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| In This Issue - October 2009 + Emerging business models for micro-transactions
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November Webinar |
- Digital Music - Asia Pacific, Latin America and other emerging markets - Online Games Market - Casual Games
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Pearl Research recently spoke at the Virtual Worlds/Digital Goods conference in San Jose. Below is a short highlight from the talk. In the context of social media and online games, micro-transactions refer to a digital payment system where users can purchase and exchange virtual items for small sums of money. These virtual items, examples such as virtual gifts, clothes for one’s avatar, weapons to be used in gameplay and access to hidden game levels, are generally priced from $0.25 to $10. This business model has captured the interest of content publishers
seeking to grow revenues and to provide inexpensively-priced, “bite-sized” content
to users. Companies that have successfully implemented micro-transactions
include Sulake Corporation, the parent company of Habbo, a virtual
world focused on teenagers. The company reported revenues of $74
million and profit of $7 million in 2008. A prominent trend are subscriptions that open up many services and virtual goods at a much lower cost than purchasing them individually. In addition, a subscription plan avoids the hassle of tracking the virtual items’ expiration dates. One site that has used this method include Qzone, which has 250
million users. That site offer subscriptions at less than $2 per
month to attract users that unlocks most of the graphical add-ons
for use on their profiles and makes gifts free. This plan offers
the user far more value than individually purchasing the graphical
add-ons and gifts, which are priced from a range $1 to $10, with
a few items selling for much more. As content publishers develop a myriad of monetization mechanisms
- from advertising, micro-transaction, lead generation to donations
- offering subscriptions where users can consume all the digital
goods they
want is another strategic and tactical tool.
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New Studies We've had a busy publishing schedule! Please contact us for an excerpt of these reports. i. Phoenix Generation - Online Games Tournaments, Success of Casual Game Audition, Virtual Currency Update Pearl Research's "Phoenix Generation" study tracks the latest trends among Chinese youth. These primary research studies are based on interviews and surveys with first- and second-tier youth across the country. This update analyzes the growth of online game tournaments, the success of games such as Audition and the latest laws regarding virtual currencies. ii. How the World's Biggest Social Networking Sites Monetizes This study analyzes the monetization of sites such as Qzone (with 200+ million members), Kaixin, and Renren, along with survey results for Facebook and Myspace. The study also provides key insights based on the growth of these sites. iii. Emerging Markets: Online Games Market in Vietnam Contact us for more info about our Vietnam digital entertainment study, available now. This study tracks emerging trends, identifies any opportunities for international companies and examine lessons learned from the this emerging digital entertainment market. This comprehensive study contains an executive summary, market forecasts, deep marketplace analysis, company profiles and strategic recommendations.
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