The Virtual Buying Boom

GET IN THE GAME THE VIRTUAL BUYING BOOM Social games on Facebook, on other social networks, and in mobile apps are changing the image of the gamer in America. What's more, the rise of these social games has given way to a boom in the buying of in-game virtual goods. We take a look at how we're spending and what it means for marketers. SOCIAL GAME TAKEOVER THE GAMING POPULATION DRIVING THE TREND ....**********...... ************.............* Traditional single and multi-player online games are transforming into a new scene of gaming. Social games – like Farmville or other games on social networks – are growing the gaming population. .............................................. U.S. SOCIAL GAMERS 2010 24% 2011 27% GAME DEVELOPERS 2012 SOCIAL NETWORK PROVIDERS 29% 20% 30% * Percent of all Internet Users VIRTUAL WORLDS THE VIRTUAL MARKETPLACE VIRTUAL GOODS LAND-GRAB BATTLE OF THE SEXES .......****.. *********..** Total sales from virtual goods are expected to surpass $2.1 billion in 2011, up from $1.6 billion in 2010. Social games present a booming portion of the market. ******..... ........................... In a unique stereotype reversal, men seem to spend more than women in social games. Research shows that men and male-dominated titles drive more revenue for game developers. MEN WOMEN 21 19 2010 GAMING TIME ************* PER DAY $510 M MINUTES MINUTES 2011 69 +28% $653 M WHO BUYS 31% VIRTUAL GOODS 2012 +23% $792 M SPENDING RATIO 1 IN-APP SPENDING SPREE Smartphones users are a critical part of in-game buying of virtual goods. Game developers are now earning significant revenue from in-game buying compared to the initial mobile app purchase. MOBILE GAMING MOBILE IN-GAME SPENDING FREEL FREE! 45% of all U.S. FREEL $41 olo 45 smartphone users play mobile games 16% spend an average of $41 annually on in-game virtual goods L FREE! FREE! FREE! FREE! FREE! FREE! FREEL Smartphone gamers download an average of 14 games per year. Of these games, typically 4 are paid, 10 are free. 56% are interested in 56 buying virtual goods in the next 12 months HOW MARKETERS GET IN THE GAME SHIFT FROM TRADITIONAL ADVERTISING Gamers love buying virtual goods, especially branded items. Advertisers have had to shift their strategies to insert their brands into games in creative ways VIRTUAL GOODS VS. ADVERTISING ARPU (AVERAGE REVENUE PER USER) O Virtual Goods APRU O Advertising APRU $8.00 $7.80 $7.00 ..... ....... ... $6.00 $5.00 $4.00 ....... $3.00 $2.00 $1.50 $1.20 $1.00 $.30 SEPT OCT NOV DEC JAN FEB MAR 2009 APR MAY JUN JUL AUG SEPT -2010 VIRTUAL GOODS DRIVE BRAND AWARENESS With so many people buying virtual goods, marketers are now eyeing branded virtual items. The presence of branded virtual goods has now been shown to increase brand awareness and purchase intent. I Control Group I Group Exposed to Branded Virtual Items AIDED AWARENESS 25% 70% MOBILE AWARENESS 14% 74% PURCHASE INTENT 31% 63% 10% 20% 30% 40% 50% 60% 70% 80% Sources: eMarketer, Moccospace, Inside Network, Frank N. Magid Associates BuySellAds. GET IN THE GAME THE VIRTUAL BUYING BOOM Social games on Facebook, on other social networks, and in mobile apps are changing the image of the gamer in America. What's more, the rise of these social games has given way to a boom in the buying of in-game virtual goods. We take a look at how we're spending and what it means for marketers. SOCIAL GAME TAKEOVER THE GAMING POPULATION DRIVING THE TREND ....**********...... ************.............* Traditional single and multi-player online games are transforming into a new scene of gaming. Social games – like Farmville or other games on social networks – are growing the gaming population. .............................................. U.S. SOCIAL GAMERS 2010 24% 2011 27% GAME DEVELOPERS 2012 SOCIAL NETWORK PROVIDERS 29% 20% 30% * Percent of all Internet Users VIRTUAL WORLDS THE VIRTUAL MARKETPLACE VIRTUAL GOODS LAND-GRAB BATTLE OF THE SEXES .......****.. *********..