Virtual Goods Wrap-Up For The Week Of May 22

By On May 22, 2009 · Leave a Comment

Welcome to the
Virtual Goods News Wrap-Up for the week of May 22, 2009. The Wrap-Up
is where VGN spotlights stories that we didn't get to cover
individually, but still make for interesting reading about the virtual
goods industry.

'Virtual Currencies' Power Social Networks, Online Games
Hot on the heels of BusinessWeek's big story on the monetization power of virtual currency comes a surprisingly similar piece from CNN. This piece draws a parallel between virtual currencies and the in-game gold of a game like World of Warcraft while also explaining how virtual gifting and goods work to the uninitiated.

App Revenue Is Poised To Surpass Facebook Revenue
Ad Age exposes one of the most interesting Facebook facts in a week of heavy news about the company: third parties on Facebook's platform may be generating more revenue than the company itself. That could mean achieving profitability for Facebook requires little more than figuring out how to get a cut of platform transactions.

Facebook CEO Says IPO A Few Years Out
Rumors have swirled since early spring about the possibility of a Facebook IPO or the company seeking a round of investment capital. Right now, it looks like neither is likely to happen in the immediate future. It puts the new Facebook emphasis on virtual currency in an interesting context.

Facebook Payments: Think Virtual
A useful CNet summary of the evolutionary process that lead to the current testing of Facebook Credits. The article also explores why Facebook is going with a virtual currency system instead of a more traditional online payments system, especially in light of the tremendous revenue being generated by the Facebook platform.

Gambit: Facebook Users Have Deeper Pockets Than Their MySpace Counterparts
Payment service Gambit provides some figures that indicate an interesting statistic may be at play in Facebook's current trend of accelerated growth over rival MySpace. Apparently Facebook users are willing to spend more per average user in games and other platform apps than their MySpace counterparts.

How Is Facebook Going to Monetize The Open Stream API?
An interesting point is raised in this Inside Facebook piece about the possibility of Facebook building virtual currency transactions right into the stream. Any method of microtransaction purchase that keeps users from "leaving" an app tends to generate more sales. Letting Facebook users pay for things from the stream could be huge.

Is Facebook's App Directory The Precursor To An App Store?
Pure but very interesting speculation about the ramifications of one of Facebook's other changes rolled out this week, a new directory of "verified" apps that are essentially recommended to users by Facebook itself. With the Credits system in testing and Apple's App Store generating big money, the prospect of a Facebook App Store equivalent is worth thinking about.

No Recession In WeeWorld: Teen Socializing Drives Virtual Goods Revenues
A Boston-area paper profiles successful virtual world WeeWorld and its virtual goods-oriented business model. The emphasis here is on the challenges and pure gee-whiz factor of designing virtual items that users really want to buy as much as the monetization potential to be found.

Payment Industry Perspectives: Q&A With Paymo CEO Paul McGuire
An interesting profile of Hi5 payments partner Paymo. While most businesses that even think about mobile payments tend to use Zong, Paymo offers competitive features and rates. Mobile payment is still an emerging service in the US, but it's one VGN expects to take off big once the transaction fee issue is somehow addressed.

Virtual Burial Is For Virtual People
The American Conservative takes a very dim view of Jay Goss start-up EternalSpace, which offers virtual burial spaces online that are clearly intended to let online acquaintances as well as distant friends and family participate in the grieving process. The article raises a few interesting points but otherwise seems to be a bit of a knee-jerk reaction.