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Investment in virtual goods companies increases three-fold in 2009

Companies including Facebook, Zynga, Playfish raise $1.4b over year

The total amount invested into virtual goods-related companies reached an all time high in 2009, increasing more than 100 per cent year-on-year to $1.38 billion.

That investment was headlined by the $300 million paid by EA to acquire social gaming firm Playfish - the year's largest single investment.

The second largest acquisition was China-based KongZhong's $80 million payment for online developer Dacheng, while Russian company Digital Sky Technologies ploughed $200 million into social network Facebook and a further $180 million into social games publisher Zynga.

2009's figures represented a three-fold increase in investment on 2008, according to Engage Digital Media's 2009 Virtual Goods Investment Report.

And the total number of companies that received capital was up significantly too - from 34 in 2008 to 87 in 2009.

18 acquisitions took place - with half of those carried out in the 4th quarter, said the report.

"Virtual goods was the hot story of 2009, driving investment that crossed over into game development, virtual currency, payment services, and social networks," said Christopher Sherman, CEO of Engage Digital Media.

"In the fourth quarter alone companies raised an astounding $944 million, more than double the amount raised in all four quarters of 2008."

The sector's performance was significant not least because of the economic hardship encountered in most tech-related sectors during the year, added the report. Total funds invested and the amount of individual investments defied a major freeze that took place during the first and second quarters of the year.

Notably, the fourth quarter of 2009 delivered the best quarter for the virtual goods space since Engage began tracking investments - both in total number and total value of investments made.

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