Virtual Gifting Leads Retail This Holiday Season

Cellufun Predicts ’10 Will Be the Year of the Mobile Social and Gaming Network

With the National Retail Federation forecasting a 1 percent drop in holiday sales this year, one bright spot has emerged from the otherwise bleak retail landscape. Companies, like Cellufun the world’s largest mobile and social gaming community, sold more than $1 billion in virtual goods in the United States in 2009. Analysts say that number will likely double in 2010 as the country scrambles to catch up with an industry that is valued at $5 billion worldwide.

Cellufun experienced success with the introduction of virtual gifting this holiday season. Buoyed by an early push to encourage shopping throughout December, Cellufun executives say their tally in the fourth quarter is on track to trump earlier earnings reports that valued the total number of virtual transactions during the third quarter of 2009 at 2.5 million. While the data will not be finalized until well after the holidays, administrators are encouraged by early returns. Cellufun boosted virtual shopping this holiday season by hosting a Black Friday sale. All virtual goods on Cellufun were 50 percent off. Virtual goods transactions during the sale were six times greater than they had been over any other 24 hour period.

Experts say 2010 will mark a dramatic change in social networking with the surge of popularity in virtual goods purchasing and the increase in the number of consumers accessing social networking sites like Cellufun via cell phones.

The Financial Times recently reported that the majority of virtual goods industry growth is expected to occur in social games. Nielsen recorded an astonishing 187 percent increase in the number of users accessing the mobile Web over their phones from July 2008 to July 2009. Based on their report, the agency, which tracks media trends, said social networking is among the fastest-growing activities on mobile devices.

Cellufun is poised to be at the forefront of both virtual goods sales and social networking in the coming year. The site currently offers over 5,000 items for sale and will soon allow individual members or companies to author and sell their own virtual goods in their mobile marketplace, similar to an eBay-like open market.

“2010 will be the year the mobile social and gaming network. There are a number of factors converging in technology and our culture,” said Cellufun CEO Neil Edwards. “Cellufun is actually on track to double its sizable user base of 2.7 million in the next few months.”

Cellufun’s recent success with virtual goods is indicative of an overall trend that has taken shape over the past few years in Asia, where income from virtual goods sales actually surpass revenue generated through online advertising.

This is big news for companies like Cellufun, who up until now, have solely relied on revenue from advertising. Executives for the mobile virtual world predict that by the end of 2010 two-thirds of total revenue will come from the sales of virtual goods.