Biggest sellers in the virtual world

Virtual goods are providing very high-margin sales for many internet companies. According to PaidContent.org, Chinese portal Tencent pulled in nearly $1 billion last year from the sale of virtual goods, while Facebook earns between $50 million and $100 million (your mileage may vary on these estimates). Recently Hi5 Networks made the move to include far more virtual goods as part of its social-networking site.

Obviously every site is a bit different, but there are two common threads of items that people seem ready to pay for:

1. Customization of the environment -- page decorations and other things that provide some kind of status in the game
2. Enhancements to games -- if you can't beat them, you can just pay for items

Of course, there are many other possibilities--virtual gifts play a big role in Facebooks' revenue and I believe there is a huge market for goods such as baseball cards and other tradeable real-world/virtual world crossovers.

Looking at three of the top virtual goods companies, Rory Maher outlined how they make money.

Tencent
Premium instant messaging
Pet penguins
Page decorations

Playdom
Clothing
Weapons & adornment for cars
Advancement in the game

Zynga
Poker chips
Mystery crates
Home improvements
Flame throwers

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