraph of an article found on Techcrunch. It contains some interesting insights that fit the consumer and business insights focus of our blog. The article continues …

And good news for game developers: Virtual goods are hot and getting hotter. PlaySpan, the Visa-owned Monetization-as-a-service provider released a study today that reveals, among other things, that consumer spending on virtual goods has doubled since 2009. (Virtual goods, by the way, being a combination of both virtual currency and virtual items.) Not only that, but $2.3 billion worth of virtual goods were purchased in 2011 in the U.S., up nearly 30 percent from 2009. That means, on average, gamers spent $64 on virtual goods in 2011, roughly equivalent to the price of a console game.

Again, it’s all up-trending, as 35 percent of U.S. gamers have purchased a virtual good, a 50 percent increase from 2010. Of course, unsurprisingly, the gender breakdown shows that men are twice as likely as women to purchase virtual goods. To break that down further, nearly 50 percent of males under the age of 24 said they bought a virtual good in 2011, whereas only 15 percent of females in the same age group had done so.

Karl Mehta, founder of PlaySpan, said that he thinks we’re getting to a point where consumers are truly becoming comfortable with buying virtual goods on the web and on mobile devices. For example, the study found that, of those in the U.S. who had not purchased virtual goods, 70 percent expressed a willingness to do so. This comfort and openness to virtual transactions represents not only a huge opportunity for gaming, he said, but for the majority of digital content companies — those trafficking in music, movies, social gifting, rewards, etc.

This demographic data could be a big boost to producers and distributors of all digital content, allowing them to hone their strategies for reaching the right audience — across platforms. For instance, when it comes to why users purchase a certain game, 64 percent said that their choice was based on the price of the game, 51 percent was based on genre, while 48 percent said that their friends’ recommendations were a factor in their choice. This latter bit, in particular, is a huge validation for social gaming companies, or studios considering whether to integrate with the social graph, or enable users to friendsource recommendations, or share what they’re playing (or their achievements) with friends.

…..

Read full article on Techcrunch