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Susan Wu on virtual goods

June 20th, 2007 (Visited 3844 times) Tags:

Virtual Goods: the next big business model is an article by Susan Wu, who we work with (she’s at Charles River Ventures, one of our investors). It’s chock-full of juicy stats on some of the revenues that virtual item sales companies are generating. Definitely worth a read — and interesting that the article is so controversial (check out the comment thread!).

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8 Responses to “Susan Wu on virtual goods”

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  1. Techmeme wrote on November 30th, -0001 at 12:00 am:

    + Discussion: Conversation Hub, The Gong Show, Raph’s Website, reBang weblog and Master of 500 Hats

    2.
  2. reBang weblog » Blog Archive » Susan Wu Talks Virtual Goods wrote on June 20th, 2007 at 7:06 pm:

    [...] “Virtual Goods: the next big business model” (Link), when I saw it mentioned by Raph Koster’s blog (thanks, [...]

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  1. Patrick said on June 20th, 2007 at 6:44 pm:

    Maybe you should do a post on the rise and peak of a business model in use and how this corroborates to press levels. I think the next two big business models, probably in chronological order, will be skill gaming and integrated advertising. I’m sure some of you have a few you’d like to suggest?

    The thing about business models that we have to keep in mind is a) they change with the market, and b) you have to design with the business model in mind in order to make it work.

  2. Prokofy Neva said on June 20th, 2007 at 11:15 pm:

    I don’t see that the article was so controversial, Raph. It looks like just a few snarky remarks about an article in Tech Crunch being used as a kind of infomercial for the Virtual Goods summit and some people wishing to knock that — and really, these days you have to look at every blog closely because so much of the tech stuff is blogola of one sort or another, or people rushing to put in trackbacks to link their names to the names of the famous and bask in their glory, and enhance their reputation — that sort of thing. It’s a funny trick I’ve just started to notice lately, yet another habit born of Googlizing and newsfeeding.

    Yes, indeed, she has some good numbers — but I do think it’s important to point out, even though she’s bankrolling your caper, that she’s wrong about e-bay. That’s outdated news now. Didn’t e-bay create a ruling banning the sale of virtual goods — except SL land? I wonder how much they police it, does anyone know?

  3. Azaroth said on June 20th, 2007 at 11:24 pm:

    I link Raph’s blog for that very reason. I think I get 1-2 hits every time I put up a trackback. If I had ads on my blog, it’d really be paying off right now.

  4. Ola Fosheim Grøstad said on June 21st, 2007 at 1:17 am:

    The article was ok, but I am sceptical of the quoted numbers. I doubt these were made by a neutral party. Such statements without a tight definition of what “virtual goods” are make them completely useless.

    Does land in SL count? Land in SL is no more “virtual goods” than diskspace on a prominent hosting site.

    Does buying scripted stuff count? That is no more “virtual goods” than software. This is domain of very messy hype-marketing rhetorics…

    And what does the hotornot example tell us? It tells us that some developers are willing to go the route of social-porn, exploiting lonely souls who get a crush on virtual hookers. People do insanely stupid things when they have a crush. We can’t learn anything from that.

    For now I simply take note of what people I know are willing to. And most (AFAIK ALL) of the people I know are unwilling to purchase non-subtantial “virtual goods”. The teenage market is of course more willing to pay for “hot” symbols, but let’s not go completely over board on how big the future market is.

    (I am not willing to count downloadable music or software as virtual goods).

  5. csven said on June 21st, 2007 at 8:59 am:

    “For now I simply take note of what people I know are willing to.”

    That’s the big take-away for me as well.

    I also found the definition of “virtual goods” unsatisfactory. Every iTune mp3 sold is, whether you count it or not, arguably a “virtual” sale. Whether we should label/define/classify it as such, I don’t know. I don’t care. But you’re right to point out how messy this is.

    In fact, it was for that general reason that I included a trackback, because before reading the TechCrunch entry I posted something related to public perception of what constitutes “virtual” and how little thought average people likely give it.

    Thanks to Prokofy for her comments on trackbacks. I assume she was talking about me, but as a result added something to my post to clarify my reasons for adding it. And if that enhances my Reputation or whatever, maybe someday it’ll matter since I’m not currently working in this arena or talking business with people who read this stuff. Of course, if I were to get some ads for my blog… nah. Better to get on Twitter and force myself on people, “names of the famous”, and get their Attention directly.

  6. Ola Fosheim Grøstad said on June 21st, 2007 at 10:11 am:

    Csven, you are worrying too much! :-) And your comment worked better on this reader than the trackback either way. I’m going over to your blog to check out what you write about this, right now. ;-)

  7. csven said on June 21st, 2007 at 10:34 am:

    Yeah, I should probably care more. Only I’m interested in the stuff I can fab and only follow the rest to get a sense of what’s coming. And fwiw, I didn’t at the trackback to this blog; only to the TechCrunch entry, and there because I didn’t care to post a comment.

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