Branded virtual goods are expected to generate $150 million in worldwide annual revenues over the next three years, according to a new study from digital goods firms Viximo and Virtual Greats.
The "Branded Virtual Goods Market Report" notes that in five years, those global annual revenues will increase even more by 2015 to $318 million as digital products become more ubiquitous and companies come to recognize the opportunities with a virtual goods strategy.
Viximo and Virtual Greats estimate current branded virtual goods revenues at $16 million, a 1 percent share of the broader $3.1 billion virtual goods market (according to Piper Jaffray). The two firms, though, say growth for branded virtual goods will outpace that of the overall industry's.
The groups predict branded virtual goods will have a 2.5 percent share of the forecasted $6 billion virtual goods market in 2013, and a 4 percent share of the anticipated $900 million market in 2015. They add that in five years, one in every 25 virtual goods sold will be associated with a brand.
To illustrate its point, the report provides a case study of virtual goods from rapper/actor Snoop Dogg, which include avatar clothing, pets, and virtual gifts. So far, the artist has generated more than $200,000 in sales in online communities such as Wee World
and Gaia Online
"My virtual items are off tha chain jacc!" exclaims Snoop Dogg in an equally off the chain statement. "It’s a world and a movement that I have been down with since day 1 and we are gonna continue to hit u with hot products and virtual items until tha wheels fall off. Be on da lookout for more items in an internet hood near u – ya dig?!?"
The study goes on to point out two key market factors that will drive branded virtual goods sales, including more "super brands" exploring digital goods in virtual worlds and social games; and the rise of mobile/GPS applications (MyTown, Foursquare) with check-in features that reward users with virtual goods.