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14 Aug

Socnets are an increasing source of virtual good spending

Virtual Goods

eMarketer’s article “Virtual Goods Mean Real Dollars” emphasizes the fact that the creation of virtual goods is one of the most promising ways for marketers to enter the virtual world space and that social networking sites are a growing source of virtual spending platforms.

With an increasing number of virtual worlds and social networking sites offering branded virtual goods to their members, the increase of 134% in revenue totals from last year is not a surprise. This statistic is predicted by Piper Jaffray’s “Pay to Play” report. The report continues to explain that most of the branded virtual goods revenue came from virtual worlds last year, and the authors predict “the trend is shifting to more virtual goods revenue coming from social networks.” This trend is something the industry experienced first-hand with Britney Spears launching her branded virtual goods in Facebook’s gift shop just yesterday. Read more here.

Debra Aho Williamson, eMarketer’s senior analyst, said “nothing says engagement like a flock of avatars crowding a virtual store and showing off their haul in their virtual home.” This is true and the fact that virtual good purchases are becoming more of a norm, is proving to marketers and retailers that virtual goods are desired in the real world. Marketers must realize that there is a need to alter their virtual goods constantly so they can stay on top of the consumer demand.

Here’s our forecast for virtual goods.

14 Aug

A clever way to raise money… Britney does it again

Virtual Goods

Britney Spears has thought about it and realized that virtual gifting may be the answer to raising money in this crisis and that virtual goods are “in.” The pop singer is selling branded virtual goods on . This is a first for the social networking site reporting that it marks a first time a global recording artist is offering “virtual gifts specific to their likeness.”

Computer iconographer, Susan Kare, collaborated with Spears to design the star’s themed gifts. The gifts are all based around “memorable Britney moments” and include items such as her infamous schoolgirl outfit, a Britney birthday cake, and icons of the singer. Each gift costs 20 credits in the , an equivalent of $2. With close to 2 million Facebook friends, Britney Spears may have found the solution to raise an easy million.

13 Aug

Intel Labs and Fashion Research Institute Collaborate

Virtual Goods

Intel Labs and the Fashion Research Institute (FRI) have entered into a new research collaboration that will help fashion designers make more efficient usage of virtual worlds.

The Fashion Research Institute is providing visual content to aid Intel’s 3D Internet research, while Intel supplies the technology. Shenlei Winker, CEO of FRI, explains in his blog that “this collaboration is currently scheduled to run for a year, during which time FRI will provide increasingly complex, highly detailed, large scale (beautiful) designs which will be showcased in Science Sim with hosting and hardware provided by Intel Corporation.”

FRI is interested in virtual worlds because the fashion industry, which uses soft consumer goods, does not use 3D computer aided design tools used in the durable goods industry. Designing clothing and fashion accessories, real-life 3D objects, are more accurately displayed with 3D sketches rather than 2D sketches. The advantage of using a 3D environment, such as a virtual world, in design concepts will reduce errors when replicating, manufacturing, and producing the design.

Furthermore, fashion designers and manufacturers can greatly reduce environmental waste as well as time by designing and re-creating prototypes in virtual worlds. One example is that designs can be reviewed simultaneously by designers and manufactures on different sides of the globe.

31 Jul

Virtual goods purchased by 12% of Americans

Virtual Goods

A new study released yesterday by Frank N. Magid Associates and PlaySpan shows that more than one in 10 Americans or roughly 12 percent have bought a virtual item at some point in the last 12 months. The virtual goods and currency market is estimated to reach $1.8 billion this year (US) and demographic research offers insights into who is buying what and where.
Virtual world usage is significant as nearly half of the respondents who report being active MMO participants are also virtual item consumers.
More info can be found in the article by Wagner James Au here.

28 Jan

Trend watch: Virtual world search terms

We’ve taken a look at this before – search terms landing on the K Zero website. Here’s some interesting searches from Jan….

opposite of interoperability

adult virtual worlds

second life demographics

virtual worlds for 11 year olds Continue reading →

20 Jan

Puma in Football Superstars: Virtual store and goods

Virtual Goods

Football Superstars is now live and doing rather well with over 250k registered users already (more about this over on ). Puma is one of the lead brands in-world at the moment (with Reebok) and is deploying a virtual goods strategy. Here’s some imagery from the campaign.

