DISQUS

spanky · 1 year ago

imvu - already largest, and it's all UGC (cafepress model - hard to compete against)

Andrew Chen · 1 year ago

i agree with you that the IMVU model is compelling, but my point is that there's still a lot to be done in terms of how they (or any other game I've seen) merchandises, cross-sells, and otherwise quantitatively drives revenue like Amazon.com...

spanky · 1 year ago

Now I understand :) Yes, imvu (we, full disclosure) has a ways to go in terms of it's e-commerce. But where do you put resources when your footprint spreads across so many paradigms - 3D technology, social networking, UGC, real-time chat, and e-commerce (virtual goods)? But I agree - virtual catalogs will at some point "borrow" features from the Amazons out there.

Andrew Chen · 1 year ago

cool, I really admire IMVU. very cool.
Yep, I think it'll take some time for the category for mature a bit more, which will cause a few companies to start going deeper into the tech. But early on, even simpler implementations do great, so there's less incentive to optimize the revenue streams.

Darius K. · 1 year ago

Check out Viximo.com -- they're in the virtual goods space and are trying to hit many of the points you bring up.

Andrew Chen · 1 year ago

very cool, thanks for the tip. I got a bunch of suggestions to look at them.

nabeel · 1 year ago

Viximo is a good target. And don't overlook the tools that artists and engineers already use in the game business all the time for similar use cases, Turbo Squid.

ventureexplorer · 1 year ago

There are a couple of key differences between virtual goods and "real" goods ... Virtual goods are usually only useful inside a closed ecosystem, and their value is directly correlated to the scarcity that the ecosystem owner can enforce, i.e, interoperability and transferability of virtual goods across games or virtual worlds faces many technical and business challenges. Secondly, the virtual goods economy is so damn small compared to the "real economy" that companies trying to be virtual goods marketplaces have a real scaling issue

Andrew Chen · 1 year ago

in fact, I'd extend that distinction to all digital goods (including media, software, etc.) when comparing to "real" goods. Although in the past the distribution of digital content has been tied to the medium delivering it (disks, CDs, DVDs, etc), as people can download their stuff on-demand that tie weakens. Then the only thing left is whatever scarcity can be imposed relative to the system that contains it, as you say.

frosty · 1 year ago

i think the issue is who can bring 7 or 8 big virtual world together and start selling goods for all of them.

Unless you have the merchants who bring in the goods, users won't come to buy it.

JoeLudwig · 1 year ago

I don't think there will be an Amazon-like dominant storefront for virtual goods. A huge part of Amazon's power in online retail comes from their incredible proficiency with inventory management, and that disappears entirely with virtual goods.

Of course if someone can provide a microtransaction platform with reasonable overhead at less than a dollar, they will likely become very popular with developers. If they play their cards right they could become the de-facto standard storefront by fir aggregating currency and then aggregating catalogs that use that currency.

Andrew Chen · 1 year ago

I think amazon is part inventory management - they are certainly smart at that - but there's also a big component which is the merchandising aspect. I agree with you that it's not clear if it'll be one big distributed player or if one store does it incredibly well - I think it has the potential to be the latter, as Google both operates a destination site and also has an ad network.

As I listed (repeated below), many of the following technologies are non-trivial and also completely merchandising-based (and doesn't relate to inventory management at all):

* Product recommendations
* Price testing
* Product bundling
* Search, browse, and navigational hierarchy
* Reviews, ratings, lists, and metadata
* Affiliate programs
* Ad targeting
* etc.

Ken Go · 1 year ago

You will definitely see more advanced ecommerce techniques in virtual item stores in the next year as the industry matures and as larger players enter the virtual world/ virtual item space. The industry is still very wide open and most players are involved in a land grab to gain the most market share. Eventually there will be a shifted focus by these companies from just launching worlds/games to optimizing their businesses. Personalization and targeting based on game situation will be very high on their lists.

Many virtual item stores already have product bundling, just not very good ways of promoting those bundles. Many companies do price testing, but do not have very good tools to do so.

There are also other factors to consider in why many of the techniques you've mentioned have not been widely implemented. The microtransaction model lends itself to impulse purchasing (since a user has already submitted a credit card transaction, has virtual currency and the items usually cost very little). Thus even the inclusion of a shopping cart is a widely debated topic.

Since the bulk of virtual item sales are occurring in games and virtual worlds where users are immersed in the fiction of the world, many people contest that adding search or ratings might break the game fiction. I do think that many people will begin experimenting with search and reviews very soon. But many will not.

Microsoft Xbox live is the best positioned in the console world to provide such a platform to console games. It already does already provide games with a currency system and a virtual item catalog.

Playspan and Live Gamer are duking it out for supremacy in the PC games virtual item secondary market space. They are the closest you will see to a cross game, cross currency exchange in the foreseeable future.

Facebook is also positioned well in the casual browser based games market. It already has a social platform, targeted ad system, and is rumored to be working on a virtual currency.

From a pure storefront perspective, Digital River is a storefront provider that specializes in ecommerce software delivery that is also getting into gaming.

Andrew Chen · 1 year ago

great thoughts! Thank you.

fatfoogoo · 1 year ago

Hi Andrew! Thanks for putting this discussion out on the table, as it's obviously one that interests us very much. While there continue to be great developments in tailoring a virtual world economy, will publishers really be willing to release control of their in game
ecosystem to an outside provider? Or...would they rather implement an entire primary and secondary marketplace themselves?

Which brings up the next question of, how much are they going to allocate to development of these services. Obviously, in today's market, it's vital for publishers to diversify revenue streams, but for a number it's simply a question of how soon can they bring the
product to market?

At fatfoogoo we believe in providing a set of tools to the gaming community, allowing game operators to build their own amazon in-game. Or their own ebay in-game. Or a combination of both. We package it in a plug-n-play model, with the ability to roll out primary or secondary market stores within a minimum timeframe.

Yoy Moblile · 1 year ago

Maybe my avitar can dance, because I cannot.

Avatar · 1 year ago

PlaySpan (http://playspan.com/) seems to be best suited to be the Amazon of virtual goods.

From their homepage, it appears that they have all the bases covered. They are making a publisher to player (b2c) and a player to player (c2c) play.

superdanch · 1 year ago

Being involved with this industry of free2play microtransaction based online games (www.ijji.com) this is something that we consider many times over. Based on what I've seen, PlaySpan does seem to be positioned to be that Amazon.com, although I would equate it more to Ebay than Amazon.

Assuming we are not thinking about selling play currency, only assets matter. With virtual assets there is technically no shortage of supply, but many mmorpg's depend on a strong economy system, i.e. rare items. This then factors into the supply and thus my closer comparison to Ebay than Amazon.