The rise of social gaming has had a huge impact on the games industry, and companies like Zynga are reaping the rewards while more traditional publishers are trying to adapt to the growing social games space. Trip Hawkins, CEO of mobile and social entertainment company Digital Chocolate, is envisioning absolutely massive sales for the space in the future.
Writing on his blog, the EA ad 3DO founder commented that ultimately the global market for virtual goods could exceed $100 billion this decade. He explains, "An estimated $7 billion in virtual goods were sold in China last year, and another $1 billion in the Western World. What gets me intrigued about this is the fact that the West is just getting started and we have 8.5 times more Gross Domestic Product than China. That should generate enough buying power to suggest that when the West is comparable to the 2009 China market, it might be a $60 billion market in the West alone. At that point on a global basis including all of Asia it would likely exceed $100 billion. And I have no doubt of this; I expect it to happen in this decade."
Hawkins adds that the social games sector is still reeling from the impact of "spammy" offers and that many companies are “back to the drawing board,” trying to adapt to other business requirements. "Going forward, spammy isn’t going to cut it. Shallow gameplay isn’t either; or games that don’t monetize. Lack of funding for marketing will be another killer. Walled gardens, or depending on any one platform will be a business liability and a negative for consumers," he said. "The industry has a ton of potential but has to overcome these issues. The $7 billion spent on virtual goods in China last year should give us great hope, but let’s not screw it up."
[Thanks to Edge for the tip]
1 Comments
April 19, 2010
I can't wait for the day when we hit to pay $60 for a game, $10 activation fee, $5 for weapons that are necessary to fulfill goals, $20 to endeavor online, $5 to speech to our friends online.