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MMO Virtual Goods Market to Reach $1 Billion in 2009

by Rainier on Oct. 14, 2009 @ 9:39 a.m. PDT

A new report released today by Inside Network's Justin Smith and Serious Business's Charles Hudson concludes that the total United States market size for virtual goods will reach $1 billion in 2009.

"While virtual goods have been driving revenues in Asia and Europe for years, 2009 will be remembered as the year virtual goods-based businesses began to scale in the United States," Justin Smith, editor of Inside Network's and, says.

"Virtual goods may be bringing the largest disruption entertainment, communication, and e-commerce infrastructure companies have seen for a long time," Charles Hudson, VP of Business Development at Serious Business, and host of the 3rd annual Virtual Goods Summit later this month, adds.

Inside Virtual Goods is a new report designed specifically for entrepreneurs, investors, and analysts interested in the growth of this exciting new category of online commerce that is fueling the growth of games as a service businesses.

The report is focused on the following areas:

  1. Social Networks, Applications, and Games - The explosion of the virtual goods market on social networks is in our view one of the biggest stories of 2009. The report delves deeply into the trends, stats, key players, opportunities, and challenges facing the space this year and next.
  2. Casual MMOs and Virtual Worlds - Virtual worlds and casual MMOs continue to grow as a meaningful share of the virtual goods opportunity in the United States. The study breaks down the key drivers for success in this segment, trends in monetization and engagement, and the prospects for the future.
  3. Hardcore MMOs and Free-to-Play Online Games - Developers in the MMO/MMORPG space have been among the earliest adopters of the free-to-play model. The report explores why free-to-play MMOs are succeeding, revenue and user trends, and the key issues facing this space as we head into 2010.
  4. Emerging Areas: Consoles, iPhone, and Subscription MMOs - As the virtual goods business model becomes more well understood, it is beginning to show up in new and interesting areas of the games and entertainment landscape. The report highlights a few of the more promising areas where virtual goods are emerging as a promising opportunity.

In addition, prior to delving more deeply into each market segment, the report provides an overview of the emerging payments ecosystem that is growing to serve these new businesses. Traditional e-commerce infrastructure providers only offer a partial solution, and the virtual goods payments layer is currently in a major state of flux. In the report, Smith and Hudson describe the variety of solutions that have been brought to market to date, and the key challenges facing the industry from a payments perspective as a whole.

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