Virtual Goods Market (courtesy Playspan)

PlaySpan/VGMarket Digital Goods Spending Report

July 2010

Contents

• Executive Summary/Demographics

• Spending Habits

• Video Game Preferences

PlaySpan Digital Goods Spending ReportJuly, 2010

Methodology

Overview

• This report highlights detailed responses to the PlaySpan/VGMarket Digital Goods Spending Report.

• Survey was distributed by email and web links to a sample of 2,221 PlaySpan Marketplace, Facebook via Spare Change, and Ultimate Game Card gamers.

• Responses were collected from June 3 – June 30, 2010.

Objectives

Obtain insight on:

• Digital goods buying from 1st party publishers.

• Digital goods buying from 3rd party marketplaces.


Key Takeaways

• The PlaySpan/VGMarket Digital Goods Spending Report demonstrates the tremendous monetization opportunities available to both first-party publishers and third-party marketplaces through the sale of digital goods. Each type of digital good has a unique level of demand, and the amount of money that a consumer spends on digital goods varies by genre.

• Publishers and marketplaces can use this insight to forecast revenue, make the right development investments, and effectively allocate marketing dollars. The result is higher profitability through optimization of an existing digital goods revenue stream and the development of new, effective digital content.

• Respondents spent more money on digital goods in Social Networking games than in any other genre over the last 12 months.

• Although males are playing significantly more games and are the primary drivers of total digital goods sales, the data shows that North American women 25 and older are spending disproportionately large sums of money on digital goods.


Executive Summary /Demographics

• North American women over the age of 25 are spending the most money on Digital Goods.

• Respondents spent more money on Digital Goods in Social Networking games than in any other genre over the last 12 months.

• In-game Currency, Virtual Gifts, and Wearables were the most popular types of Digital Goods purchased over the last 12 months.

• Respondents are actively purchasing Digital Goods from both 1st party and 3rd party sources.

• PayPal (43%) is the preferred method of payment for Digital Goods.

• The average respondent in this study is a 23.5 year old male (78% of total sample) with an average annual household income of approximately $46,000.


Executive Summary

Genre From 1st Party Sites From 3rd Party Sites

Social Networking $50 $30

MMOs $40 $35

Casual Games $40 $30

Free to Play Games $40 $25

PC Games with Online Play $37 $10

Console Games with Online Play $20 $20

Median Spent on Digital Goods By Genre


First party sources are the primary medium for purchasing digital content.

Content Type From 1st Party Sites From 3rd Party Sites

In-Game Currency (gold, coins, credits,

etc.)$31 $20

Virtual Gifts (Flowers, rings, holiday

items)$30 $20

Wearables $28 $20

Power Ups $20 $15

Subscription Codes $20 $15

Maps/levels $20 $11

Weapons $20 $15

Median Spent on Digital Goods By Content Type


First party sources are the primary medium for purchasing digital content.

In-Game Currency (gold, coins, credits, etc.)

Weapons

Power Ups

Wearables

Virtual Gifts (Flowers, rings, holiday items)

Subscription Codes

Maps/Levels

Other

Respondents prefer to spend their money on In-Game Currency and Weapons


PlaySpan Digital Goods Spending Survey ReportJuly, 2010

Free to Play Games

MMOs

Social Networking Games

PC Games with Online Play

Casual Games

Console games with online play

None of the Above

Respondents who purchase virtual content prefer to buy for Free to Play Games, MMOs, and Social Networking Games

Demographics• 2,221 total respondents between the ages of 13 and 64• 78% male• Average respondent age: 23.5• Average household income: $45,923


Demographics (1/2)


Demographics (2/2)

Notable Differences among Demographic groups:

Age 13-17 18-24 25+

Median Spent on 1st-party Purchases in Social Networking Games $20 $40 $50

Median Spent on 1st-party Purchases of In-game Currency $20 $23 $50

Median Spent on 3rd-party Purchases of Power Ups $10 $15 $20

Median Expenditure Overall $50 $63 $100

Gender Male Female

Median Spent on 1st-party purchases in Social Networking Games $30 $55

Median Spent on 1st-party Purchases of In-game Currency $25 $50

Median Expenditure Overall $60 $80

Country US Canada Philippines

Median Expenditure Overall $78 $75 $40

Spending Habits

30%

21%

49%

Do you plan to spend more, less, or the same amount on digital goods in the next 12 months?

