The Real Business Of Virtual Goods

Would you let your child buy a virtual sofa for their room in Habbo Hotel?

Let’s forget about the fact that most young people don’t even care about Habbo Hotel anymore (or do they?), but the thought of spending any form of "real" money on virtual goods makes many people get very uncomfortable. Today, Marketing Charts, has an eye-catching news item titled, 13% of Online Consumers Buy Virtual Goods. With close to two billion people online, that’s a pretty significant number.

"On average, virtual goods buyers aged eight to 64 spent $92 on virtual goods last year. Among the 12-to-64-year-old demographic, average spend increased almost 14%, from $87 to $99, between 2009 and 2010."

The information is based on a new study from PlaySpan and Magid Associates, and they define "virtual goods" as, "non-physical objects that are purchased and exchange on the internet in games, virtual worlds and social networks. Virtual goods can be simple items such as virtual points, tokens, or more complex items such as avatars."

There’s more to virtual goods than meets the eye.

It’s not just about buying someone a beer on Facebook or leveling up in World of Warcraft. I’d argue that apps and more could (and should) be considered virtual goods as well. What’s the difference between buying an app for the iPad or a sword in a MMORPG. When you see a headline like, "13% of Online Consumers Buy Virtual Goods," we tend to forget that as content becomes more digital (from music and TV to movies, books and software), the majority of people online are buying some form of virtual goods.

Goodbye to the physical object? 

I used to be in the music industry. I used to collect music. I have thousands (upon thousands) of LPs, cassettes and CDs. They’re all in boxes somewhere. They’re in storage. The music that I love is everywhere (YouTube, Pandora, satellite radio, etc…)… it is anywhere, and the physical object of it seems less important as the time rolls on. I used to think that paying for apps on the iPhone was crazy considering the cost of the device and the many free apps that are available, but once you get over that initial hurdle of paying for virtual goods, the floodgates seem to open up, and their value is as relevant as those physical thingamajigs that we all stock up on.

Virtual goods are going to play a huge part in our real economy as the days, months and years drone on. 13% is just the beginning (and it’s not even all that accurate).