** Total sales from virtual goods are expected to surpass $2.1 billion in 2011, up from $1.6 billion in 2010. Social games present a booming portion of the market. ........................... In a unique stereotype reversal, men seem to spend more than women in social games. Research shows that men and male-dominated titles drive more revenue for game developers. MEN WOMEN 21 19 2010 GAMING TIME ************* PER DAY $510 M MINUTES MINUTES 2011 69 +28% $653 M WHO BUYS % VIRTUAL GOODS 31% 2012 +23% $792 M 1 SPENDING RATIO IN-APP SPENDING SPREE Smartphones users are a critical part of in-game buying of virtual goods. Game developers are now earning significant revenue from in-game buying compared to the initial mobile app purchase. MOBILE GAMING MOBILE IN-GAME SPENDING $ $ $ $ FREEL FREE! 45% of all U.S. FREEL $41 olo 45 smartphone users play mobile games 16% spend an average of $41 annually on in-game virtual goods L FREE! FREE! FREE! FREE! FREE! FREE! FREEL Smartphone gamers download an average of 14 games per year. Of these games, typically 4 are paid, 10 are free. 56% are interested in 56 buying virtual goods in the next 12 months HOW MARKETERS GET IN THE GAME SHIFT FROM TRADITIONAL ADVERTISING Gamers love buying virtual goods, especially branded items. Advertisers have had to shift their strategies to insert their brands into games in creative ways VIRTUAL GOODS VS. ADVERTISING ARPU (AVERAGE REVENUE PER USER) O Virtual Goods APRU O Advertising APRU $8.00 $7.80 $7.00 ..... ....... ... $6.00 $5.00 $4.00 ....... $3.00 $2.00 $1.50 $1.00 $1.20 $.30 SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN 2009 JUL AUG SEPT -2010 VIRTUAL GOODS DRIVE BRAND AWARENESS With so many people buying virtual goods, marketers are now eyeing branded virtual items. The presence of branded virtual goods has now been shown to increase brand awareness and purchase intent. I Control Group I Group Exposed to Branded Virtual Items AIDED AWARENESS 25% 70% MOBILE AWARENESS 14% 74% PURCHASE INTENT 31% 63% 10% 20% 30% 40% 50% 60% 70% 80% Sources: eMarketer, Moccospace, Inside Network, Frank N. Magid Associates BuySellAds. GET IN THE GAME THE VIRTUAL BUYING BOOM Social games on Facebook, on other social networks, and in mobile apps are changing the image of the gamer in America. What's more, the rise of these social games has given way to a boom in the buying of in-game virtual goods. We take a look at how we're spending and what it means for marketers. SOCIAL GAME TAKEOVER THE GAMING POPULATION DRIVING THE TREND ....**********...... ************.............* Traditional single and multi-player online games are transforming into a new scene of gaming. Social games – like Farmville or other games on social networks – are growing the gaming population. .............................................. U.S. SOCIAL GAMERS 2010 24% 2011 27% GAME DEVELOPERS 2012 SOCIAL NETWORK PROVIDERS 29% 20% 30% * Percent of all Internet Users VIRTUAL WORLDS THE VIRTUAL MARKETPLACE VIRTUAL GOODS LAND-GRAB BATTLE OF THE SEXES .......****.. *********..** Total sales from virtual goods are expected to surpass $2.1 billion in 2011, up from $1.6 billion in 2010. Social games present a booming portion of the market. ........................... In a unique stereotype reversal, men seem to spend more than women in social games. Research shows that men and male-dominated titles drive more revenue for game developers. MEN WOMEN 21 19 2010 GAMING TIME ************* PER DAY $510 M MINUTES MINUTES 2011 69 +28% $653 M WHO BUYS % VIRTUAL GOODS 31% 2012 +23% $792 M 1 SPENDING RATIO IN-APP SPENDING SPREE Smartphones users are a critical part of in-game buying of virtual goods. Game developers are now earning significant revenue from in-game buying compared to the initial mobile app purchase. MOBILE GAMING MOBILE IN-GAME SPENDING $ $ $ $ FREEL FREE! 45% of all U.S. FREEL $41 olo 45 smartphone users play mobile games 16% spend an average of $41 annually on in-game virtual goods L FREE! FREE! FREE! FREE! FREE! FREE! FREEL Smartphone gamers download an average of 14 games per year. Of these games, typically 4 are paid, 10 are free. 56% are interested in 56 buying virtual goods in the next 12 months HOW MARKETERS GET IN THE GAME SHIFT FROM TRADITIONAL ADVERTISING Gamers love buying virtual goods, especially branded items. Advertisers have had to shift their strategies to insert their brands into games in creative ways VIRTUAL GOODS VS. ADVERTISING ARPU (AVERAGE REVENUE PER USER) O Virtual Goods APRU O Advertising APRU $8.00 $7.80 $7.00 ..... ....... ... $6.00 $5.00 $4.00 ....... $3.00 $2.00 $1.50 $1.00 $1.20 $.30 SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN 2009 JUL AUG SEPT -2010 VIRTUAL GOODS DRIVE BRAND AWARENESS With so many people buying virtual goods, marketers are now eyeing branded virtual items. The presence of branded virtual goods has now been shown to increase brand awareness and purchase intent. I Control Group I Group Exposed to Branded Virtual Items AIDED AWARENESS 25% 70% MOBILE AWARENESS 14% 74% PURCHASE INTENT 31% 63% 10% 20% 30% 40% 50% 60% 70% 80% Sources: eMarketer, Moccospace, Inside Network, Frank N. Magid Associates BuySellAds. GET IN THE GAME THE VIRTUAL BUYING BOOM Social games on Facebook, on other social networks, and in mobile apps are changing the image of the gamer in America. What's more, the rise of these social games has given way to a boom in the buying of in-game virtual goods. We take a look at how we're spending and what it means for marketers. SOCIAL GAME TAKEOVER THE GAMING POPULATION DRIVING THE TREND ....**********...... ************.............* Traditional single and multi-player online games are transforming into a new scene of gaming. Social games – like Farmville or other games on social networks – are growing the gaming population. .............................................. U.S. SOCIAL GAMERS 2010 24% 2011 27% GAME DEVELOPERS 2012 SOCIAL NETWORK PROVIDERS 29% 20% 30% * Percent of all Internet Users VIRTUAL WORLDS THE VIRTUAL MARKETPLACE VIRTUAL GOODS LAND-GRAB BATTLE OF THE SEXES .......****.. *********..** Total sales from virtual goods are expected to surpass $2.1 billion in 2011, up from $1.6 billion in 2010. Social games present a booming portion of the market. ........................... In a unique stereotype reversal, men seem to spend more than women in social games. Research shows that men and male-dominated titles drive more revenue for game developers. MEN WOMEN 21 19 2010 GAMING TIME ************* PER DAY $510 M MINUTES MINUTES 2011 69 +28% $653 M WHO BUYS % VIRTUAL GOODS 31% 2012 +23% $792 M 1 SPENDING RATIO IN-APP SPENDING SPREE Smartphones users are a critical part of in-game buying of virtual goods. Game developers are now earning significant revenue from in-game buying compared to the initial mobile app purchase. MOBILE GAMING MOBILE IN-GAME SPENDING $ $ $ $ FREEL FREE! 45% of all U.S. FREEL $41 olo 45 smartphone users play mobile games 16% spend an average of $41 annually on in-game virtual goods L FREE! FREE! FREE! FREE! FREE! FREE! FREEL Smartphone gamers download an average of 14 games per year. Of these games, typically 4 are paid, 10 are free. 56% are interested in 56 buying virtual goods in the next 12 months HOW MARKETERS GET IN THE GAME SHIFT FROM TRADITIONAL ADVERTISING Gamers love buying virtual goods, especially branded items. Advertisers have had to shift their strategies to insert their brands into games in creative ways VIRTUAL GOODS VS. ADVERTISING ARPU (AVERAGE REVENUE PER USER) O Virtual Goods APRU O Advertising APRU $8.00 $7.80 $7.00 ..... ....... ... $6.00 $5.00 $4.00 ....... $3.00 $2.00 $1.50 $1.00 $1.20 $.30 SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN 2009 JUL AUG SEPT -2010 VIRTUAL GOODS DRIVE BRAND AWARENESS With so many people buying virtual goods, marketers are now eyeing branded virtual items. The presence of branded virtual goods has now been shown to increase brand awareness and purchase intent. I Control Group I Group Exposed to Branded Virtual Items AIDED AWARENESS 25% 70% MOBILE AWARENESS 14% 74% PURCHASE INTENT 31% 63% 10% 20% 30% 40% 50% 60% 70% 80% Sources: eMarketer, Moccospace, Inside Network, Frank N. Magid Associates BuySellAds. GET IN THE GAME THE VIRTUAL BUYING BOOM Social games on Facebook, on other social networks, and in mobile apps are changing the image of the gamer in America. What's more, the rise of these social games has given way to a boom in the buying of in-game virtual goods. We take a look at how we're spending and what it means for marketers. SOCIAL GAME TAKEOVER THE GAMING POPULATION DRIVING THE TREND ....**********...... ************.............