Page last updated at 10:32 GMT, Thursday, 22 October 2009 11:32 UK

Sales of virtual goods boom in US

Iphone, Getty
Smartphones such as the iPhone are driving sales of virtual goods

Americans look set to spend $1bn (£600m) on virtual goods in 2009, claims a report.

The cash will be spent on add-ons for online games, digital gifts and other items that exist only as data.

Total spend on such items is expected to be up by 100% over 2008 and to double again by the end of 2010, said the analysts behind the report.

In related news, Facebook is updating its gift store so it offers a wider variety of virtual presents.

Social games

Written by games analysts Justin Smith and Charles Hudson, the report says that virtual goods are proving ever more popular with gamers and users of social network sites such as Facebook.

Many players of massively multiplayer online games such as World of Warcraft, spend real money on virtual currency to ensure their in-game avatars have the best gear.

Some games in Asia also use the so-called micro-payments model to fund their games in lieu of a monthly subscription fee.

Now, people playing social games such as virtual agriculture simulation Farmville on Facebook are using real cash to purchase game dollars for additions to their farm. Firms such as Zynga, Playdom and Playfish are all growing fast on the back of the rise in social gaming.

The purchase of virtual goods on smartphones, such as Apple's iPhone, are also starting to take off, said the report.

The figures in the report deal only with sales in the US. Introducing the report, the authors said: "While virtual goods have been driving revenues in Asia and Europe for years, 2009 will be remembered as the year virtual goods-based businesses began to scale in the United States."

Facebook has announced an overhaul of its virtual gift shop to expand the range of digital presents members can buy and send to friends, family and colleagues.

As well as virtual birthday cakes and pints of beer, Facebook users can now also send music tracks to each other.

The music service will initially only be available in the US. One Facebook credit (10 US cents/6p) buys one streamed song. Ten credits buys a downloadable MP3.

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