Virtual worlds may not have panned out as the cyber concert venues they were originally touted to be, but there’s still money to be made in selling virtual goods within today’s social networks.
Snoop Dogg, for instance, has made $200,000 selling his branded virtual good in such online environments as WeeWorld, Gaia Online, Zwinky and others, according to a report from social gaming platform Viximo with virtual goods provider Virtual Greats. Items include clothes for users’ avatars, pets, and gifts.
The report says the users are more willing to part with real dollars for virtual goods if they’re tied to a brand or personality they identify with, such as celebrities like Snoop. His virtual products sold 2.5 times as well as other similar goods, according to WeeWorld. His Snoop Double Dogs pet product sells five times more than any other item in the “pets” category.
From the report: According to WeeWorld, a social game and virtual world with a global audience of more than 36 million registered “WeeMee” avatars, unit sales of Snoop Dogg branded items are 2.5 times higher than the highest selling non-branded, comparably priced item. In addition, sales of Snoop Double Doggs (which fall into the category of branded pets called “Cweetures”) are 5 times higher than the highest selling non-branded pet (see right). Since all WeeMee avatars are created equal and do not feature special functionality (i.e. they are vanity-only items) it is clear that Snoop Dogg’s own brand equity is the driving factor behind the increased desirability for these virtual goods that draw from his likeness.
On Gaia Online, Snoop Dogg’s Branded Virtual Goods inventory includes a branded sweatshirt and a boom box that can be purchased and used by a player’s online avatar. In November 2008, these items were sold directly to players at a “list price” slightly higher than the items’ generic counterparts. The items sold well, but the true value became apparent in Gaia Online’s secondary marketplace.
This secondary market is an eBay-like bazaar where players can buy and sell virtual goods via player-toplayer auctions. Here, the Celebrity Snare Snoop Dogg’s Hoodie item traded for over 10,000 Gaia Gold (the site’s reward currency), which was a 345% premium over a similarly styled, generic Soft Ivory Hoodie. In addition, the Celebrity Snare Snoop Dogg’s Retro Boombox was valued at over 9,000 Gaia Gold, which was an 1800%+ premium over the generic Red Mini Boombox.
This data illustrates the price premium dynamics that drive the Branded Virtual Goods opportunity – Gaia users valued the Snoop Dogg branded items more highly than their generic counterparts and this led to significant inflation in their selling price on the secondary market.
To date, Snoop Dogg Branded Virtual Goods have generated over $200,000 in sales, and virtual goods have become a rapidly growing part of the artist’s merchandising and endorsement mix.
The report further says that branded virtual items today make up just 1% of the $3.1 billion virtual goods market, meaning there’s plenty of room for growth should other artists/brands choose to participate.