Online sale of digital content breaks $1 billion in 2009

Casual gaming helps drive record profits in 2009

A new study published last month claims revenue from the sale of digital content in games like Mafia Wars and Battlefield Heroes will be over $1 billion by the end of 2009. Top reasons for the surge (more than double last year's record) include an expanding population of casual gamers and the increasing sophistication of casual games on platforms like Facebook.

According to a recent Financial Times article, financial analysts Justin Smith and Charles Hudson monitored the sale of virtual goods across gaming platforms like Facebook, Second Life, Xbox Live and the iPhone App Store. “I don’t know anyone who expected it to grow this fast,” said Smith in an interview with GamesBeat. “The Facebook platform went from zero to hundreds of millions of dollars in two and a half years. It reflects a broader shift in society where people are spending more time on casual games.”

In fact digital sales from social networking platforms like Facebook make up the lion's share of this new market, and while Facebook itself generates respectable revenue from the sale of virtual gifts 80 percent of Facebook sales come through third-party games like Farmville. Zynga, Playdom and Playfish alone are responsible for more than $300 million in sales of virtual goods this year. "Developers figured out that there were tons of people who would never go to a [dedicated] games site," said Charles Hudson. "But if you put games in front of them, they're happy to play [and pay.]"