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Doug Levin and I just co-wrote a blog post titled Virtual Goods: A Market Assessment describing the virtual goods market, specifically looking at the role that social games and brands are playing in the rise of social games. Here is an excerpt:

According to market-research firm In-Stat, VG revenue is expected to hit $7.3 billion this year alone. This figure far exceeds estimates from many leading research and investment banking firms, and is in large part tied to the overwhelming success and growth of social games. At this market level, virtual goods have evolved into a major revenue stream from the media and entertainment industry. As consumers spend more of their leisure time online, VGs are reaping the benefit and becoming a key aspect of lifestyle spending. Accordingly to Nielsen, U.S. consumers already spend a higher share of wallet on game content –of which VGs are a key part – than on print media, premium TV packages, movie rentals, and music.

The rapid rise of social games has been a hot topic in the technology scene; however, this explosive growth has led some critics to suggest that social gaming is a bubble that is bound to burst. But just as blogs, tweets, and YouTube videos have become a fixture of the new web, so too will social games. I think we will come to regard social gaming as no less critical to social networks as wall posts, photo sharing, and friending. My guest post on Mashable, Cracking the Mainstream: Why Social Gaming Is More Than Just a Fad, discusses why social gaming is here to stay.

About

Virtual Goods Insider covers the burgeoning economy of in-game items, avatar customization, virtual gifts, digital media, and other goods that exist purely in digital form. It is written and published by Ravi Mehta, a veteran of the online gaming and consumer media industries.

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