Tuesday, January 11, 2011

There's Money in Virtual Goods

Virtual goods might be a viable revenue model for games developers. Tapjoy began testing out a freemium model for one of its mobile games "Tap Defense" a year ago and found that within a week, it was making six times more money going freemium than paid, based on revenue earned from sales of virtual goods or premium digital goods.

Eventually, the game was making 10 times what it was before. The market for freemium mobile apps went from about 20 a year ago to about 2,500 today, of which he said 90 percent use Tapjoy.

Tapjoy provides monetization, distribution and publishing services for social games, mobile applications, virtual worlds and other social publishers.

The Tapjoy platform includes a turnkey software library that enables mobile developers to embed fully functional virtual goods storefronts with the ability to process microtransactions. The library also comes with a built-in "pay-per-install" user acquisition program, an ad optimization layer and application analytics.

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