While virtual goods are usually confined to conversations about pixelated clothing and weapons, music is by far the highest grossing digital good. A look at what makes music sell as a virtual good.
4. the typical market for
virtual goods
$200m
2006
2007
$150m
$100m
$50m Note: some of these
are “hand wavy”
estimates
$0m
Habbo Second Life IMVU Nexon Facebook
virtual good sales
5. what about music
$1,500m
2006
2007
$1,125m
$750m
$375m
$0m
Habbo Second Life IMVU Nexon iTunes Rock band
virtual good sales
6. what about music
$1,500m
2006 Not
2007
counting:
$1,125m
- amazon,
emusic, etc
$750m - ring tones
$375m
$0m
Habbo Second Life IMVU Nexon iTunes Rock band
virtual good sales
13. How’s that compare?
Habbo
Music Furni
Functional Yes No
Decorative Yes Yes
Authorship Yes No*
Infinite Yes No
Transportable Yes No
* - some advertising supported
14. How are we performing?
Gaia
Habbo Clothi Rock Kart Second Facebo
Music Furni ng Band IMVU Rider Life ok
Functional Yes No No Yes No Some Yes No
Decorative Yes Yes Yes Yes Yes Some Yes Yes
Authorship Yes No* No Yes Yes No Yes No
Infinite Yes No Some Yes Yes Yes Yes Yes
Transportable Yes No Some No No No No No
22. and it is a growth
business
20%
15%
10% Concerts
Recorded Music
Growth Rate
5%
0%
-5%
-10%
-15%
-20%
2005 2006 2007
Source http://www.ft.com/cms/s/0/2c2ce6ce-626b-11dc-bdf6-0000779fd2ac.html?nclick_check=1
Neilsen Soundscan
23. Music games accounted for 16%
of U.S. video game sales in 2007
and 44% of growth
Source: UBS Securities