Stevie Case, a long-time game industry veteran notorious for once defeating the legendary John Carmack at his own game, has recently joined virtual goods solution provider Live Gamer as the Senior Director of Business Development. Specifically, she joins New York-based Live Gamer just months after their recent acquisitions of Korea’s N-Cash virtual currency provider and Palo Alto competitor Twofish. The move seems to be part of Andrew Schneider’s stated goal of developing a “a one-stop shop for virtual goods”. The competition to create the standard virtual currency and virtual goods marketplace across the gaming world has been heating up for months, and we’re now seeing Live Gamer and rival Playspan emerge as the major players.
The virtual world and social gaming virtual goods business has been steadily growing ever since early MMORPGs spawned black markets of item trading, where users would exchange items with each other for real cash, but leave the game-makers out of the transaction. Early players, such as Cyworld, began to develop their own infrastructure for allowing users to engage in small microtransactions for virtual currency, which they could then use to purchase virtual goods or trade with other users. The practice proved successful, bringing in $250 million per year for the company, and changing the worldwide social gaming landscape. While tight-lipped, early reports put recent social gaming companies Zynga, Playfish and Playdom earning 60% of their total revenues come from Virtual Goods transactions (33% from offers, 33% from direct purchases, 33% from advertising).
Recently, with the growing popularity of social games like Mafia Wars, Pet Society and Farmville, the potential to apply this model to Facebook users has meant a growing influx of investment into virtual goods businesses. In 2009, virtual-goods based businesses had investments of over $1.38 billion, with $398.3 million being acquisition related. If the trends continue as seen, we can expect larger revenue bases for the virtual goods industry in 2010.
Image found via Slobs of Gaming.