Must read on virtual goods (even if you don't work with it)
Virtual Goods in Asia
View more documents from Benjamin Joffe.
Must-read presentation for anyone working with online in general and virtual goods in particular. Some takeaways (read the entire report for everything):
* Virtual goods can be as big as search ($30 billion/year) in the US (based on market size in China, Korea, Japan)
* Examples of leading sites and games in Korea, China and Japan (Cyworld, Maple Story, Pigg, NicottoTown, Poupee Girl, QQ Pet, Meet-me, Nurien, Mixi, Gree, QQ, Renren, Kaixin001, 51.com, and others)
* The history of farming games (a'la Farmville). Sim Farm was released in 1993. Innovation in gaming, social and viral aspects.
* Business model evolution: 1) packaged software, 2) online + subscriptions, 3) virtual goods, 4) social games
* 8 listed Chinese online games companies and Tencent (QQ) have a combined market capitalization of $52 billion. Leading Western games companies Electronic Arts, Activision, UBI Soft and Take Two have $22 billion in market capitalization.
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2 Comments:
Virtual goods is a great business model, but Europe/US market will not be the same as in Asia. I's huge, but not as big as over there due to the culture.
Anyways, Plus 8 star have great presentations!
The "culture" point is possibly the hardest to go past (the business models & social/psychological mechanics of virtual goods are also high, but somewhat lower). In short: the success of virtual goods in online games / SNS has very little to do with culture. Even World of Warcraft is starting to sell virtual goods! There are cultural factors in the degree of success of some specific items / concepts, but fondamentally, humans seem to be pretty similar and "respond to incentives".
Benjamin / CEO, +8*
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