Digital Lifescapes

Video games had been the domain of teen males in the past, but this is no longer the case. Two distinct developments have changed the player demographic of online games. First, the development of social networking sites, such as Facebook. Second, the increasing prevalence of mobile smartphones. In the past, within the U.S. market you had to pay $30 to $50 for a game -- or $20 per month for a subscription -- but now you can play them for free, thanks to the rise of the virtual goods revenue model. This transition has driven the number of social networking and online worlds (SNOW) accounts beyond 10 billion in 2010 -- with nearly 4.5 billion of those considered active accounts, according to the latest market study by In-Stat . "The virtual goods revenue model is one of several mediums that SNOWs use to generate revenue," says Vahid Dejwakh, Industry Analyst at In-Stat. The basic premise is to allow everyone to create an account and play for free and then offer users the...

The development and ongoing adoption of social networking sites and the increasing use of feature-rich mobile smartphones have recently brought online gaming to the mainstream consumer market. The rise of the virtual goods revenue model, which allows people to play for free and later pay for individual items within the online game or virtual world, has also contributed to explosive revenue growth of this market. In-Stat now forecasts that by the end of 2010, over $7 billion will have been spent on virtual goods. "Traditionally computer games have been the realm of teenage boys. However, social networking and pervasive smartphones are driving gaming beyond this core base," says Vahid Dejwakh, Industry Analyst at In-Stat. Before, the gamer had to go and specifically find games he or she wanted to play, but now games are delivered via your social networking profile and your mobile phone. In-Stat's latest market study findings include: - The top 10 virtual goods ...

According to the latest market study by Engage Digital Media , an amazing $1.38 billion was invested in 87 virtual goods-related companies. The amount invested in 2009 represents more than three times the investment in the virtual goods space in 2008 -- when $408 million was invested. The total number of companies receiving investment money also increased year-over-year -- 87 in 2009 compared with 34 in 2008, an increase of more than 100 percent. Of the $1.38 billion invested for the year, $398.3 million is acquisition related. "Virtual goods was the hot story of 2009, driving investment that crossed over into game development, virtual currency, payment services, and social networks," said Christopher Sherman, CEO of Engage Digital Media. In the fourth quarter alone, companies raised an astounding $944 million -- more than double the amount raised in all four quarters of 2008. Also noteworthy was the number of acquisitions in the space -- 18 of the course of the year -- with ...