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Thanks to apps, virtual goods ramp up 80 percent more revenue
By siliconindia
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Tuesday, 19 October 2010, 20:16 IST
Bangalore: Even when apps on Smartphones are free they are capable of generating revenue. New researches show that in some instances the sale of virtual goods is overtaking advertising. Now the social networking and social gaming applications, together has got around 2.2 million daily active users. In 2010, revenue increasingly shifts from advertising to virtual goods sales until reaching a proportion of more than 80 percent from virtual goods.
The biggest rage and the most popular application on Facebook, it is the magic pill which has set Zynga on track to pocket close to $835 million this year. Farmville has more than 60 million regular users. Farmville and Mafia Wars are the latest success stories on the internet and they make money by selling virtual goods online; these goods help users move forward in the games.
And thanks to iPhones, HTCs, Androids and the lot, users are now increasingly connected to these platforms, leading to a gradual fusion between their real and virtual lives.
An IIM student wrote in one of his article that now purchasing flowers for your girl or placing an online order have become obsolete; send her virtual flowers instead. People are now willing to pay real money for a bunch of 0s and 1s. And it has got them hooked like never before.
A recent flurry study reports that as social games continue to expand their consumer reach, demonstrating their ability to attract an audience beyond teenagers using iPod touches, their relevance will increase. In fact, with mobile social game critical mass now rivaling TV prime time viewership, Flurry anticipates a stronger ad revenue generation through mobile social networking and games in 2011. Over the next 18 to 24 months, Flurry predicts strong revenue growth from both virtual goods and advertising revenue from social gaming.