More

Less

About the Same

About half plan to maintain spending on digital goods in the next year


I am playing more online games than before

They give greater in-game rewards than they did before

They are easier to purchase than they were

They are cheaper than they were

I have more money to spend now

Respondents expecting to spend more cite “playing more online games” as the reason


I have less money to spend now

They are more expensive than they were

I am playing fewer online games than I did before

They are more difficult to purchase than they were

They give lesser in-game rewards than they did before

Respondents expecting to spend less cite “having less cash” and “increased expense of gaming”


I do not believe it is worth the money

I have no interest in purchasing virtual items or content

I'm afraid that the player/site would take my money and not deliver the item

I would if I knew how/where to buy

Buying items is cheating

I didn’t know this was possible

It’s against the Terms of Service of the game

Other

None of the above

Respondents who have not purchased in the past chose “it is not worth the money” as the most common reason


Who Do You Buy From?

29%

41%

30%

Third-party websites and otherplayers

Directly from the company thatmakes the game

Both

Respondents indicate a preference towards buying content directly from the company who makes the game


What method of payment do you use?

2%8%

2%4%

7%9%

12%13%13%

17%20%

30%32%

43%

0% 10% 20% 30% 40% 50%

PayPal

Credit Card

Ultimate Game Card

Cash/Money Order/Check

Mobile phone payment

PayByCash

By completing surveys and offers

Spare Change

Game specific surveys and offers

Facebook Credits

Click N Buy

Social Gold

Other

None of the above

PayPal, Credit Cards, and Ultimate Game Cards are the preferred methods of payment for digital goods


Every day

A few times a week

Once a week

A few times a month

Once a month

Once every couple of months

Once a year or less

The majority of respondents purchase digital goods a few times a month or less


What are your reasons for purchasing virtual items or content?

2%

2%

10%

19%

22%

23%

44%

44%

68%

0% 20% 40% 60% 80%

To use in the game myself

To get unique items I can only get through purchase

To advance further in the game

To get items that otherwise I wouldn’t have time to earn

To give as a gift to someone else

To decorate my page, persona, and/or avatar

To resell to other players

Other

None of the above

Respondents prefer purchasing content to use in the game for themselves


Video Game Preferences

Online Gameplay

How many PC or Console video games have your

purchased in the last 12 months?

Free to Play Games 53%

Social Networking Games 53%

PC Games with Online Play 41%

MMOs 41%

Casual Games 29%

Console Games with online play 26%

How many different online games do you currently

play?

1 17%

2 22%

3 22%

4 9%

5 or more 30%

How many hours do you spend playing games

online in an average week?

0 1%

1-2 6%

3-5 12%

6-10 16%

11-20 17%

21-30 15%

31-40 11%

41-50 6%

50 or more 16%

Average Time 23.7


General Gameplay

How many PC or Console video games have

your purchased in the last 12 months?

0 14%

1-2 31%

3-5 23%

6-10 15%

11-20 9%

21-30 4%

31-40 1%

41-50 1%

50 or more 2%

Average Games 7.5

How many Free to Play games have you

played in the last 12 months?

0 3%

1-2 25%

3-5 27%

6-10 18%

11-20 11%

21-30 5%

31-40 2%

41-50 2%

50 or more 6%

Average Games 11.2


General Gameplay

How many Social Network games have you

played in the last 12 months?

0 14%

1-2 29%

3-5 23%

6-10 14%

11-20 8%

21-30 4%

31-40 2%

41-50 1%

50 or more 4%

Average Games 8.4

How many iPhone/iPod Touch games have you

downloaded or purchased in the last 12 months?

0 11%

1-2 14%

3-5 17%

6-10 14%

11-20 14%

21-30 10%

31-40 6%

41-50 3%

50 or more 13%

Average Games 17.0


Virtual Goods Market (courtesy Playspan)

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