Virtual Goods Booming in Asia (25X Bigger than American Market?)

April 20th, 2009

By Christopher Mack

While virtual goods-based business models are gaining popularity in Western countries, the market remains much larger in Asia. How much larger?

According to an update from +8* | Plus Eight Star, Asia’s total annual virtual goods economy might be worth more than $5 billion, which is 25 times larger than the recently estimated $200 million in the US.

Asia’s tremendous numbers are led by China. Pearl Research estimated that online gaming revenues in China hovers around $2.8 billion total, with 70 percent of that being generated through virtual goods. TenCent, Changyou, The9, Netease, Shanda, and Giant have earned more than $200 million, respectively, in revenue with gross margins of about 50%. TenCent specifically tallied $1 billion in revenue for 2008, with 90 percent coming from virtual goods. Nearly 300 million people are now online in China.

Numbers are comparatively smaller in Japan, according to the report, but two social networks from that country, Gree and Mobile Game Town, are posting revenues of $60 million and $250 million respectively, with 80 percent of their revenue stemming from virtual goods. Korean companies earned about $1 billion.

As a side note, the report also provided an interesting breakdown of the most popular online games’ peak concurrent users. These numbers are truly impressive:

Netease’s Fantasy Westward Journey – 1.8 million
Giant’s Zhengtu Online – 1.5 million
TenCent’s Dungeon and Fighter – 1.2 million
Blizzard’s World of Warcraft – 1 million

To dig deeper into the social gaming market, check out our new report: Inside Virtual Goods: The Future of Social Gaming 2010.

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Filed in Business, China, Metrics, RPG, Social Games, VirtualGoods, international

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9 Responses to “Virtual Goods Booming in Asia (25X Bigger than American Market?)”

WhatsYourPlace » Blog Archive » The Best Blogs on Virtual Goods Says:
May 14th, 2009 at 11:01 am
[...] Inside Social Games (786) – tracking the convergence of social platforms and games – recommended: Virtual Goods booming in Asia [...]
Tencent Virtual Goods Revenues Continue to Grow in Q1 2009 Says:
May 26th, 2009 at 8:05 am
[...] $200 million in the United States, the overall value is dwarfed by the Asian market, which is 25 times larger at $5 billion. And of course, of the most successful Asian companies monetizing through virtual [...]
Facebook recibe inversión estratégica de conglomerado ruso: Análisis Says:
May 26th, 2009 at 9:58 pm
[...] una economía virtual de USD$200 millones al año en Estados Unidos en bienes virtuales , los US$ 5000 millones que se venderían en el 2009 en bienes virtuales en Asia podrían parecer irreales. Pero si la [...]
Virtual Currency Extortion Leads to Three Years of Prison in China Says:
June 11th, 2009 at 12:01 pm
[...] on reports from +8* | Plus Eight Star, more than 300 million people currently are playing online games in China today. The virtual goods [...]
Virtual Worlds News » Archive du blog » Un cadre fiscal pour le v-business en Chine et en Suède Says:
July 31st, 2009 at 12:30 am
[...] Et visiblement ce n’est qu’un début car outre les biens virtuels, c’est le marché de jeu en ligne que le gouvernement veut contrôler. Un marché qui est estimé entre 2,8 et 5 milliards de $ selon les sources (Virtual Goods Booming in Asia – 25X Bigger than American Market?). [...]
Tencent’s Explosive Earnings Powered by Virtual Goods and Social Games Says:
August 17th, 2009 at 7:01 am
[...] has been nothing short of astonishing. As we reported in April, it’s estimated that the Asian market for virtual goods sits at around $5 billion, a figure that is around 25 times larger than the approximate $200 million in the United States. In [...]
Virtual Goods Now Funding Most Development on the Facebook Platform Says:
August 17th, 2009 at 9:42 am
[...] for years – one recent estimate pinned total virtual goods revenues in Asia at $5 billion last year, 25x the US estimate of $200 million for 2008. But the market is really gaining steam in the US this year. Just last week, Piper Jaffray released [...]
Mature Korean Gaming Companies Still Seeing Revenue Growth Says:
September 4th, 2009 at 8:02 am
[...] within social games in the US and many other parts of the world, but the business model has already matured in parts of Asia. But are established gaming companies still able to grow revenues? Recent statements by Korean [...]
Harvesting Virtual Acorns in East Asia: A Study of Virtual Goods Internationalization « Says:
September 25th, 2009 at 8:05 pm
[...] The virtual goods market in East Asia is estimated at $5 billion USD. [...]