While most consumers tightened their real-world purse strings in 2009, but that did not seem to hurt sales of virtual goods. Users of virtual world Second Life spent $567 million buying virtual goods in 2009. 65% year-over-year increase in spending on user-generated virtual items for avatars. It’s marketplace saw virtual goods sales of $6.1 million. The economy is based on the Linden™ dollar (L$), Second Life’s virtual currency. You can buy and sell L$ on the LindeX™ the official virtual currency exchange of Second Life. In 2008 more than USD $100 million worth of L$ were bought and sold on the LindeX. While Facebook gets the media hype, Second Life generates real money – even though it starts as virtual money. Let’s look at the figures.

Second Life: Virtual Economies Continue To Rise

Second Life’s worldwide user base increased by 15% to 769 million, while the amount of time spent in the virtual world climbed even faster, by more than 21%, indicating increased engagement.

In 2009, Piper Jaffray predicted more than $2.2 billion in virtual goods revenues worldwide, including $621 million in the US. By 2013, more than $6 billion will be spent worldwide on virtual items.

It predicted that virtual worlds such as Second Life would fall behind in the virtual-goods economy while social network players like Facebook become more involved in the space.

Second Life Highlights of Q4 2009

• US$153 million in User-to-User Transactions, 53% growth over the same quarter last year
• All-time high and continuing rapid growth for the Xstreet SL online marketplace
• All-time high in Monthly Repeat Logins, at 769,000 in December 2009
• 3.1 billion Voice minutes, up 15% from the same quarter last year

Total user hours continued to trend downward in Q4 while peak concurrency remained flat. This decline stems from a decrease in user hours contributed by heavy usage accounts (300+ hours per months).

Second Life Economy – Financial Highlights

• User-to-User transactions in 2009 totaled US$567 million in 2009, growth of 65% over 2008.
• Virtual currency in circulation reached L$6.95 billion, growth of 23% over December 2008
• US Dollar value of L$ in circulation totaled US$26.5 million in December 2009
• Sales of User Generated virtual items on Xstreet SL, reached L$1.6 billion or US$6.1 million, growth of 74% over 2008
• Total US dollar value of all Linden dollars traded on the LindeX™ currency exchange in 2009 reached US$115 million in value,  7% growth over 2008
• Total US dollar value of all Linden dollars traded on the Xstreet SL™ currency exchange in 2009 reached US$1.5 million in value, 169% growth over 2008

Cary Rosenzweig, CEO of IMVU, another virtual world with extensive user-to-user virtual item offerings, described that service as “more like an e-commerce company … in the sense that we get our money from the purchase of these virtual credits that people use to buy virtual items.

“Virtual goods have value to people,” Mr. Rosenzweig told eMarketer. “People buy virtual goods usually for one of three reasons: to express themselves—so they’re buying virtual goods to make their avatar look terrific—or to build relationships with other people in the form of gifts. And [the] third reason, especially in gaming environments, is that virtual goods enhance your power to effect change, to win, to do what you would like to do in that area.”

Do you buy Virtual Goods?

Have you ever bought any Virtual Goods for your avatar? How much would you pay to bling your avatar or online user experience? What do you think are the main barriers for Second Life? Do people think it’s too weird? Do you use it?

If you want to see great web copy, read Andrew Chen. I’m going to show you his top 15 posts from last year. What do you see? The headlines are very compelling; smart little nuggets that draw you in. The secret is how he combines several copywriting techniques so well. It looks seamless. And that’s what makes it so great.

What Andrew Chen Can Teach You About Writing Killer Headlines

Let’s look at the first seven. Remember, Andrew writes about business models, design and metrics. Not very sexy. But, armed with the right attitude…

1. How to create a profitable Freemium startup (spreadsheet model included!)

Includes Freemium (good keyword) and adds the spreadsheet teaser. How many headlines have you seen include offers in brackets?

2. Built to Fail: How companies like Google, IDEO, and 37signals build failure-tolerant systems for anything!

Nice twist on Built to Last, the best-seller business book.

