31st January 2011 by Martin

Is Group-Buying Virtual Goods The Next Big Thing For Item Shops?

Without a doubt group buying platforms like Groupon or LivingSocial are hot right now. Groupon spectacularly rejected a $6 billion bid from Google and is the clear leader in the group-buying space at the moment. LivingSocial on the other hand recently made the news with the best selling group-buying deal ever. Over 1 million Amazon vouchers offering a 50% discount (pay $10 for a $20 voucher) have been sold on their website. No wonder, considering that for a regular Amazon user this is as good as printing money.

It made me think and I was wondering if something like this could also work for virtual items in the video games business. Shortly after we started talking about it internally, news sites reported that Facebook is planning to introduce just that (The startup Inhale Digital launched something similar several weeks ago and it will be interesting to see how Facebook’s plans will influence their strategy). One thing we immediately thought about is that such a platform would need a critical mass of users to attract potential partners. Additionally a lot of knowledge about the users is necessary to target the deals efficiently. Facebook has more than 500 million users which don’t just share which games they play on Facebook but also willingly share a lot of information about their hobbies and interests. I think it literally laughs in the face of our quickly chosen criteria.

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