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Does your avatar want a Volvo?

Social network games are big money, and name-brand products are joining the quest to make real dollars from virtual goods.

By Teresa Mears Sep 10, 2010 7:34PM

Do you ever feel as if you're the only person in the world not playing Farmville? We probably should pretend an elitist disdain, but really, the lonely black sheep is SO cute, and I always did like playing with paper dolls.

 

The truth is that virtual reality games are big business, such big business that major companies are joining up.

 

Volvo just started working with MyTown, an iPhone game that sounds like a cross between Monopoly and Foursquare. MTV is on MallWorld, a Facebook shopping game (which sounds a lot like paper dolls for adults). My paper doll (call it an avatar if you want) would LOVE a virtual Volvo, but she'll pass on MTV's replica of Beyonce's diamond ring. Post continues after video.

By putting their virtual goods into online fantasy games, brands are hoping to persuade players to buy their real-world products, The New York Times reports. One reason companies are embracing online games is because they see them as a way to reach the under-40 crowd, some of whom still can afford to make discretionary purchases, market research analyst Marshal Cohen told the Times.

 

"It's all about constant connectivity," he said. "People live in real time, and established brands have to find ways to keep in touch."

 

That doesn't mean everyone's paper doll is going to automatically check into the Volvo dealership on MyTown and drive off in a Volvo sedan, even if no real money is involved. Ravi Mehta, vice president for products at Viximo, which provides social gaming platforms, explained it this way:

Branded virtual goods have to be identifiable and have a real world relevance. They are driven by the relevance to the purchaser. Paris Hilton has people who buy her virtual goods because they are fans and want to identify with her, her hair, her place in pop culture.

If your paper doll doesn't like the Paris Hilton Chihuahua, perhaps it would like the Snoop Dogg virtual Doberman. According to the Times, the hip-hop artist has made $250,000 in two years selling nonexistent dogs and other branded virtual bling.

 

That's right, more and more people are paying real money for items that don't exist. Many of the games, including Farmville, are free to play on one level but you can improve your level of play by using real money.

Social media games are expected to generate $1.6 billion in revenue this year, up 55% from last year, NPR reported recently. The radio network cited a poll that says 20% of Americans have played a game on a social network site in the last three months.

 

Unlike the video games and fantasy games of old, which appealed mostly to teenage boys and young men, today's social media games appeal to both men and women of all ages. NPR related the story of a woman who had to drive 60 miles to Target to buy her 80-something grandmother a $30 Farmville gift card so she could get her virtual dog out of the Farmville pound.

 

You can see why companies would want to make their products part of this growing world.

 

Gurbaksh Chahal, the CEO of gWallet , a virtual currency company, sees a major role for name-brand goods in social network games. He explained his views in a guest essay on TechCrunch:

Brands are already a prominent part of the social Web. Facebook users post branded gifts on each other's walls -- paid for with real money -- and become fans of those brands' pages. And why wouldn't they? The essence of social networking is the expression and projection of one's identity, and brand affinity is a central theme of nearly every modern consumer's persona. Why buy a Gucci dress when you can get the same look from DKNY or even J Crew? Because it helps you express something different, and feel better doing it. Virtual goods are no different, except they don't cost as much. Already, branded virtual goods are clicked 10 times more often than non-branded equivalents. In this light, it isn't hard to visualize the virtual marketplace of the near future.

Fess up -- do you play Farmville, MallWorld, MyTown or any other social networking game? Do you ever use real money? Or do you think people who play these online games are lunatics? What kind of car does your paper doll drive?

 

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