Tencent Virtual Goods Revenues Continue to Grow in Q1 2009
While virtual goods draw around $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 goods transactions is Tencent. This publicly-traded Chinese company has been pulling in millions despite the global recession. Its last statement put total revenues at $366.4 million for Q1 of 2009.
Counting just virtual goods, Tencent saw its web-based merchandise increase approximately 28 percent quarter-over-quarter and 90 percent year-over-year to $278 million.
The company states that the increase in virtual goods revenue was due primarily to the “seasonal impact of the Chinese New year holidays and winter break for students.”
Virtual goods are not expensive, with many ranging from 10 cents to $1. For players of social and online games, they are often impulse buys, much like a Snickers bar in the check-out line. That impulse, however, adds up rather quickly when you have billions of people buying them.
Tencent also makes revenue from mobile virtual goods sales and advertisements. Mobile virtual goods sales grew by 10 percent quarter-over-quarter and 52 percent year-over-year, totaling $64 million. Ad revenue suffered, however. In quarter-over-quarter revenue, ads dropped by 30 percent to $21 million.
The company earned $1 billion last year ($719 million from virtual goods).