It seems Habbo’s virtual economy isn’t under recession. Instead, the virtual goods business seems to be booming for Habbo.
While most other social networks are trying to get into virtual goods and finding ways to monetize international audience, Habbo is enjoying being the leader in the space. In 2008, Habbo generated $74 million in revenues from selling virtual goods and advertising.
According to Sulake, the parent company of Habbo, virtual goods were in very high demand during December 2008, causing the sales to surge by 20%.
Timo Soininen, CEO of Sulake Corporation, issued the following statement:
“Our success in 2008 was a realization of the hard work we have put into Habbo. Constant site updates, usability improvements and a refresh of avatar clothing and accessories have all contributed to boosting our user experience and numbers. More teens than ever are visiting Habbo and they are staying longer.”
“We are confident that our Habbo business model, which is based primarily on user sales and supported by advertising, is a clear strength in the current economic climate. We do see opportunity to grow our advertising revenue with advertisers looking for targeted and cost effective social media solutions. Furthermore, IRC-Galleria, our social networking service for young adults, has continued to grow both in user and advertising revenue.”
Recently several other social networks are focusing on turning to virtual goods as a new source of revenue. Hi5, Imeem, Facebook and several others have been trying to make the virtual economy model work. Imeem, for instance, launched its own virtual currency. If the recently announced layoffs at Hi5 and Imeem are any indication of the success, then it’s safe to say the model doesn’t seem to be working for them.
The primary difference between Habbo and other social networks that are failing with virtual goods is that Habbo is built around virtual goods while others are trying to incorporate virtual goods into their own “ecosystem” to help members generate social capital.
Tags: habbo, hi5, imeem, virtual goods
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