Continue reading →

20 Nov

Goodbye IMV2 aka Google Lively

So, Google Lively is closing down at the end of the year.

Does it matter?

Not really. Although many people spoke about ‘validation’ in the industry by Google entering the VW space, there was no fundamental strategy in place. And validation isn’t really important because it’s the kids using the other popular worlds who are driving adoption today and more importantly taking us to new frontiers in the future.

People spoke about the brandopportunitiesin Lively. These didn’t materialise. After all, it’s a short list of brands that would want their rooms listed next to sex clubs. Plus, branded rooms is a throw-back to the marketing disasters we saw in Second Life in 2007.

They didn’t really understand their target market for Lively either. Who were they targeting? Did they even know?

Continue reading →

24 Oct

Growth areas in 2009 for virtual worlds: 15 to 25

The 15 to 25 year old segment is nowhere near as hectic as the 5 to 15 space in terms of virtual worlds but nevertheless contains companies with impressive user numbers – IMVU and Gaia being great examples. This segment also has some high value characteristics, such as:


  • Higher and more direct access to monetisation (wallets/purses)
  • Prevalence/usage of existing social networking apps
  • Larger and more cosmopolitan social networks
  • Higher mobile device penetration


So where are the growth areas in this space?


Fashion / Lifestyle


Avatar customisatiom appears to be popular across all age segments of virtual worlds. View one: just as in the real world, people want to express their personalities via their appearance. View two: if a virtual world gives users the facility to change their apperance then they will. Either way, it’s popular.


Brands in the fashion, clothing and accessory sectors have major opportunties in virtual worlds. We’ve seen this already in Second Life, Stardoll and There. And there’s two angles here:


a. Using VW’s on an integrated basis to promote real world clothing lines

b. Creation of metabrands to leverage brand equity


Expect more companies in this category to move in. Here’s a post about luxury brands and virtual goods.

Continue reading →

The FT says: Virtual goods networks could rival ads

Nice little article from the FT about how virtual goods revenues could offset online advertising. My view is that it isn’t about offsettingrevenuesin turbulent times – virtual goods will in time be a dominant income stream for brands and companies regardless of the economic situation. A view shared I’m sure by Viximo, referenced in the article.

Related: The rise of the Metabrands


If online advertising is under pressure, perhaps branding virtual goods can help make up a greater proportion of revenues….

Virtual goods are seen as having more impact than ads on Millennials – the 13-26 age group who largely populate social networking sites and will respond more to receiving Godiva chocolates or Nike Air shoes, even if they are not the real thing.

Virtual Pursuits – Who’s on the Radar?

It’s been a week of talking about the future of virtual worlds with VC’s, investors and research companies. The over-penetrated sectors, the under-served niches and where the smart money should be placed from an investment perspective. It’s also been a week of looking at a lot of business plans for potential new worlds with the founders not always realising there’s already competition in the space they’re looking to enter.


On that note, I thought it would be be interesting and useful to segment the Universe graph by sector and genre to shed some light on the questions above.


So, I’m dieingto call this graph ‘The Wedgie’, but I’ll settle on the ‘Radar’ (or maybe even Vadar). Here we go:

There’s a lot going on – we know this, so to make this a little easier to assimilate, it’s broken out a little below (and a high-res PDF version can be requested here).


Socialising/chat, casual gaming and misc are shown below with bands reflecting age groups. There’s about 25 worlds off the radar (i.e. in stealth mode) not shown here. Blue dots refer to worlds in development or closed beta. Red are live or open beta.

Mirror worlds, roleplay/fantasy/quests and toys/real world game worlds are shown below. The toys and real world games sector is a hot area right now, set for continued growth in the next 12 months. Mirror worlds are one of the few categories tailored towards older users.

. Continue reading →

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