Virtual Goods at SXSW: Hi5 Launching Currency API, OutSpark Reports $50 ARPU

Today the multimedia conference South by Southwest (SXSW) held its Virtual Goods panel, featuring several representatives from major business operating in the virtual goods space. VGN wasn't able to attend the panel directly, but instead followed the proceedings through the panel's official Twitter feed at #sxswvg. The panelists were Susan Wu of ohai, Kevin Dasch of IMVU, Andrew Sheppard of Hi5, and Susan Choe of OutSpark. Two major new announcements to come out of the panel concerned Hi5's new universe currency API and OutSpark's $50 monthly ARPU.

Sheppard discussed the new Hi5 Coins virtual currency, launched in December 2008, and announced that the company was making a Hi5 Coins API available to developers of apps for the Hi5 platform. This move essentially makes Hi5 Coins a universal currency that can be adopted by any app operating on the Hi5 platform. Hi5 Coins were intended initially for use with the Hi5 Gifts feature, but have since expanded beyond into Hi5 Games and can in the future appear as part of third-party Hi5 apps. Universal currency is not a feature that leading social networks Facebook and MySpace offer and could turn into a competitive advantage for Hi5 in the future.

Choe made waves by announcing that OutSpark had achieved $50 average revenue per user (ARPU) monthly through virtual goods sales. Usual reported ARPUs for free-to-play portals like OutSpark are in the $.50 to $1.50 range, so it is speculated that Choe may have actually meant $50 ARPU per active user monthly. this would be an extraordinarily tremendous success if true. It has also been speculated that Choe misspoke and actually meant $50 ARPPU (average revenue per paying user), as Choe compared her figure to a $20 to $30 industry average that makes more sense for ARPPU than ARPU.

That said, even $50 ARPPU or $50 ARPU monthly for active users only would be a very high figure by industry standards and a sign of major virtual goods sucess for OutSpark. At the panel, Choe credited OutSpark's high monthly sales to careful optimization of virtual goods selections across categories. Choe also stated that 100% of OutSpark's virtual good sales happened through use of pre-paid cards, with 97% of those pre-paid card points being spent in the first day after a user obtains them.

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