3. Free to Freemium: 5 lessons learned from YouSendIt.com

Squeezes two killer keywords, uses a number to grab attention, lessons learned implies that there will be some benefit for you the reader into the same headline

4. Product design debt versus Technical debt

Product design Technical debt. Four short words, nice and punchy.

5. Friends versus Followers: Twitter’s elegant design for grouping contacts

Do you see a pattern emerging here? Andrew counterbalances popular keywords (Twitter) against Friends and Followers. Also, ‘versus’ implies conflict or tension. A nice way to stir the reader’s emotions.

6. 5 warning signs: Does A/B testing lead to crappy products?

Crappy isn’t seen in too many headlines. When’s the last time you saw it?

7. Freemium business model case study: AdultFriendFinder ARPU, churn, and conversion rates

The 7^th most popular article has 13 words, including several acronyms, all flying in the face of convention wisdom.

FYI Andrew is here http://andrewchenblog.com/2010/01/03/top-posts-for-2009-freemium-design-and-metrics/

Those are the first seven on his list. Here’s the rest.

8. Which startup’s collapse will end the Web 2.0 era?

9. 2009 conference schedule for the digital media industry

10. Does every startup need a Steve Jobs?

My Fav!

11. Why low-fidelity prototyping kicks butt for customer-driven design

12. What if interviews poorly predict job performance? What if dating poorly predicts marital happiness?

13. How to calculate cost-per-acquisition for startups relying on freemium, subscription, or virtual items biz models

14. 5 crucial stages in designing your viral loop

15. Age (and ARPPU) ain’t nothing but a number: Data on how age impacts social gaming monetization

Over to you

What do you think of these headings? It’s not PC, it’s not the ‘correct’ way – but I think it works?

Does it work for you?

Colin Brennan introduces a podcast on Aion’s business model, the differences in how the Western and Eastern markets perceive gameplay, and how Aion manages to stretch their Tower of Eternity across both markets.

The Aion development team has re-designed Aion with a global mindset, such as tempering the experience grind with story and adapting the graphics to straddle the cultural preferences of both markets.

In addition to that, they wished to bring new perspectives to the industry as a whole, including their take on flight and the use of PvP in PvE settings.

You can watch the podcast here

Link: http://www.massively.com/2009/09/14/aions-third-podcast-takes-on-the-east-vs-west-gaming-approache/

Turbine’s Vice President of product development, Craig Alexander, offered the following suggestions for those considering setting up an online game. The comments were made at the last day of the Game Developer’s Conference Austin 2009, which the Gamasutra site has been covering in depth.
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7 Do’s And Don’ts When Developing an Online Game

1. Don’t assume that you’ll succeed just by creating a great game. Ensure that digital distribution and patching are effortless.

2. Get discs for your game into the hands of players.

3. Help the manufacturers to spread the word about the game, via demos or free discs at retail outlets.

4. Realize that marketing to a console audience is completely different than marketing to PC gamers.

5. Plan accordingly as budgets for console releases can dwarf most PC launches.

6. Don’t plan to ramp up “later”, assume success and plan accordingly.

7. Automate testing. You have to provide that service even if console gamer expectations are far lower than the average MMO player.

Virtual Currency Nightmares

Turbine believes trying to share a virtual currency cross platforms is a nightmare. Moreover, they see cross-platform play as a waste of time from a design standpoint. Every console game Turbine releases will offer distinct SKUs for each platform.

Turbine expected a loss in subscriptions when their games went free-to-play, but have seen a 20% increase in subscribers.

Alexander added that hybrid models can work in the US and that the assumption that models with too much choice for consumers is false.

Online Gaming Stats

Gamasutra estimate that by 2012:

Online console gaming will be a 7 Billion dollar industry.

58 million console gamers online

17 million of them on the Xbox 360

17 million users are already connected and engaged

Read More

You can read the complete article here:

http://www.gamasutra.com/php-bin/news_index.php?story=25349

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