Facebook Selling Virtual Gifts at $30-40 Million/Year Rate
Facebook has been pushing its virtual gifts prominently on the home page over the last year. Why? Because it’s becoming a nice secondary revenue stream for the company, doing somewhere around $3 million/month in sales these days.
That’s the conclusion Jeremy Liew over at Lightspeed VP came to after logging inventory levels in Facebook’s virtual goods store in recent months. Compared to the $15 million/year run rate he estimated earlier this year, Facebook’s digital goods business has appeared to double to between $30-40 million/year at the current rate.
While the assumptions Liew makes in running the data leave significant margin for error (data is only available for a small percentage of store items, seasonality, etc.), the fundamental trend shows a large growth in Facebook’s in-house digital goods business. With about 100 million active users, Facebook is doing $0.03 per user per month in virtual gifts transactional revenue.
The trend also bodes well for those application developers hoping to make a living on virtual goods transactions on the Facebook Platform. Like Facebook itself, many application developers are turning to virtual goods as an important secondary revenue stream to advertising – and many social game developers are creating sophisticated economies almost entirely based on virtual goods transactions.
Despite the existence of free alternatives, Facebook is showing that there is significant demand and payment infrastructure in place for its premium gifts. The company could become an even more important player in digital goods by providing virtual goods sales infrastructure for developers whenever its application payment platform is ready.
Related Inside Facebook and Inside Social Games Resources: