There was a great article posted by the Wall Street Journal last week discussing ‘virtual products, real profits.’ Traditional games and entertainment are not expected to disappear, but there is a noticeable movement of games/entertainment through online means. Zynga would be one of the best examples of this as they definitely know what they’re doing when it comes to social gaming (the creators of popular games such as Farmville, Cityville, etc.).
The WSJ noted that total virtual goods sales in the U.S. are expected to jump 50% to $2.22 billion this year alone! Why are virtual goods to attractive to consumers?
Like tangible awards and acknowledgements, virtual goods can also offer a sense of accomplishment and fulfillment. In a game like CityVille, accomplishment can come from building out complete cities. On QuiBids, accomplishment can come from obtaining Achievements or Badges. Achievements don’t necessarily cost the participant anything, but rather these are virtual awards showing their accomplishments. What QuiBids does offer in purchases of virtual goods, are bid vouchers auctions. Bid voucher auctions are those that can give the winner extra bids that can then be used across any auction.*
When participants in these auctions do not win the ‘virtual item’ after it has ended, they are still able to purchase them at their value price, minus the read bids they put into the auction to begin with.