Girls in Tech was on the scene yesterday as Virtual Goods Summit 2009 kicked off with VGS University. Hundreds of people came out to the half day seminar to learn from case studies and presentations by Linden Lab, Mochi Media, IMVU, Gaia Online, Ning, Viximo, Shufflebrain and others.
The afternoon panel on the Payments Landscape featuring SuperRewards, TrialPay, BOKU, PlaySpan, and ORCA garnered a packed ballroom. Charles Hudson, host of VGS09, moderated the panel and asked whether it’s a good or bad thing that the payments space is so chockfull of players. Not surprisingly, the panel thought it was a good thing – and that it speaks to the vast potential opportunity for virtual goods in games. They also agreed that the need for payment solution providers is high since payments are complex, requiring relationships with often hundreds of banks and wireless carriers if you take into account the international landscape. Then there’s the sticky issue of fraud and security. Finally, there’s scale of economies, and the idea that a game producer should concentrate on making great games instead of getting caught up with building a payment solution. Overall, more payment providers means more choice for game publishers, and more pressure for payment providers to deliver better products and customer service.
The panel shared the following statistics: For free to play games on social networks, virtual goods conversion for those who actually pay is 3-4%. This of course varies depending on the virality and engagement quality of the game. Lex Bayer from PlaySpan suggested that for each daily active user associated with a game on a social network, there is ten dollars of annual revenue potential. Therefore, if you have five million DAU’s your potential revenue is $50 million in annual revenue. Not shabby.
Big revenue potential and a young market makes for great energy, an eagerness for learning, sharing, and collaborating, with a good measure of competition and creativity thrown in. This is going to be one good summit. Join us today for part two of the third annual Virtual Goods Summit taking place today at the Westin in downtown San Francisco. And stick around for the after party that Girls in Tech is co-hosting with Offerpal at Harlot nightclub!
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