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.

Gamers: A subset of consumers who own and regularly use various platforms for gaming.

Buyers: Gamers who have purchased a virtual good over the past year, 2011.

NonGamers

Gamers -Buyers

Gamers


Consumers


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

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

+100%


Virtual Goods Market Explodes 2009-2011 Amongst Consumers

*2009 included 12 year olds

Virtual Good Buyers Trend Young and Male


Profile Of Buyers Across All Consumers In 2011

50%

50%

15%

16%

23%

22%

25%

65%

35%

18%

21%

26%

23%

13%

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

Males

Females

13-17

18-24

25-34

35-44

45-54

All Consumers

Virtual Goods Buyers


Gamers


Amongst Consumers, Seven In Ten Can Be Classified As Gamers

71%

29%

Gamers

Non-gamers

Gamers come from all segments of the United States population.

71%


Profile Of Gamers Across All Consumers

50%

50%

15%

16%

23%

22%

25%

53%

48%

13%

18%

26%

23%

21%

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

Males

Females

13-17

18-24

25-34

35-44

45-54

All Consumers

Gamers


64%

51%

48%

33%

30%

24%

22%

21%

18%

18%

11%

6%

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

The price

The genre of the game

Friends’ recommendations

User reviews

Whether I can play it with my friends

The game franchise

Game critics reviews

The ease of buying the game

The company making the game

Advertisements for the game

Saw a promotion in a game you already play

The virtual goods available

Factors Effecting Games Purchased Among Gamers

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


Factors Effecting Games Played Among Gamers

60%

49%

49%

37%

34%

29%

29%

22%

20%

11%

8%

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

The genre of the game

Friends’ recommendations

How challenging/difficult the game is

The graphic interface of the game

Whether I can play it with friends

The game franchise

User reviews

Game critic reviews

The company making the game

The virtual goods available in the game

Ease of buying extras within the game

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%

65%

Purchasers of Virtual Goods

Non-purchasers


Virtual Goods Buying Amongst U.S. Gamers

35%

72%

57%

44%

36%

18%

29%

18%

23%

33%

23%

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

Total Mention

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


65%

35%

18% 21%

26% 23%

13%

Male Female 13-17 18-24 25-34 35-44 45-54

0%

20%

40%

60%

80%

100%

Gender Age

Profile Of Virtual Goods Purchasers


Virtual Good Buying Amongst U.S. Gamers

22%

35%

2010 2011

0%

20%

40%

60%

80%

100%

There is a fifty percent increase in virtual goods buying over 2010 among U.S. gamers.

+50%


35%

32%

24%

24%

16%

14%

11%

8%

6%

31%

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

I don’t play games where I need to buy them

They seem unnecessary to the overall enjoyment of a…

I don’t understand the point

I have the money but think online games should be free

Price is too high for what I’m getting

I don’t have the money to spend on them

I have the money but don’t trust Facebook with my credit …

I have the money but don’t trust entering my credit card …

Not sure how to

I would never spend money on a virtual item

Why don’t you buy in-game virtual goods?

While 31% say they would never spend money on a virtual item, that leaves a huge upside among the 69% who will. This groups exists equally across all demographics groups.

69%

Reasons For NOT Buying Virtual Goods


55%

49%

35%

32%

27%

17%

16%

14%

10%

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

To be able to do more in a game

To get a better experience playing the game

To be able to advance a level or state in a game

To decorate or develop my avatar identity in agame/express myself

To improve my skills in a game

To beat my friends

Only because I have to pay to continue progressing/ having fun

To achieve a common goal with my game friends

To show off the things/brands that I like in real lifein a game

Why do you buy in-game virtual goods?

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


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

48%

42%

40%

16%

13%

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

A connected console marketplace (i.e. Xbox Liveor PlayStation Store)

Directly within the game application

I buy pre-paid card at retail stores

From an online store (NOT the Game Publisher)

From the Game Publishers Website (outside ofthe Game application)

Where do you purchase your virtual currency or virtual goods?


26%

74%

Yes

No

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

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

Just 26% of respondents say that they’ve purchased virtual goods for someone else, leaving 74% of the market untapped. Those more likely to give virtual goods as a gift are: Women 32% 45-54 years old 42%

Potential


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

10%

38%

19%

21%

12%

$0

$1-$25

$26-$50

$51-$100

$100+

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

Gamers have spent an average of $64.13* on virtual goods over the past year.

$64


Total Dollars Spent on Virtual Goods

2009 2011

$1.8B

$2.3B

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

+28 %


Per User Dollars Spent on Virtual Goods

$91.54

$48.03

$66.00

$77.72

$49.55

$27.70

$37.56

$50.38 $53.86

$102.80

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

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110


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.


Robert M. Crawford, Ph.D.

Vice President, Research

[email protected]

Mike Vorhaus

President, Magid Advisors

[email protected]


http://slidesha.re/Aa2ZKa

Eric Gonzalez

VSCpr on behalf of PlaySpan

[email protected]

Robb Lewis

PlaySpan

[email protected]

@robblewis

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PlaySpan / Magid Virtual Goods Report