A Game Changer for Virtual Greats :  the Facebook Gift Shop

OK, so here goes. . . .

We’ve always believed in virtual goods.  These are defined as the digital goods and services that people buy or actively trade in games, virtual worlds and online communities.  Estimates vary on the size of the market but the consensus is that it’s roughly $1.0 Billion in US in 2009, larger in Asia and growing as fast as 75% year-over-year.  Virtual Greats’ founding hypothesis a year ago was that if we could dominate the area of branded and premium virtual goods, this could have huge value.  We knew that 35 - 40% of real world products are branded.  We hoped this would translate into virtual goods because of how well brands help people express identity, group and social affiliations and rank data.

Over the last year, we managed to put together a library of rights to sell Virtual Goods associated with Artists (Justin Timberlake to Elvis ) Intellectual Property (NBA, Major League Soccer, 42 Division 1 Schools) and lifestyle brands like Jay Z’s Rocawear.  Until yesterday, we were selling hundreds of products across 12 platforms.  Yesterday, we announced Facebook as lucky 13.  As of yesterday, Virtual Greats is currently selling 85 products in the newly redesigned Facebook Gift Store.  For those unfamiliar, the gift store Facebook launched Gifts on February 8, 2007, which allows users to send virtual gifts to their friends that appear on the recipient’s profile. Gifts cost $1.00 each to purchase, and a personalized message can be attached to each gift.  Some have estimated that the previous (and quite modest) product was driving $50 - 60 million in 2009 revenue.

This is a major evolution for the industry of virtual goods and for our little company.  First, it marks the creation of something like an Itunes for virtual goods.  Secondly, it lays social objects, as well as songs as MP3’s over the social graph.  We think this is a big deal and we’re so thrilled to be sharing it with you.  I’d love to hear whether people think this interesting as well as speculation on where the market is going.

Finally, a picture of me buying my wife a Lakers’ Jersey for 30 Facebook credits ($3 , billed direct to my iPhone ! )  She’ll look virtually great in it!

Posted by .(JavaScript must be enabled to view this email address) on 10/23 at 12:05 PM

  1. Thanks for the virtual jersey, I’m a super fan now—very cool.

    Posted by .(JavaScript must be enabled to view this email address) on 10/24 at 08:17 AM

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