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BREAKING NEWS & VIEWS
It’s a Kid's World…Virtually Of course, registration does not necessarily equate to active and regular use, but Strategy Analytics says it sees high conversions of signups to activity in this category. As we report in min this week, an American Idol room in the popular Habbo environment attracted more than 60,000 group members during the show’s recent season. And only a month into a partnership featuring the Seventeen magazine brand, about 20,000 members have signed into that group. The main revenue stream for virtual worlds will be micro-transactions that usually involve incremental upgrades in service or virtual goods that users purchase in order to customize their avatars and engage in one-off activities. Strategy Analytics believes these micro-transactions will represent 86% of revenue for these worlds—$1 billion in 2008 and escalating to $17.3 billion in 2015. The virtual goods economy in social networks like Facebook and Hi5 or virtual worlds like Habbo Hotel have gotten increased attention this year as content providers look for new models of extracting revenue from users. Once involved in a social context, many people seem willing to spend small amounts of cash to acquire unique clothing or profile wallpaper, access to invitation-only areas, etc. For media brands this model opens up the possibility of selling virtual branded merchandise in-world or charging incrementally for hosted parties and celebrity chats. Within the context of a traditional media site, users seem reluctant to pay, but in the context of virtual worlds they appear to be more willing to see value in additional content. Publishers hoping to ride this potential gravy train may want to get on board early to get some experience in the space. Virtual worlds are more structured kinds of social media, and they can become valuable labs for a media brand where polling, content testing and genuine conversations with users can take place. If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com |
 Sr. Marketing Manager, Confidential
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