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Virtual goods market survey

13% of online Americans buy 'em, apparently.

(NEW YORK, NY & SANTA CLARA, CA) – May 27, 2010 – Research and consultancy firm, Frank N. Magid Associates, and PlaySpan, the global leader in monetization solutions for online games, virtual worlds, and social networks, today announce their second annual study that evaluates attitudes and behaviors of media and entertainment consumers on virtual goods expenditures.

According to the study, 13% of the overall population surveyed reported that they had bought virtual goods in the last 12 months, with the mean of digital good purchase up 14% from $87 in 2009 to $99 in 2010. The median of digital goods purchase is $50 in 2010, a 67% improvement from $30 in 2009. In terms of the heaviest concentration of digital goods buyers, iPhone owners took over the #1 spot, moving from 28% of iPhone owners in 2009 to 43% in 2010. Virtual worlds came in second place with 41% of regular visitors having bought a digital good. Of weekly handheld and mobile gamers, 33% and 32%, respectively, bought digital goods. Overall, more than one-fifth (21%) of those who bought digital goods said they plan to spend more in the next 12 months. Among ways to purchase digital goods, 16% of digital goods buyers say they have used Facebook Credits.

“There’s been a substantial increase in the number of consumers buying digital goods and an upward trend of players spending more on average than in the previous year,” said Mike Vorhaus, President, Magid Advisors. “With the proliferation of smartphone users, and players becoming more comfortable paying for items within virtual worlds and social networks, Magid believes there is a huge opportunity for developers and publishers to capitalize on this growing multi-billion dollar industry, especially as virtual credits and pre-paid payment options become more widely accepted.”

Other results were reported as follows:

Largest demographic of consumers who have reported buying virtual goods:

1. Males ages 18 to 24 (31%)

2. Males ages 8 to 11 and 12 to 17 (both at 23%)

3. Males 25 to 34 (21%)

4. Females ages 8 to 11 (16%)

5. Females ages 12 to 17 (15%)

6. Females ages 18 to 24 (14%)

Where consumers are buying from:

1. In a game (57%)

2. The official Web site outside the virtual world or game (38%)

3. E-commerce site such as PlaySpan (16%)

4. Another player (8%)

5. Other (8%)

6. Not sure (8%)

Type of game or environment where consumers have bought from:

1. A free, web-based game (37%)

2. A social network site, other than a game (31%)

3. A free multiplayer computer game (29%)

4. A game on a social network site (29%)

5. A connected console marketplace (21%)

6. A paid, subscription based multiplayer game (18%)

7. An online virtual world (11%)

8. Other (6%)

Concentration of virtual goods purchasers within ethnic groups:

1. Asian American (26%)

2. Latinos (20%)

3. African American or Black (15%)

4. Caucasians (11%)

5. All others (12%)

“We’re on the upward curve of a huge growth industry with younger players leading the charge,” said Eric Hartness, Chief Marketing Officer of PlaySpan. “In addition to growth in online games and virtual worlds, the data shows, and our internal metrics corroborate, tremendous virtual goods purchasing behavior in social network games.”

According to various sources, global revenues from the sales of virtual goods will eclipse $10 billion in 2010, while firms such as ThinkEquity, LLC have cited that the virtual goods industry now stands at a more than $1.6 billion in the U.S. alone, and is expected to climb to $3.6 billion in the next three years.

The survey was conducted between May 7 and May 12, 2010. It was a nationally representative online survey of 2,412 people, of whom, 1,955 were between the ages of 18 and 64 and 457 were between the ages of 8 and 17.

Copies of the research may be requested via email at gus.perez@playspan.com

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About Frank N. Magid Associates

Founded in 1957, Frank N. Magid Associates provides research-driven, strategic media counsel on the evolving consumer mindset for clients in 37 countries. The company helps businesses that are struggling to make sense of a constantly evolving marketplace connect with an increasingly elusive, splintered consumer who is seemingly hidden behind an expansive array of technologies. Magid not only provides businesses with an understanding of the attitudes, opinions and actions of today's technology-saturated consumers, but also offers research-driven strategic advice on how to successfully brand, advertise, market and design their products and services. For more information, please visit Magid on the Web at www.magid.com.

About PlaySpan, Inc.

PlaySpan™ is the global leader in monetization solutions for over 1,000 online games, virtual worlds, and social networks. PlaySpan's patent-pending in-game digital goods commerce and micropayment platform enables game publishers and developers to generate new revenues, acquire new users, and extend the loyalty of existing users.

PlaySpan’s UltimatePay™ combines PayByCash’s 11 years of payment services experience with Spare Change’s social network payment platform expertise to deliver an optimized payment solution with over 85 international payment methods including credit cards, PayPal, the ULTIMATE GAME CARD™ - available in over 45,000 retail locations across North America and growing rapidly worldwide, and UltimatePoints™, the world’s leading universal virtual currency.

For more information about PlaySpan, visit: http://corp.playspan.com

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Eric Gonzalez, 415-272-0836


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