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7/31/2009
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1 In 10 Internet Users Buys Virtual Goods

Nearly half of buyers report visiting virtual worlds; more than a quarter said they either own an iPhone or play social network games.

Virtual weapons, Facebook favors and other forms of digital currency are a growing market, according to a survey released Thursday, with 12 percent of Americans saying they spent real money on these items in the last year.

The heaviest buyers of these objects -- which are bought over the Internet and exchanged through online games, social networks, and virtual worlds such as Second Life -- appear to be young and middle-aged women ages 12 to 44, although they were also purchased by young men.

Virtual goods were also more popular among Asians and Latinos than whites or blacks. Nearly half of buyers report that they enjoy visiting virtual worlds, and more than a quarter said that they either own an iPhone or play social network games. Frequent gamers -- whether they play on PCs, the Web or mobile devices -- also buy virtual goods.

And even though virtual goods are a casual purchase, with a majority of buyers unable to remember how much they've spent, 15 percent recalled spending $100 or more. The median amount spent was around $30.

"As this market grows, (we) believe that a majority of consumers will continue to spend $50 or more on virtual goods every year" said Mike Vorhaus, president of Magid Advisors, the consultant that conducted the survey.

Venture capitalists have also been investing in virtual goods companies. PlaySpan, the startup that sponsored the survey, has raised over $20 million for creating e-commerce software that enables buying and selling of virtual goods.

The company was started three years ago by an elementary school student in Santa Clara, California, out of money he'd earned selling virtual goods he'd won in online games. His father, Karl Mehta, is now co-founder and CEO.


InformationWeek Analytics has published an independent analysis on application delivery. Download the report here (registration required).

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