Virtual Good
Candlefocus EditorA virtual good is an intangible asset that is not limited to physical or tangible objects and is typically exchanged in virtual economies, such as in online games. Thus, virtual goods usually exist in digital form and are often referred to as digital goods. This could come in a variety of forms, including virtual currency, digital music, game levels and avatars. Virtual goods have been a major source of income for game developers as they have become an increasingly important revenue model for many games.
Virtual goods are often purchasable from the developer of the game, but can also be found in trading markets where players exchange their items for other digital goods or even real money. The virtual goods market has seen tremendous growth over the past few years due to the popularity of online games and mobile gaming, with annual revenues estimated to be over $52 billion.
The Appeal for Consumers
The appeal for virtual goods lies mainly in their “real-life experience” attribute. With virtual goods, consumers are able to make lasting investments in an immersive digital experience. Furthermore, they are able to customize their characters and items, adding a more personalized touch to their gaming experience. This customization acts as a form of self-expression that allows gamers to truly become part of the game.
Moreover, virtual goods are often accessible and affordable, allowing consumers to spend as much or as little as they want while they are entertained. This is especially true in mobile gaming, where gamers can pay little, incremental fees which have a minimal impact on their wallets, yet still allow them to access virtual goods.
A Growing Industry
The industry around virtual goods has grown significantly over the past few years. As of 2018, gaming generated $134 billion in revenues, with digital goods accounting for roughly $18 billion of that. This has led to the growing popularity of digital and free-to-play games which use micro-transactions to monetize the experience. This surge in growth is also set to continue in the future, as there is no sign of slowing down in the industry.
Furthermore, the line between physical and virtual goods is also beginning to blur. There is a growing trend of physical objects being traded and sold for virtual goods, such as items being exchanged for in-game virtual currencies, or for access to digital assets like players, game levels and more. This trend is only set to increase in the future as transactions involving physical and virtual assets become more commonplace.
Conclusion
Virtual goods are an integral part of the gaming industry and have become an increasingly important revenue model for many games. This is not only limited to video games, but also extends to mobile and free-to-play games as well, which are increasingly relying on small, incremental micro-transactions to monetize the experience. Moreover, the line between physical and virtual goods is beginning to blur as physical assets are exchanged for virtual goods, and will only further grow in the coming years.