Enthusiasm for online games, the surging popularity of social networks, and the ongoing fascination with Facebook Credits, is driving interest in virtual currency with online sellers in the U.S. Yet virtual currencies are not a new phenomenon. They have been popular in Asia and to a lesser degree in Europe for many years and have been an integral element of online game for over a decade. In this report Glenbrook examines how leading game developers and social networks utilize virtual currencies to drive monetization.
Our focus is on describing what virtual currencies are, how they work, who uses them, and why. We describe the general characteristics and key attributes of a typical virtual currency program, demonstrating the strategic choices facing online sites as they contemplate whether or not a virtual currency is an attractive addition to their monetization strategy.
Our investigation spans multiple dimensions — how virtual currencies are positioned in the monetization mix, how they are distributed to and purchased by end-users, and how online consumers and third parties use them. Against this backdrop, we explore the similarities and differences between Facebook Credits, Microsoft Point, PlaySpan Ultimate Points, Tencent Q Coin, Second Life Linden Dollars, World of Warcraft Gold, various Zynga currencies, and the experimental BitCoin digital currency.
This report does not examine virtual currency infrastructure providers or explain the specific mechanics of how a gaming site or social network implements a virtual currency. Instead, our intention is to demonstrate how a wide range of online properties have implemented virtual currencies and illustrate the business choices that they have made.
Analysts: Russ Jones and Erin McCune
Revision Date: February 2012
Number of Pages: 45
Price: $695 USD
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Table of Contents
VIRTUAL CURRENCY BACKGROUND
What is a Virtual Currency?
Who Uses Virtual Currencies and Why?
How Are Virtual Currencies Used?
VIRTUAL CURRENCY COMPARISON CRITERIA
Variation by Channel
Variation by Partner
Variation by Tender Type
Point of Purchase
Balance Inquiry and Account Dashboard
Balance Auto Top-Up
Supported Use Cases
Expiration and Non-Use
Third Party Usage
VIRTUAL CURRENCY PROGRAM COMPARISONS
PlaySpan Ultimate Points
Tencent Q Coins
Second Life Linden Dollars
World of Warcraft Gold
Zynga (Various Currencies)
About the Analysts