* Traditional single and multi-player online games are transforming into a new scene of gaming. Social games – like Farmville or other games on social networks – are growing the gaming population. .............................................. U.S. SOCIAL GAMERS 2010 24% 2011 27% GAME DEVELOPERS 2012 SOCIAL NETWORK PROVIDERS 29% 20% 30% * Percent of all Internet Users VIRTUAL WORLDS THE VIRTUAL MARKETPLACE VIRTUAL GOODS LAND-GRAB BATTLE OF THE SEXES .......****.. *********..** Total sales from virtual goods are expected to surpass $2.1 billion in 2011, up from $1.6 billion in 2010. Social games present a booming portion of the market. ........................... In a unique stereotype reversal, men seem to spend more than women in social games. Research shows that men and male-dominated titles drive more revenue for game developers. MEN WOMEN 21 19 2010 GAMING TIME ************* PER DAY $510 M MINUTES MINUTES 2011 69 +28% $653 M WHO BUYS % VIRTUAL GOODS 31% 2012 +23% $792 M 1 SPENDING RATIO IN-APP SPENDING SPREE Smartphones users are a critical part of in-game buying of virtual goods. Game developers are now earning significant revenue from in-game buying compared to the initial mobile app purchase. MOBILE GAMING MOBILE IN-GAME SPENDING $ $ $ $ FREEL FREE! 45% of all U.S. FREEL $41 olo 45 smartphone users play mobile games 16% spend an average of $41 annually on in-game virtual goods L FREE! FREE! FREE! FREE! FREE! FREE! FREEL Smartphone gamers download an average of 14 games per year. Of these games, typically 4 are paid, 10 are free. 56% are interested in 56 buying virtual goods in the next 12 months HOW MARKETERS GET IN THE GAME SHIFT FROM TRADITIONAL ADVERTISING Gamers love buying virtual goods, especially branded items. Advertisers have had to shift their strategies to insert their brands into games in creative ways VIRTUAL GOODS VS. ADVERTISING ARPU (AVERAGE REVENUE PER USER) O Virtual Goods APRU O Advertising APRU $8.00 $7.80 $7.00 ..... ....... ... $6.00 $5.00 $4.00 ....... $3.00 $2.00 $1.50 $1.00 $1.20 $.30 SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN 2009 JUL AUG SEPT -2010 VIRTUAL GOODS DRIVE BRAND AWARENESS With so many people buying virtual goods, marketers are now eyeing branded virtual items. The presence of branded virtual goods has now been shown to increase brand awareness and purchase intent. I Control Group I Group Exposed to Branded Virtual Items AIDED AWARENESS 25% 70% MOBILE AWARENESS 14% 74% PURCHASE INTENT 31% 63% 10% 20% 30% 40% 50% 60% 70% 80% Sources: eMarketer, Moccospace, Inside Network, Frank N. Magid Associates BuySellAds. GET IN THE GAME THE VIRTUAL BUYING BOOM Social games on Facebook, on other social networks, and in mobile apps are changing the image of the gamer in America. What's more, the rise of these social games has given way to a boom in the buying of in-game virtual goods. We take a look at how we're spending and what it means for marketers. SOCIAL GAME TAKEOVER THE GAMING POPULATION DRIVING THE TREND ....**********...... ************.............* Traditional single and multi-player online games are transforming into a new scene of gaming. Social games – like Farmville or other games on social networks – are growing the gaming population. .............................................. U.S. SOCIAL GAMERS 2010 24% 2011 27% GAME DEVELOPERS 2012 SOCIAL NETWORK PROVIDERS 29% 20% 30% * Percent of all Internet Users VIRTUAL WORLDS THE VIRTUAL MARKETPLACE VIRTUAL GOODS LAND-GRAB BATTLE OF THE SEXES .......****.. *********..** Total sales from virtual goods are expected to surpass $2.1 billion in 2011, up from $1.6 billion in 2010. Social games present a booming portion of the market. ........................... In a unique stereotype reversal, men seem to spend more than women in social games. Research shows that men and male-dominated titles drive more revenue for game developers. MEN WOMEN 21 19 2010 GAMING TIME ************* PER DAY $510 M MINUTES MINUTES 2011 69 +28% $653 M WHO BUYS % VIRTUAL GOODS 31% 2012 +23% $792 M 1 SPENDING RATIO IN-APP SPENDING SPREE Smartphones users are a critical part of in-game buying of virtual goods. Game developers are now earning significant revenue from in-game buying compared to the initial mobile app purchase. MOBILE GAMING MOBILE IN-GAME SPENDING $ $ $ $ FREEL FREE! 45% of all U.S. FREEL $41 olo 45 smartphone users play mobile games 16% spend an average of $41 annually on