Los Angeles Games Conference - Money For Nothing? How To Succeed In Selling Virtual Goods for Games and Social Networks
In this continuing series on the recent Los Angeles Games Conference, the prior conversation was about the state of the gaming industry. This time around I took some time to attend a panel that discussed the potential for making money in virtual worlds. The event organizers described this panel as:
There is a growing consensus that successful online games companies, social networks and virtual worlds need to complement advertising and freemium with a virtual goods micro-transaction business model. The selling point is higher user monetization relative to advertising revenues because of the type of engagement that occurs in social communities and games, but what challenges face companies trying to enter this space and what models will emerge as the most successful? The business of virtual currencies (both earned and bought) have now already become a big business – but are there any inherent limitations in the future growth of the industry given the fragmented nature of it today (e.g., a game’s currency is, for the most part, tied to that specific game and cannot be used elsewhere or exchanged for other items of value)?
The panel was moderated by Jay Baage who is the Event Director for the LA Games Conference. He lead off with some of the biggest news which concerns Facebook Credits, which will be launching 1 July , 2011. Facebook Credits will be launching its in-site currency transactional system that will allow users to purchase items in games as well as non-gaming applications.
Rob Uhrich, Senior Director of PaymentsOne talked how payment methods need stream-lining as different countries use different transaction methods and in the US, most web-sites offer way too many ways to accept money making the experience messy.
Teemu Huuhtanen, EVP, Business Dev. and Communications of Habbo spoke about how their web-site fosters a virtual business community that is driven by the gamers's demands. Their "economy" functions much like the stock-market as prices adjust in real-time.
Continued on the next page
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