While the “real” economy has been tumbling for the past two years or so, social applications, online gaming, and the virtual economy have proven to be fairly resilient in the face of the economic slump. Some reasons for this resilience could be that people have more free time, and that they generally don’t mind making small payments on virtual goods. The worldwide virtual goods market (which is a subset of the virtual economy) is estimated to be around $5 billion, with 80% coming from Asia (China, South Korea, and Japan) and only $200 million to 400 million from the US. Several players have emerged to take advantage of this opportunity. Third-party developers on Facebook are projected to make $500 million this year, and while most end users think of social applications (and games) as the only players in the space, there are several others. In this article, I will touch on only one missing piece of the puzzle: the virtual economy. Next week, I will cover some other players which together with social apps and online gaming make up the social media and online gaming ecosystem. Read the full article »

After reviewing social gaming companies, I move on to RockYou and LivingSocial — two very successful companies in the social applications space — to find out more about the similarities and differences between social games and apps.

You can see from the top Facebook apps list here that although they are fundamentally different, apps and games that are popular on Facebook and other social media are generally entertainment-based rather than utility-based. What’s more, on the iPhone, one out of three apps is an entertainment app or a game. Let’s look at some specific similarities and differences. Read the full article »