Comments on: Forget advertising – is virtual goods the killer revenue model for Web 2.0? http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/ Essays on viral marketing, freemium, and social gaming Sun, 07 Mar 2010 15:07:14 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: Sergiu http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/comment-page-1/#comment-682 Sergiu Sun, 20 May 2007 07:41:23 +0000 http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/#comment-682 <p>Interesting, I knew about second life and their own currency, though I've never thought of it like this. It's a good concept to start selling virtual stuff, though I don't think this will replace classic ads any time soon.</p> Interesting, I knew about second life and their own currency, though I’ve never thought of it like this. It’s a good concept to start selling virtual stuff, though I don’t think this will replace classic ads any time soon.

]]> By: Nabeel http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/comment-page-1/#comment-681 Nabeel Thu, 17 May 2007 20:21:12 +0000 http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/#comment-681 <p>Obviously I generally agree with this post (duh), but I do think it is worth separating the two purposes of virtual goods.</p> <p>Club Penguin's primary use of a virtual economy is to support gameplay mechanics, not drive revenue. It is very different from Habbo, where you purchase furni with real money, in Club Penguin you play a game to earn coins to purchase furni.</p> <p>These have strong implications for the type of virtual economy (dual currency/single currency, scarcity?) that you introduce to your social network. </p> <p>There are really two uses of virtual goods:</p> <p>1) create incentive feedback loops that make your site more enjoyable/stickier -- this is just better interaction design. Club Penguin is an example (which gets revenue from subscription)</p> <p>2) create virtual currencies tied directly to real $ in order to purchase goods. This is the more direct revenue model that you allude to in the title and is what Habbo is like.</p> <p>However, both certainly have a place at Virtual Goods 2007. :)</p> Obviously I generally agree with this post (duh), but I do think it is worth separating the two purposes of virtual goods.

Club Penguin’s primary use of a virtual economy is to support gameplay mechanics, not drive revenue. It is very different from Habbo, where you purchase furni with real money, in Club Penguin you play a game to earn coins to purchase furni.

These have strong implications for the type of virtual economy (dual currency/single currency, scarcity?) that you introduce to your social network.

There are really two uses of virtual goods:

1) create incentive feedback loops that make your site more enjoyable/stickier — this is just better interaction design. Club Penguin is an example (which gets revenue from subscription)

2) create virtual currencies tied directly to real $ in order to purchase goods. This is the more direct revenue model that you allude to in the title and is what Habbo is like.

However, both certainly have a place at Virtual Goods 2007. :)

]]> By: Darren Herman http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/comment-page-1/#comment-680 Darren Herman Thu, 17 May 2007 17:48:02 +0000 http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/#comment-680 <p>A fairly timely blog posting... :)</p> A fairly timely blog posting… :)

]]> By: paulm http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/comment-page-1/#comment-679 paulm Thu, 17 May 2007 06:55:32 +0000 http://andrewchenblog.com/2007/05/16/forget-advertising-is-virtual-goods-the-killer-revenue-model-for-web-20/#comment-679 <p>Stardoll sells half a million pieces of virtual goods every day</p> Stardoll sells half a million pieces of virtual goods every day

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