Branded Virtual Goods More Profitable On Social Gaming Sites

By August 19, 2010

The success of virtual goods has enabled innovative business models in the categories of social networking, virtual worlds and free online game sites. This phenomenon was analyzed with its relationship to companies and celebrities

in the "Branded Virtual Goods Market Report" for July 2010 from social gaming platform Viximo and virtual goods platform Virtual Greats. Revenue for branded virtual goods (BVG) is predicted to rise to $318 million by 2015, a stark increase from the current $16 million industry it is this year. While only a subset of the general virutal goods market, BVG is positioned as a more lucrative option for marketers and virtual platform developers.

A case study contained in the report covers the performance of items that were Snoop Dogg-branded. These items have appeared on WeeWorld, where they perform 2.5 times higher than the highest-selling, non-branded, similarly priced items. As quoted in the report, Snoop Dogg explains, "My virutal items are off tha chain jacc! It's a world and a movement that I have been down with since day 1 and we are gonna continue to hit u with hot products and virtual items until tha wheels fall off. Be on da lookout for more items in an internet hood near u - ya dig?!?"

Growth as illustrated in the case study will be driven by super brands into the market, such as Disney's acquisition of Club Penguin. Increased media interest will improve visibility for unconnected audiences, improving adoption. Another trend will be functional virtual goods. These items will need to have some sort of game-enhancing functionalities, or preferred behavior. "For example, Nike partnered with Gaia Online and offered Nike-branded sneakers that not only acted as a status symbol or avatar enhancer, but also enabled the wearer to run faster than other players in the virtual world." As the market matures, these goods must stay relevant by having some effect other than as vanity items.

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