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Video: Kongregate CEO on the Growth of Virtual Goods

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A new study from DFC Intelligence and Live Gamer shows that gamers in North America and Europe are now “largely comfortable” with purchasing digital content such as virtual currency and in-game goods.

According to the survey of roughly 5,000 gamers, 60 percent of respondents said that “they had purchased an in-game good that was not a full game.” (It should be noted that Live Gamer provides a product to conduct microtransactions in places like games, so factor that into the overall assessment of the data.) Last July, a Magid study commissioned by PlaySpan found that roughly 12 percent of Americans had purchased a virtual item.

Additionally, DFC Intelligence says that many of the games that use a virtual item model fall under a Massively Multiplayer Online Game (MMOG) Lite category. These are games that have a persistent environment and allow you to build characters, but don’t have the monthly fees associated with large MMOGs. DFC predicts the so-called MMOG Lite market will grow to $3 billion by 2015 from roughly $800 million in 2009.

Riding that wave of virtual goods growth is Kongregate, a free online gaming site that aggregates independent games from across the web (including its new MMOG Lite game, Remnants of Skystone. Kongregate says that it’s seen its virtual goods sales rise 30 percent per month and that they represent a third of its total revenue now (the company wouldn’t provide any more specific numbers).

Kongregate CEO Jim Greer came by GigaOM HQ last week for a quick video chat where he talked up such topics as the role of virtual goods in Kongregate’s business, the issue of chargebacks with virtual goods, and how he plans to keep Kongregate as a destination site and not shift to a more Facebook-centric model.

For more in-depth analysis on MMOs, check out the report Virtual Worlds: Trends and Opportunities at our subscription research service, GigaOM Pro.

4 Responses to “Video: Kongregate CEO on the Growth of Virtual Goods”

  1. Chris Albrecht

    Hey Jeremy,

    You aren’t missing anything. For some reason Final Cut exported some dead space when I edited the video down. I’ll re-encode and re-upload.


  2. The video seems to be missing 2 minutes between 8:30 and 10:20. Good interview though! Jim does a nice job summing up the main points of Zynga versus other online game publishers.

    Thought it was interesting that their chargeback rate is 0.5%, Kongregate is leaving a lot of $$ on the table with restrictive customer acquisition & fraud screening.