Analyst: Virtual Goods, Ads To Drive U.S. Social Game Revenues To $1.1B In 2011

The U.S. social gaming market will generate nearly $1.1 billion in 2011, mostly due to growth in virtual goods and advertising revenues, according to research firm eMarketer. Based on that prediction, social gaming revenues this year will grow 27.7 percent from $856 million, eMarketer's estimate for 2010. The group believes virtual goods sales will jump 28 percent from $510 million last year to $653 million in 2011. The analyst firm expects advertising revenues from social games to grow even faster, making as much as $192 million this year, 60 percent more compared to $120 million in 2010. Lead-generation offers, which allow players to earn free virtual currency after they participate in different activities (e.g. filling out surveys, signing up for free subscriptions, watching videos), will bring in $248 million in 2011, 10 percent more than $225 million in 2010. In 2012, eMarketer believes the social games industry will continue to expand and generate more than $1.3 billion in revenues -- $792 million from virtual goods, $271 million from advertising, and $260 million from lead-generation offers. Furthermore, it notes that almost 62 million internet users in the U.S., or 27 percent of the online audience, will play at least one social game monthly this year, up from 53 million in 2010. "Even though fewer than 6 percent of US social gamers spend money on virtual items, these avid players will produce revenues of $653 million in the US alone this year,” says Paul Verna, author of eMarketer's upcoming Social Gaming: Marketers Make Their Moves report. He adds, "This is the largest segment of the social gaming economy, and one that marketers are increasingly turning to as a branding vehicle. We expect to see more branded virtual goods as social gaming matures over the next two years."