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Jonathan Shea's List: Virtual Items Economy
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“They have what I call the largest virtual park in China,” said Richard Ji, an analyst at Morgan Stanley. “And in China, the No. 1 priority for Internet users is entertainment; in the U.S., it’s information. That’s why Google is dominant in the U.S., but Tencent rules China.”
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Despite Neopets' inauspicious beginnings as a virtual pet site created by college students Adam Powell and Donna Williams, it's turned into a youth culture force. About 80 percent of the site's users are under 18, and as of November 2007, there are over 150 million registered accounts. But Neopets isn't just about showing kids a good time. According to Neopets' Senior Vice President and General Manager, Kyra Reppen, children age 6-14 have access to $60 billion of their parents' money, so there is certainly much to gain. Banner ads and sponsorship have been their "primary business model," and business has been very good, to the tune of a $160 million buyout.
But the site wasn't always the juggernaut it's become. In the beginning, Powell and Williams promised to never use banner ads and didn't charge for special features on the site. Instead, they relied on "immersive advertising," a term they trademarked, which meant their ad revenue depended on companies sponsoring minigames and items rather than direct advertising. Other sources included branded destinations within the site's virtual world. Players could sign up for offers or surveys for "Neopoints," the in-game currency, as well. Never once did a player have to stare at a basic ad.
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$160 million
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Hundreds of thousands of avid players are thrilled with the hardcore game and eagerly awaiting the new items available at the shop’s launch. With the opening of the in-game 2Moons Shop, players will be able to use Acclaim Coins to purchase all-new optional game items designed to enhance gameplay. The shop’s new virtual items will provide players with unique game features and optional upgrades for the first time ever.
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