Virtual goods remain a promising alternative to advertising, and even to subscription revenue for many games and social networks. As mobile games continue to play an important role in gaming revenue, I would expect to see the sales of virtual goods continue to skew toward mobile devices as users seek instant gratification and bite-sized chunks of high-quality gameplay.
Gaming on cell phones has long promised to be an important revenue generator for mobile carriers and game developers, but it took quite awhile for it to drive real revenue in the U.S. But worldwide, especially in Asia, mobile gaming has been emerging as an important revenue generator for a number of years.
Last week, research firm Gartner predicted that worldwide mobile-game revenue will grow 19 percent, reaching $5.6 billion in 2010 with an expectation to more than double to $11.4 billion in 2014.
Mobile gaming is a very broad classification which also includes new and interesting … Read more
New research from Nielsen Games shows that the purchase of a specific game title actually ranks lowest in a list of purchase motivators and that consumers are driven by a myriad of factors that relate more toward a longer-term usage pattern than an impulse purchase for a specific title.
In the study of God of War III--a PlayStation 3 (PS3) exclusive--Nielsen found that the new game title had some influence in the sale of the console, but far less than would have been expected. In fact, buying a specific game was at the bottom of the list of purchase motivators.… Read more
New data from PlaySpan, a provider of payment and monetization solutions for online games and virtual worlds, shows that digital and virtual goods purchases are going global, and that revenues can be tracked to better ascertain the size of the market.
It's estimated that virtual goods will generate $1.6 billion in the U.S. in 2010. Some predict that sales of digital goods will account for 20 percent of gaming revenue by 2011.
As part of analyzing which players and geographies drive the most revenue, PlaySpan has settled on a metric of average revenue per paying user (ARPPU), … Read more
A new study by virtual goods provider Viximo suggests that by 2011, sales of virtual goods will amount to 20 percent of U.S. game software revenues.
According to the report (registration required), this forecast is predicated on the expectation that virtual goods will grow faster than the overall gaming software industry. In 2009, U.S. retail sales of console, portable, and PC game software generated revenues of $10.5 billion, an 11 percent decline over the $11.7 billion generated in 2008. In the meantime, virtual goods revenues are expected to hit roughly $1.6 billion in 2010 and … Read more
Alternative payment methods enable developers to monetize significantly larger portions of their user base, according to a study released Wednesday.
Fifty-three percent of social gamers surveyed for the study, overseen by ComScore and Offerpal Media, said they are enthusiastic about alternative, or indirect, payment methods as a way to earn virtual currency for free, rather than having to pay for it directly.
These alternative forms of payment take many forms, including filling out a survey, watching a video, shopping at online retailers, or signing up for a subscription in order to get points for the games they play on leading … Read more
For as far back as we've been discussing social networks, there have been question marks around the best ways to monetize users. To date, advertising has been the primary strategy, with virtual goods starting to pull in some serious revenues.
But the challenge with advertising is that users tend to ignore ads that are not highly targeted. Even precisely targeted ads are largely ignored, which is why you see more and more of them taking up screen real estate. This has also led to more sites adopting a "freemium" content model.
And targeting is even more of a challenge when users are mobile, but mobility also introduces a whole new way to interact with and monetize users.
One of the more interesting companies in the location-based services (LBS) space is Foursquare. Surely, you've seen some message in your Twitter stream telling you that your friend is at some location or is the mayor of whatever, or has unlocked a badge.
And while Foursquare has nowhere near the user base of Facebook or Twitter, the users are very valuable as they promote the places they go and things they do simply by mentioning them in their communication stream.
According to The New York Times, Foursquare plans to distribute a new analytics tool and dashboard in the coming weeks that will give business owners access to a range of information and statistics about visitors to their establishments. This means that businesses can more effectively target users with specific offers and ads.
But what it really provides is a way for Foursquare and other location-aware services to make money.
Going back to 2001, I remember talking about location-based services while working at OmniSky, a way-too-early provider of hardware and software that turned handheld devices like the Palm V into mobile devices. We even acquired an Israeli company called NomadIQ to deliver location-based content.
Ten years later we're just starting to see location-based offers roll out in the U.S.--better late than never?
Many of the early international LBS were very basic social networks (primarily dating) and the demand for such services in the U.S. simply wasn't there, partially because of social mores and also partially because mobile devices have evolved fairly dramatically. … Read more
A few months back, I searched high and low for a few decent Mac games in preparation for a series of long flights and found myself looking at titles that were long surpassed by their PC brethren. Titles for the Mac are a dismal representation of what's going on in gaming.
But it looks as if that's about to change.
Doug Lombardi, Valve's VP of developer marketing, confirmed to MacNewsNetwork that the company is planning to port some of its most popular games to the Mac. And while details remain thin, most in the gaming community view … Read more
In the early 1980s, each arcade video game kept a list of that game's top players. Three decades later, thanks to a prestigious college-prep service, we now have a list of the top academic players in video game design.
The Princeton Review recently surveyed 50 game design programs at U.S. colleges in order to handpick the eight top schools to attend if you're interested in game development. It based its selections on a variety of criteria including: curriculum quality, school staff and infrastructure, scholarships and financial aid, and career opportunities.
The top eight undergraduate game design programs: … Read more
I few months back I wrote about Ohai!, a relatively new social gaming company founded with the goals of making social gaming more fun and accessible.
One of the things that has struck me in the past is whether or not game companies should build directly on Facebook (or other sites) or go stand-alone. Fortunately, Ohai CEO Susan Wu spent a great deal of time thinking about that very topic and posted her thoughts in a recent blog post.
According to Wu, when people play the game embedded through Facebook, their usage pattern tends to be bite sized: five- to six-minute sessions about eight to 10 times a day. When people play directly at the City of Eternals site, they'll play for 20-plus-minute sessions two to three times a day.
And the experience is a bit different, as gameplay on the direct site is more immersive than in Facebook. The stand-alone site has a theoretically better playing experience, since it's full-screen, which can also lead to different types of behavioral patterns in the game.
Data so far suggests that on-site players may be more likely to partake in longer missions, and more interested in joining groups and performing group activities. Players may also be more likely to participate in exploratory vs. discrete goal-oriented behaviors, such as completing specific missions. … Read more