in-game virtual goods L FREE! FREE! FREE! FREE! FREE! FREE! FREEL Smartphone gamers download an average of 14 games per year. Of these games, typically 4 are paid, 10 are free. 56% are interested in 56 buying virtual goods in the next 12 months HOW MARKETERS GET IN THE GAME SHIFT FROM TRADITIONAL ADVERTISING Gamers love buying virtual goods, especially branded items. Advertisers have had to shift their strategies to insert their brands into games in creative ways VIRTUAL GOODS VS. ADVERTISING ARPU (AVERAGE REVENUE PER USER) O Virtual Goods APRU O Advertising APRU $8.00 $7.80 $7.00 ..... ....... ... $6.00 $5.00 $4.00 ....... $3.00 $2.00 $1.50 $1.00 $1.20 $.30 SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN 2009 JUL AUG SEPT -2010 VIRTUAL GOODS DRIVE BRAND AWARENESS With so many people buying virtual goods, marketers are now eyeing branded virtual items. The presence of branded virtual goods has now been shown to increase brand awareness and purchase intent. I Control Group I Group Exposed to Branded Virtual Items AIDED AWARENESS 25% 70% MOBILE AWARENESS 14% 74% PURCHASE INTENT 31% 63% 10% 20% 30% 40% 50% 60% 70% 80% Sources: eMarketer, Moccospace, Inside Network, Frank N. Magid Associates BuySellAds. GET IN THE GAME THE VIRTUAL BUYING BOOM Social games on Facebook, on other social networks, and in mobile apps are changing the image of the gamer in America. What's more, the rise of these social games has given way to a boom in the buying of in-game virtual goods. We take a look at how we're spending and what it means for marketers. SOCIAL GAME TAKEOVER THE GAMING POPULATION DRIVING THE TREND ....**********...... ************.............* Traditional single and multi-player online games are transforming into a new scene of gaming. Social games – like Farmville or other games on social networks – are growing the gaming population. .............................................. U.S. SOCIAL GAMERS 2010 24% 2011 27% GAME DEVELOPERS 2012 SOCIAL NETWORK PROVIDERS 29% 20% 30% * Percent of all Internet Users VIRTUAL WORLDS THE VIRTUAL MARKETPLACE VIRTUAL GOODS LAND-GRAB BATTLE OF THE SEXES .......****.. *********..** Total sales from virtual goods are expected to surpass $2.1 billion in 2011, up from $1.6 billion in 2010. Social games present a booming portion of the market. ........................... In a unique stereotype reversal, men seem to spend more than women in social games. Research shows that men and male-dominated titles drive more revenue for game developers. MEN WOMEN 21 19 2010 GAMING TIME ************* PER DAY $510 M MINUTES MINUTES 2011 69 +28% $653 M WHO BUYS % VIRTUAL GOODS 31% 2012 +23% $792 M 1 SPENDING RATIO IN-APP SPENDING SPREE Smartphones users are a critical part of in-game buying of virtual goods. Game developers are now earning significant revenue from in-game buying compared to the initial mobile app purchase. MOBILE GAMING MOBILE IN-GAME SPENDING $ $ $ $ FREEL FREE! 45% of all U.S. FREEL $41 olo 45 smartphone users play mobile games 16% spend an average of $41 annually on in-game virtual goods L FREE! FREE! FREE! FREE! FREE! FREE! FREEL Smartphone gamers download an average of 14 games per year. Of these games, typically 4 are paid, 10 are free. 56% are interested in 56 buying virtual goods in the next 12 months HOW MARKETERS GET IN THE GAME SHIFT FROM TRADITIONAL ADVERTISING Gamers love buying virtual goods, especially branded items. Advertisers have had to shift their strategies to insert their brands into games in creative ways VIRTUAL GOODS VS. ADVERTISING ARPU (AVERAGE REVENUE PER USER) O Virtual Goods APRU O Advertising APRU $8.00 $7.80 $7.00 ..... ....... ... $6.00 $5.00 $4.00 ....... $3.00 $2.00 $1.50 $1.00 $1.20 $.30 SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN 2009 JUL AUG SEPT -2010 VIRTUAL GOODS DRIVE BRAND AWARENESS With so many people buying virtual goods, marketers are now eyeing branded virtual items. The presence of branded virtual goods has now been shown to increase brand awareness and purchase intent. I Control Group I Group Exposed to Branded Virtual Items AIDED AWARENESS 25% 70% MOBILE AWARENESS 14% 74% PURCHASE INTENT 31% 63% 10% 20% 30% 40% 50% 60% 70% 80% Sources: eMarketer, Moccospace, Inside Network, Frank N. Magid Associates BuySellAds.