Harvesting Money From Planting Virtual Goods

POSTED BY Global Administrator
The smartphone revolution has brought unprecedented levels of traffic to mobile social media service providers but the main problem facing these providers is this – how do I convert this traffic into revenue? Many of these companies are already missing a trick by releasing mobile services with little or no advertising other than the in-stream kind which users have to opt into seeing by subscribing to feeds from brands. When the question of revenue generation was posed in the desktop space, many social media services turned to advertising to generate revenue from user bases willing to share large amounts of personal data. So if social media services aren’t using advertising to generate on mobile, how can they successfully monetise their mobile services? For the answer to this important question we should look to Japan and China where mobile social media services are already generating huge revenues from virtual goods. Consumers in these countries don’t just buy credits for social gaming; they buy clothing for virtual representations of themselves, enhancements for their profiles and even medicine for their virtual pets. Consumers in North America and Western Europe have already been exposed to virtual goods in the form of in-game items to allow players to progress more quickly in the game. As consumers begin to see the value of virtual goods, they will start purchasing more of them outside of the social gaming experience – assuming, that is, that the service providers offer those items at a price point low enough to encourage repeat purchases As we discuss in our new Mobile Social Media report, virtual goods already form the cornerstone for global mobile social revenues in the relatively mature Far East & China markets, and we believe that this model will become more prevalent elsewhere; we anticipate such revenues reaching $4.6bn by 2016 up from $3bn this year. Our Mobile Social Media video whitepaper is available to watch here...