Parks Associates Blog

Tuesday, November 09, 2010

Nearly one-fifth of active gamers in the U.S. spend money on virtual items

The gaming business is undergoing a major shift away from subscription models as virtual items become a larger part of its economy, reaching almost $6 billion worldwide in microtransaction revenues by 2015, according to international research firm Parks Associates.

Gamers are investing real money in virtual items in Farmville, World of Warcraft, and other online games, to the point they are filing lawsuits to establish ‘ownership’ of these virtual goods. The enormous player base, availability on multiple devices, and the introduction of instruments such as Facebook Credits contribute to growing revenues.

The Parks Associates’ new report Online Gaming: Global Outlook finds 19% of active gamers in the U.S. spend money on in-game virtual items. In contrast, subscribers to premium online game services decreased from 35% in 2008 to 28% in 2010. Publishers of social games, like Zynga, have seen revenues explode as larger percentages of their customers opt to pay for virtual items. The same trend is visible for massively multiplayer online games, where companies such as Nexon America have managed to reach millions of dollars in revenues from microtransactions.

It is becoming increasingly difficult to justify subscription fees. Thanks to social games and free-to-play MMOs, both casual and hardcore players have the option of playing quality games online for free. The virtual-items model that has proven so successful in Asia is finally generating significant revenues in North America.

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