After the GSB event on virtual goods and virtual currencies,I took some time to think about what my takeaways were. By writing them down, I seem to absorb them better, and be better able to apply those ideas going forward. I hope you find them helpful too.
Below is a list of points made during the talk, by Cary and others, about how these models work–together, they can serve as a primer to give quick insights into virtual worlds. These are the points that I thought were most relevent.
1. It may have been the kids who were first to play, but it's the grownups who really pay..the majority of folks on IMVU are over 18.
2. Make it easy for people to pay…and go beyond credit cards and paypal to offer several payment methods
3. There are two types of virtual goods people buy–
- functional virtual goods, that allow you to DO something (like a weapon in MafiaWars), and
- decorative virtual goods that allow you to express yourself (like a virtual dress or garden). People are willing to pay for both, but for different reasons
4. Consider multiple payment models–most virtual worlds use a Freemium model, in which the game is free to play, but becomes more interesting with payment. You can offer different options for free, via subscription, or via microtransaction "pay as you go" models. The important thing is to have options, and to see what works.
5. People generally participate in virtual worlds for one (or more) of the following 4 reasons:
- To enhance game play
- To express identity, either sharing one's real self or one's alter ego
- To build relationships and to make new friends
- To have fun shopping in an affordable way. For example, IMVU adds over 4,000 new items for sale each day–a huge catalog of items to buy.
6. Members of virtual communities can feel tremendous loyalty to their worlds, in much the same way as sports fans associate themselves with their favorite teams.
7. Virtual gifts make up a significant share of revenue, both in the form of virtual gifts presented online or gift cards purchased at retail–and are purchased and given for many of the same reasons as physical gifts.
8. Movie studios and other major media players risk missing the virtual boat with their insistence on total control of their images in virtual worlds. User-generated content both enables the kind of longtail choice that makes communities appealing, and engages individuals in a tangible way with the content.
9. Many "new frontier" businesses–social media included–risk focusing too much on the technology, and not enough on the customer experience and willingness to pay.
10. It's important to remember that virtual goods are real because they are imbued by their owners with real emotion and meaning. Ultimately this is the key point for marketers to remember when selling almost any kind of product, real or otherwise.
So now, go play a little. Check out a list of virtual worlds and avatar chat sites to get started in. In today's environment, it's definitely not wasting time. More like market research…
