Virtual Goods Summit 2008 & the affect of the economic downturn on the social gaming industry

I was lucky to attend the virtual goods summit 2008 in San Francisco last week. There were alot of facebook app developers in attendance. No doubt that with the economic downturn, virtual goods and virtual currency will play an important part of most social apps ability to survive.

Nearly every panel brought up the question of how the economic problems of the country would affect the industry. I agree with the panelists that the gaming and social entertainment industries should be least affected by the downturn but that families will obviously have less money to spend and thus children's allowances may be tightened.

Teenagers and children aren't going to be losing their jobs (since they don't have jobs in the first place). The demand for interactive entertainment only increases as people travel less and tend to stay at home more.

People often quote the virtual goods industry as being $1.5 billion dollars large. I'd say that seems small if we are talking about world wide demand.
- in China alone it is estimated that virtual currency is a $900MM business
- Maplestory has made $30MM in the US this year. In 2005, Nexon reported $250MM in revenue.
- Offerpal CEO, Anul Shukla, estimated demand for virtual currency through offers and signups was between $2-6 billion.