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Web 2.0 Weekly - Oct. 15, 2009


SOCIAL GAMING POTENTIALLY A $1.6 BILLION MARKET BY 2010 Based on data from Inside Virtual Goods, the market for virtual goods – that is, the non-physical objects associated with social networks and online gaming, which are purchased and exchanged on the internet – will soon exceed $1 billion, up 50% year-over-year. Zynga, maker of Farmville, is rumoured to be generating $200 million in revenue, while Playdom, maker of Caf� World, reportedly has generated $50 million in sales, and Playfish is rumoured to have reached the $75 million revenue level. Not coincidentally, in the past three months, gaming has become the top financing draw in our universe. Given the gains in monthly users that social networking sites that run many of these games are reporting (see ”Top 20 Games of the Week”), and noting the significant positive valuation impact of a rapidly growing unique user base that we have discussed frequently in this periodical, we speculate that funds will continue to flow in the direction of these developers. Indeed, rumours abound that Electronic Arts is poised to announce the acquisition of one or more of the top social gaming developers.

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