VIRTUAL GOODS AND
VIRTUAL GIFTS
Engage Expo – March 10th, 2009

Understanding Virtual Goods
People spend their time, energy, and money on the

things that are important to them
 Engaged users  virtual goods potential

Virtual Goods
Four key drivers for virtual goods adoption

 Self-expression
 Competitive advantage
 Social Gestures
 Status

Self-Expression
Scrapblog Premium Templates Gaia Online

Self-Expression
Meez IMVU

Competitive Advantage
MobWars (Facebook) Friends for Sale (facebook)

Social Gestures
Hot or Not Facebook

Status
Xbox Live Achievements Kongregate

Payment and Virtual Goods
Payments are still a challenge in virtual goods

 Credit cards
 Incentivized offers
 Pre-paid cards
 Mobile solutions

VIRTUAL GIFTS

Virtual Gifts
Gifting in real life

 What makes for a good gift?
 Why do people give gifts?

Where Virtual Gifts Work Best
Community Sites

 Social Networks

Virtual Gifts - Examples
Facebook

 Social proof
 Expressive
 Strength of relationship
 Relatively inexpensive

Virtual Gifts - Examples
HotorNot

 Analog equivalent
 Attention-seeking
 Status symbol

Market Sizing Overview (US)
Conservative Estimate

 Casual MMOs /Virtual Worlds = $50MM-$75MM
 Social Networking Applications = $50MM-$75MM
 Other FTP games = $50 million
 Console games = ?
 Hardcore MMOs = ?
 Non-game applications = ?
Total = $200 million+ in 2008


Blogs and Resources
Jeremy Liew, Lightspeed Venture Partners

 Andrew Chen, Futuristic Play
 Virtual Goods News
 Inside Facebook
 Virtual Goods Summit