Soaring usage of social gaming, driven largely by the sharp rise in smartphone adoption, will push the global market for virtual goods bought from mobile social media services from $3b this year to $4.6b by 2016, according to a new report from Juniper Research.
Sales of virtual goods via mobile social media services are flourishing in Japan and China, as social gaming familiarises consumers with virtual goods, the report said.
Increasing tablet usage is also expected to provide further momentum as these devices offer a significantly better user experience for social gaming than smartphones.
The report found that any services wishing to sell virtual goods from within their app risk losing 30% of the payment value to the app store.
For virtual goods sold via social gaming this is doubly worrying, as these games are typically developed by third parties which receive around 70% of in-game spend.
According to report author Charlotte Miller, Mobile social media services have a serious monetisation problem.
"Virtual goods is one solution that has worked well in Japan and China, where consumers already have an enormous appetite for content such as clothing for avatars. The only question is: can they successfully avoid the app stores taking a slice of virtual goods revenues?" said Miller.
spend on advertising targeted at tablets is expected to account for
Almost a half of total mobile social media advertising spend by 2016 is expected to be accounted by spend on advertising targeted at tablets, the report said.
Far East and China will continue to account for the major share of mobile social media revenues, followed by North America.
