I got to thinking recently about a case in Shanghai back in 2005. The friendship between two Internet gaming enthusiasts went horribly south after one “stole” the other’s virtual sword. Qiu Chengwei went to Zhu Caoyuan’s house after the latter sold the virtual weapon for 7200 yuan (about $1083)–and fatally stabbed him in the chest. The convicted man was ultimately given a suspended death sentence.
The case is an extreme example of just how much people value their virtual goods– worth remembering in light of last week’s report from Flurry saying that in 2010, iOS app revenue will shift from advertising to virtual goods sales, the latter of which will make up more than 80% of revenue. Once the Google Android market allows in-app sales, it’s a good bet that Android apps will see the same shift.
Why? The growth of smart phones in comparison to the overall cell phone market, the shift of online activities to the mobile platform, and the popularity of virtual goods within these activities.
Consider gaming, as noted in a report released last June from the market research firm Frank N. Magid Associates and the mobile social gaming network OpenFeint. It found that Americans spent an estimated $168 million on mobile virtual goods in the preceding year. Of U.S. phone consumers, 23 percent owned smart phones; 45 percent of smart phone owners played mobile games; 16 percent of those smart phone gamers spent about $41 per year on in-game virtual goods; and 55 percent of smartphone gamers indicated an interest in purchasing virtual goods.
Also note the growth of virtual goods sales in social networks, the land of casual games–and which are increasingly being accessed by users on their mobiles rather than their PCs. Inside Network reported last month that the U.S. market for virtual goods will grow to $2.1 billion in 2011; and that Zynga, the largest maker of games on Facebook, will record revenue of up to $500 million in 2010.
Will someone soon kill a friend for stealing his virtual pinata or her stash of virtual cupcakes? Maybe not. But the person would get really really angry, considering how much money was spent on the virtual stuff.