BBC profiles the huge money predictions for virtual goods market.
Virtual goods such as weapons or digital bottles of champagne traded in the US could be worth up to $5bn in the next five years, experts predict.
![]() Paying real money for products that do not exist is big business
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Virtual goods such as weapons or digital bottles of champagne traded in the US could be worth up to $5bn in the next five years, experts predict.
In Asia, sales are already around the $5bn mark and rapidly growing.
For many, virtual goods are one of the hottest trends in technology and are fuelling huge growth in the social gaming sector.
“This is just an exploding part of the gaming business right now, said venture capitalist Jeremy Liew.
“It is the most exciting area in gaming,” he said.
Mr Liew, whose firm Lightspeed Venture Partners has invested $10m in virtual goods companies, said the rapid growth of the sector was unprecedented.
“We have seen companies go from nothing in the last 18-24 months to tens and hundreds of millions of dollars in revenue.”
Revenue model
Playfish is a social gaming company that started two years ago. Today it has 11 online games and more than 61 million people who play those games worldwide.
![]() Playfish believes virtual goods will continue to lead to more riches
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Crucial to its success is the sale of virtual goods, ranging from furniture for your pet to menu items for your own restaurant in games like Pet Society and Restaurant City.
“Virtual items within the Playfish games are the centre point of the way in which Playfish derives its revenue,” Tom Sarris of the firm told BBC News.
“We have two different revenue models. The primary is the sale of virtual goods and the second is in-game advertising, but that is a very minor aspect at this stage.”
Mr Sarris would not reveal how much Playfish makes from the sale of virtual goods, but admitted that it accounts for the lion’s share of the company’s revenue.
That, according to Mr Liew is fairly typical.
“Virtual goods is the whole story in the world of social games. It accounts for 90-95% of revenue for a lot of these social game developers.”
Speaking of virtual goods Mark Pincus, CEO of Zynga was on Charlie Rose.




