PlaySpan / Magid Virtual Goods Report

Virtual Goods Trends
Emerging Trends Among Consumers
March 7, 2012
Presented at the Game Developers Conference
San Francisco

PlaySpan 2012 - All Rights Reserved

Methodology

Frank N. Magid Associates conducted an online survey in early January that focused on the
attitudes and behavior regarding virtual goods among U.S. consumers as well as among a
broad range of gamers.

Using a highly qualified sample provider, Research Now, Magid surveyed a representative
sample by gender, age (13-54 year olds) and ethnic background among consumers.

A screening question (Which platforms do you own and use regularly for gaming) was used
to identify current gamers. Those who did not select at least one of the platforms screened
out.


Terminology

Consumers: A sample of U.S.
citizens (13-54 year olds) with
access to internet.
Non
Gamers: A subset of consumers Gamers
who own and regularly use various Gamers -
platforms for gaming. Buyers
Gamers
Buyers: Gamers who have
purchased a virtual good over the
past year, 2011.


Consumers


Virtual Goods Buying Amongst
U.S. Consumers Has Dramatically Increased

+100%
One-in-four U.S. consumers
ages 13–54 purchased virtual
goods in 2011, which
represents a 100% increase
over 2009.


Virtual Goods Market Explodes
2009-2011 Amongst Consumers
Virtual Good Buyers
Trend Young
and Male

*2009 included 12 year olds


Profile Of Buyers Across
All Consumers In 2011
50%
Males
65%
50%
Females
35%

15%
13-17
18%
All Consumers
16%
18-24 Virtual Goods Buyers
21%
23%
25-34
26%
22%
35-44
23%
25%
45-54
13%

0% 20% 40% 60% 80% 100%


Gamers


Amongst Consumers, Seven In Ten
Can Be Classified As Gamers

29%

Gamers
71%
Gamers come from all segments of
Non-gamers the United States population.

71%


Profile Of Gamers Across
All Consumers
50%
Males
53%
50%
Females
48%

15%
13-17
13%
All Consumers
16%
18-24 Gamers
18%
23%
25-34
26%
22%
35-44
23%
25%
45-54
21%

0% 20% 40% 60% 80% 100%


Factors Effecting Games
Purchased Among Gamers
The price 64%
The genre of the game 51%
Friends’ recommendations 48%
User reviews 33%
Whether I can play it with my friends 30%
The game franchise 24%
Game critics reviews 22%
The ease of buying the game 21%
The company making the game 18%
Advertisements for the game 18%
Saw a promotion in a game you already play 11%
The virtual goods available 6%

0% 20% 40% 60% 80% 100%

What do you strongly consider when deciding which game to acquire?


Factors Effecting Games Played
Among Gamers
The genre of the game 60%

Friends’ recommendations 49%

How challenging/difficult the game is 49%

The graphic interface of the game 37%

Whether I can play it with friends 34%

The game franchise 29%

User reviews 29%

Game critic reviews 22%

The company making the game 20%

The virtual goods available in the game 11%

Ease of buying extras within the game 8%

0% 20% 40% 60% 80% 100%

Thinking about when you are about to play a game, what influences which specific game
you decide to play?

One In Three Gamers Have
Purchased Virtual Goods In 2011

35%
Purchasers of Virtual Goods

Non-purchasers
65%


Virtual Goods Buying
Amongst U.S. Gamers
Total Mention 35%

M 13-17 72%
M 18-24 57%
M 25-34 44%
M 35-44 36%
M 45-54 18%
F 13-17 29%
F 18-24 18%
F 25-34 23%
F 35-44 33%
F 45-54 23%

0% 20% 40% 60% 80% 100%


Profile Of Virtual Goods
Purchasers
100%

80%

65%
60%

40% 35%
26%
21% 23%
20% 18%
13%

0%
Male Female 13-17 18-24 25-34 35-44 45-54
Gender Age


Virtual Good Buying Amongst
U.S. Gamers
100%

80%

60%

40% 35%

22%
+50%
20% There is a fifty percent
increase in virtual goods
buying over 2010 among U.S.
gamers.
0%
2010 2011


