DFC Intelligence and Live Gamer Announce Broad Study On State of Virtual Goods Adoption Among Consumers
March 29, 2010
Results Indicate Core Gamers in North America and Europe are Flocking to Virtual Items
SAN DIEGO â€“ March 29, 2010, Research firm DFC Intelligence and Live Gamer, the global leader of total commerce solutions for online game publishers, social networks and digital entertainment companies, today announced a new report indicating that gamers in Europe and North America are now largely comfortable with buying digital content. According to the report, titled â€œConsumer Trends in Virtual Goods and Downloadable Gaming in North America and Europe,â€ gamers are rapidly adopting the virtual item model where they purchase individual digital components such as virtual currency, items or characters.
The survey was conducted in January and February 2010 among nearly 5,000 gamers in North America and Europe. In addition, DFC Intelligence analyzed over seven years of historical Live Gamer micro-transaction data from multiple countries including South Korea, U.S., Japan, Germany, Vietnam and the Philippines.
The virtual item model has been a major driver of market growth in Asia, and has only recently been introduced to the mass market in Europe and North America, which was highly popularized through the growth of social networks. Recent games like Farmville from Zynga, Free Realms from Sony Online Entertainment and Combat Arms from Nexon have been able to attract millions of users while monetizing through virtual goods. According to the survey, 88 percent of respondents said they had purchased some form of digital content (including music, movies and games), while 60 percent of those responding indicated they had purchased an in-game good that was not a full game.
â€œIn most cases, the digital items are offered in free-to-play (F2P) products, which are low risk for the consumer,” said DFC analyst David Cole. “By offering free play, these games can attract millions of users, many of which are now choosing to pay for virtual items to enhance the experience. In looking at the historical track record it is clear that a major advantage of a virtual item model is a single product can have a lifespan of years online as opposed to a few months on the retail shelf.â€
Many of the products that use a virtual item model fall into a category DFC Intelligence calls MMOG Lite. MMOG Lite products often allow for persistent worlds and character building, but without the high monthly fees associated with large commercial massively multiplayer online games (MMOGs). In North America and Europe, DFC forecasts that the MMOG Lite market will grow from about $800 million in 2009 to over $3 billion by 2015.
“Korea still has the highest current revenue and longest history of all the markets we studied. However, when looking at seven years of actual historical transactional data, it is clear markets like Germany, Japan and the U.S. are not only trending towards Korea, but doing so at a significantly higher spend per transaction,” said Cole.
However, a virtual item model is not limited to any one game genre. “Music titles, shooters, sports games and pretty much any type of game will be able to benefit from growing consumer acceptance of digital items,” said DFC analyst Jeremy Miller. “Furthermore, the success of social networks like Facebook show the popularity of virtual items can extend far beyond games.”
â€œThis study shows that core gamers are comfortable with the free-to-play model and are increasingly engaging in the purchase of virtual goods,â€ said Andrew Schneider, co-founder and president of Live Gamer, â€œThe findings underscore the market potential as traditional Western game publishers migrate towards microtransactions as the central monetization method.â€
Key findings from the new report were presented at VCON, a full-day event within the Game Developer Conference (GDC), held March 10 at Moscone Center in San Francisco. To view David Coleâ€™s presentation of key findings from the event, visit http://bit.ly/9aFxsg. For the full report, click here. To learn more about Live Gamer, visit www.livegamer.com
About DFC Intelligence
DFC Intelligence is a strategic market research and consulting firm focused on interactive entertainment and the emerging video game, online game, interactive entertainment and portable game markets. Since 1995 DFC has published in-depth strategic market reports and subscription-based research services. DFC research is used by over 300 leading companies in over 30 countries worldwide.
About Live Gamer
Live Gamer provides a total commerce solution for global micro-transaction-based businesses. Spanning online games, digital entertainment, and social networks, Live Gamer provides an advanced offering that goes beyond billing to drive core business metrics and optimize new transaction-based revenue streams. Combining its micro-transaction platform, catalog management, storefronts, merchandising and anti-fraud solutions, scalable publisher support and international payment gateways, Live Gamerâ€™s technology has been adopted by leading publishers in gaming, social and entertainment including CCR, Acclaim, Funcom, NHN USA, Quepasa, Hangout Industries and Sony Online Entertainment, supporting over 80 million users in 23 countries. www.livegamer.com
omonge at dfcint dot com