Today PlaySpan CEO Karl Mehta told ThinkEquity analyst Atul Bagga that virtual goods transactions at his online payment processing company are up 100% this year. With an estimated 75% of the company’s revenue coming from the US and Europe this supports our estimate of 100% to 150% growth for the overall virtual goods industry in the US and Western Europe this year.
Online/social gaming and virtual goods sales are one of the fastest-growing aspects of the gaming industry, with profit margins that can exceed 80%.
Other highlights from the conversation:
- The company has done $100 million in transactions during the past twelve months. Given estimated market share of anywhere from 15% to 30% this supports our estimate of about $500 million in virtual goods sales in the US and Western Europe this year.
- 200 million people have bought virtual goods in recent years. This was higher than we would have expected given our findings that about 5% of all gamers actually buy virtual goods.
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