Study: Americans Spent $168M On Mobile Virtual Goods Last Year

Hey, hemorrhoids you rock star, you. You know all about innovating through mobility, right? You do the text messaging and the digital coupons. You’re even developing the app your boss wants. You’re mirroring what you have on your website. All in all, you have it under control. Yep, you can check another item off your to-do list.

And six months from now, you can start explaining why the competition is outperforming you when it comes to retaining customers, winning new business, and communicating with existing customers and potential ones through their cell phones, PDAs, smartphones, and such other mobile devices as the iPad and HP Slate.

Here’s the problem. While absolutely nothing is wrong with being tactical — and that is probably what you have been doing up until now if you think of communicating with your customers’ cell phone as “mobile marketing” — you need to do more. You must start thinking about where mobility fits into your overall business strategy. And if you are like most marketers and innovators, you haven’t done that yet. Let’s talk about what you have to do and how you can do it.

…When thinking about how to use mobility to leverage your business model to capture new opportunities, revenue, and connections with consumers, repeat after us: “I will not limit myself to mobile marketing. I will think behavior, not technology. I will master the five mega reasons people love their mobile phones so much, and I will capitalize on them — before my competition does.”

Read the rest of the article, including 5 insights to mobile innovation.
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NY - Virtual goods purchased on smartphones are a new emerging market in the United States. Who is actually buying them and how much they’re spending, recipe
however, has not been completely understood. Today, Frank N. Magid Associates and mobile social gaming network OpenFeint are shedding some light on the subject by providing the first-ever estimate on how much Americans are currently spending on virtual goods.

According to the study, Magid Media Futures 2010 Wireless and Consumers, Americans spent $168 million on mobile virtual goods in the last year. Magid estimates that over 70 million Americans now own smartphones – that’s 23 percent of the population. With 45 percent of those smartphone owners playing mobile games and 16 percent of those spending an average of $41 per year on in-game virtual goods, the market has already exceeded $168 million.

“The market for virtual goods has already exploded in web-based games like Zynga’s Farmville, and we’re just now starting to see this trend in the mobile space,” said Steve Lin, VP Operations of Aurora Feint. “In just the last few months we’ve seen amazing interest from our game developers in building mobile social games with virtual goods. Our internal numbers reflect the study in that free-to-play models will be the dominant pricing structure in the future”

With 55 percent of smartphone gamers interested in buying virtual goods, the market is poised for strong growth as more virtual goods-based games enter the market. The study also shed more light on who is likely to play games on smartphones. Compared to the general population, smartphone gamers skew male and are between 18 and 34 years of age.

Smartphone gamers are active consumers of multiple games, downloading 14 games on average per year. Of these games, recipients paid money for 4 games and obtained 10 for free meaning that consumer pay for mobile games at a 2:5 ratio vs. downloading free games. As expected, Americans are most likely to review application store rankings to find games, but are also likely to rely on word of mouth and the suggestions of their friends.

“Everybody knows free-to-play social gaming models on PC platforms have been making a killing but mobile virtual goods aren’t as well understood” said Mike Vorhaus, President, Magid Advisors. “With almost 20 percent of smartphone gamers already making purchases, there’s a lot of room for the market to keep taking off as smartphones continue to increase in popularity”

This is the first half of a two-part study that will be released this Summer.

For more information on the mobile virtual goods industry or Aurora Feint, please contact Ken Johnston at ken@vscconsulting.com. Aurora Feint partnered with Frank N. Magid Associates, Inc. www.magid.com to conduct and analyze the mobile virtual goods studies.

About Aurora Feint, Inc.
Aurora Feint, Inc.’s software development kit, OpenFeint, allows game publishers to implement services which enable mobile social gaming. With over 26 million registered users and a presence in over 2,000 games, OpenFeint is the first and largest social gaming platform for the iPhone. Aurora Feint is backed by DeNA Inc.