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November 01, 2011

Global Market for Virtual Goods to Gain Momentum

Juniper Research published a new report that analyzes the mobile social media and examines how user behavior determines changes in subscriptions games and dating. It revealed that the global market for virtual goods bought from mobile social media was expected to increase and touch $4.6 billion by 2016.

Findings revealed that almost half of total mobile social media advertising spend by 2016 would be targeted at tablets. The Far East and China will lead in mobile social media revenues with North America following.

Analysts at Juniper Research said that social gaming appeared to be largely driven by a sharp increase in smartphone adoption and the sales of virtual goods via social media services was catching on fast in Japan and China.

With the concept of virtual goods gaining recognition and tablet usage increasing in popularity, the report stated that sales of virtual goods was bound to gain momentum because tablets offer a better user experience.

However, according to the report, mobile social media services have a serious monetization problem. The stranglehold that app stores have on payments could be a hindrance for virtual goods sold from within their app as almost 30 percent of payment value would have to be surrendered to the app store.

The situation is no better when virtual goods are sold via social gaming. Third-party developers receive around 70 percent of in-game spend and the App stores require that developers surrender 30 percent in-game purchase revenue.

Report author Charlotte Miller spoke of future prospects for virtual goods and said, “Virtual goods is one solution that has worked well in Japan and China, where consumers already have an enormous appetite for content such as clothing for avatars. The only question is: can they successfully avoid the app stores taking a slice of virtual goods revenues?”

In another news story, Juniper Research forecasts that the gross merchandise transaction value of mobile payments for physical goods will exceed $170 billion worldwide by 2015. This is nearly triple the $60 billion forecast for 2011.


Mini Swamy is a contributing editor for MobilityTechzone. To read more of her articles, please visit her columnist page.

Edited by Carrie Schmelkin


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