Contact: Jarrett Streebin
It turns out there’s a real business around buying and selling make-believe items online. Although it’s still early in the so-called virtual goods market, companies have already begun positioning themselves for what looks to be a fast-growing market for personalizing and developing online games. On a small scale, e-Rewards acquired Peanut Labs last week, less than two months after Google announced a purchase of its own. Peanut Labs will become part of e-Rewards’ Research Now online sampling and data-collection business unit. We expect more activity in this nascent market, which is likely to be shaped by three main players: Facebook, PayPal and Google.
Each of these tech giants has shown serious activity around virtual goods, either through organic development or acquisitions, and each has a slightly different approach to the market. Earlier this year, Facebook unveiled its Facebook Credits, a payment system for the Facebook platform. These Credits can be used to buy gold or guns in games on the platform and are even sold in gift cards at Walmart. Meanwhile, PayPal currently handles roughly 50% of the volume for virtual goods. It’s a payment option for Facebook Credits and PayPal continues to improve upon developer relations with its payment platform X and developer conference. And finally, Google bought into the space in early August with the purchase of Jambool and its virtual goods payments processor Social Gold. We will have a full look at the approaches of each of these three companies, including where they might look to buy, in a Sector IQ on virtual goods in tonight’s Daily 451 and 451 TechDealmaker sendouts.