Reasons For NOT Buying
Virtual Goods
I don’t play games where I need to buy them 35%

They seem unnecessary to the overall enjoyment of a… 32%

I don’t understand the point 24%

I have the money but think online games should be free 24% 69%
Price is too high for what I’m getting 16% While 31% say they
I don’t have the money to spend on them 14%
would never spend
money on a virtual item,
I have the money but don’t trust Facebook with my credit… 11% that leaves a huge
upside among the 69%
I have the money but don’t trust entering my credit card… 8% who will. This groups
exists equally across all
Not sure how to 6% demographics groups.
I would never spend money on a virtual item 31%

0% 20% 40% 60% 80% 100%
Why don’t you buy in-game virtual goods?


Reasons For Buying
Virtual Goods (Among those who have bought virtual goods)

To be able to do more in a game 55%

To get a better experience playing the game 49%

To be able to advance a level or state in a game 35%
To decorate or develop my avatar identity in a
32%
game/express myself
To improve my skills in a game 27%

To beat my friends 17%
Only because I have to pay to continue progressing
16%
/ having fun
To achieve a common goal with my game friends 14%
To show off the things/brands that I like in real life
10%
in a game
0% 20% 40% 60% 80% 100%

Why do you buy in-game virtual goods?


Where Gamers Purchase
Virtual Goods (Among those who have bought virtual goods)

A connected console marketplace (i.e. Xbox Live
48%
or PlayStation Store)

Directly within the game application 42%

I buy pre-paid card at retail stores 40%

From an online store (NOT the Game Publisher) 16%

From the Game Publishers Website (outside of
13%
the Game application)

0% 20% 40% 60% 80% 100%

Where do you purchase your virtual currency or virtual goods?


Purchased Virtual Goods As a Gift
Among those who have bought virtual goods

26%
Potential
Just 26% of respondents say that
Yes they’ve purchased virtual goods for
No someone else, leaving 74% of the
market untapped.

74% Those more likely to give virtual
goods as a gift are:
Women 32%
45-54 years old 42%

Have you ever bough a digital good or virtual gift for someone else?


Average Money Spent On Virtual
Goods In Last 12 Months (Among those who purchased virtual goods)

12% 10%

21%
$0
$1-$25
$64
Gamers have spent an average
$26-$50
of $64.13* on virtual goods
38% $51-$100
over the past year.
$100+

19%

How much did you spend in total on digital or virtual goods in-games in the last 12 months?
* = mean

Total Dollars Spent on
Virtual Goods

$2.3B

$1.8B

+28 %
Total dollars spent on
virtual goods is up 28%
since 2009.

2009 2011


Per User Dollars Spent on
Virtual Goods
$110
$102.80
$100
$91.54
$90
$80 $77.72

$70 $66.00

$60 $53.86
$48.03 $49.55 $50.38
$50
$40 $37.56

$30 $27.70

$20
$10
$0
M 13-17 M 18-24 M 25-34 M 35-44 M 45-54 F 13-17 F 18-24 F 25-34 F 35-44 F 45-54


Five Key Points To Remember

1. Purchasing virtual goods is becoming more and more mainstream each year.
Purchasing is up from 12% in 2009 to 25% in 2011 across consumers.

2. Purchasers are more likely to be men and 13-34 year olds. However, it is
important to note it is not limited to those demographics.

3. Virtual goods expand a gamer’s experience with the game but it does
significantly effect the purchase decision.

4. Seven in ten gamers who have not purchased virtual goods do not reject the
idea so the future is bright. This attitude exists across all demographic groups.

5. Gifting virtual goods is unexplored territory.


Download Link
Key Contacts

http://slidesha.re/Aa2ZKa
Mike Vorhaus Eric Gonzalez
President, Magid Advisors VSCpr on behalf of PlaySpan
mvorhaus@magid.com eric@vscpr.com

Robert M. Crawford, Ph.D. Robb Lewis
Vice President, Research PlaySpan
bcrawford@magid.com robblew@visa.com
@robblewis


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