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Virtual goods: Who will be the Amazon.com of virtual item sales?

Web 2.0 + games
As I've previously written about, I'm hugely fascinated in the use of virtual goods to monetize social web properties. In particular, there's an increasing intersection of games and social websites as well as the people who make them. Obviously there's a lot of cross-pollination going on, particularly in the heated Facebook social gaming space. Another space where a lot of innovation is happening is the casual MMOG market, where more than a dozen venture-backed companies are coming to market in the next 12 months.

Virtual goods infrastructure
One of the opportunities that is emerging, as these companies release their product and consumers start to have a standardized set of expectations, is the virtual goods infrastructure. The interface for virtual item sales is starting to standardize. In many cases, you see common elements like:

  • Your avatar
  • A collection of items which can be navigated through
  • "Buy" buttons and other interaction with each item
  • Regardless of whether you can buy it, you can dress up your avatar with aspirational items

Yet while the interface standardizes, the rest of the process does not. In particular, how about issues like:

  • Payment policies what countries, what currencies, and how many methods?
  • Alternative payment cards (like Nexon cards in Target stores)
  • User-to-user sales
  • Number of currencies (dual? single? more?)
  • etc.

In fact, one realization is that all of this backend stuff is really just the same type of infrastructure that e-commerce sites have built for ages. And looking at the resulting analogy, one might ask: "Who's going to be the Amazon of virtual item sales?"

Let's examine what this quesiton means…

Amazon.com and where their techniques apply

Ultimately, much of Amazon's success is due to their quantitative views on personalizing the user shopping experience. This includes issues like:

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

Right now, the virtual item stores I've seen are in their infancy – there's very little sophistication relative to what's possible as shown by Amazon, at least in e-commerce.

My question: Will one particular game (or game platform) do this all right? Or will it be a third-party vendor that provides this rich set of functionality to partner games?

I'd enjoy any suggestions for companies that are looking into this space – comments and suggestions appreciated!

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