The total US market size for virtual goods will reach $1.6 billion in 2010, with social gaming contributing about half -- $835 million -- of that total, according to industry research by Inside Network.

"2009 was the year that casual games like Zynga's popular FarmVille took over the major social platforms and changed the way millions of people socialized with friends online. Casual games introduced a rich, new way of interacting with friends on social networks, and saw the highest engagement numbers that the online entertainment industry has ever witnessed," says Justin Smith, founder of Inside Network.

"With tens of millions of returning users, and millions of new visitors daily, it is no wonder that the social gaming industry saw significant M&A activity: an up-to-$400 million acquisition of Playfish by Electronic Arts, and hundreds of millions of dollars in additional venture investments. Social games are now impacting businesses across the media landscape," adds Charles Hudson, VP of Business Development at Serious Business, and host of the annual Virtual Goods Summit.

In 2009, social games began to show that immense value can be created on top of social networks. According to the study, 2010 will be an even more important year as social gaming, powered by virtual goods, becomes this year's industry to watch.

With research based on interviews with top executives and entrepreneurs in social gaming and virtual goods, Smith and Hudson contend that the 2010 virtual goods industry will be bigger than previously predicted, and that social gaming will make up the largest and fastest growing portion of the total market.  

About the market research study

"Inside Virtual Goods: The Future of Social Gaming 2010" takes an inside look at the present state of social games and the future of what's shaping up to be a very fundamentally strong and profitable industry. The report is focused on the following areas: 1. Emerging Social Game Development and Studio Models; 2. Social Game Design and Mechanics; 3. Monetization Data and Payment Trends; 4. Facebook's Platform Changes, Credits, and What's In Store for the Future.

About Inside Network

Inside Network is the first company dedicated to providing news and market research to the Facebook platform and social gaming ecosystem. Inside Network serves developers, marketers, and analysts through its industry-leading blogs, Inside Facebook and Inside Social Games, research services, including the Inside Virtual Goods and Facebook Marketing Bible series, and data services, AppData and PageData. Inside Network is based in Palo Alto, CA, and was founded by Justin Smith in 2006.

» Story on Analyst Firm Website

Digg this    del.icio.us Tweet This