Earlier this year, I blogged about the growing value of virtual goods – expected to reach $1.6 billion in the U.S. for 2010. A new report shows that this business is booming on a global basis. To a large extent, the hypergrowth is being fueled by younger consumers and by the rising use of smartphones and social networks.
According to In-Stat, the virtual goods industry will end 2010 with a total value of $7 billion, globally. Consumers in the U.S. and Europe, Middle East and Africa account for only 25% of this business. The Asia/Pacific region largely owns this market as virtual goods are very popular with those consumers.
Vahid Dejwakh, Industry Analyst at In-Stat, sees a positive future for virtual goods because “social networking and pervasive smartphones are driving gaming beyond this core base,” of teen boys. Both young men and women are purchasing virtual goods.
In-Stat analysts believe that the total market will easily grow to $14 billion, globally, by 2014. At the same time, about 10 companies currently control 73% of revenues. Several types of businesses including micropayment facilitators, app developers, virtual – 2D and 3D worlds, social networks and casual and social games are all competing in this market space. At the same time, experts are already considering both the legal and tax implications of products being traded in the virtual goods market.
While those details are being worked out, key players are marketing in both the BtoC and BtoB space to build their brands and their revenue base.[Source: Online Gaming and Social Networking Drives Virtual Goods Revenue Over $7 Billion in 2010. In-stat.com. 16 Nov. 2010. Web. 3 Dec. 2010]