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Over $69M Invested In 10 Virtual Goods Businesses In Q1 2009 Austin, TEXAS - May 27, 2009 - Today Engage Digital, through its blog Virtual Goods News, announced the findings from a comprehensive study of publicly disclosed transactions which shows that investors put approximately $69 million in ten companies that monetize at least in part through sales of virtual currency and goods in Q1 '09. In addition, there were two investments of an undisclosed amount and two further investments of an undisclosed amount that were part of acquisitions. The dominant trend in this year’s data is stability. The $69.1 million in investments in Q1 '09 is nearly unchanged from the $69 million invested in this space during both Q3 and Q4 '08. Likewise, the number of businesses receiving investment funds doesn't represent a substantial change from the 12 that received investment in Q3 '08 and the 7 that received investment in Q4 '08. A year-over-year comparison of the Q1 '09 investment figures to the $147.7 million invested in Q1 '08 looks more negative at first blush, perhaps even suggesting decline of over 50%. When considering the Q1 '08 figure, though, it's important to remember that $100 million of that figure is accounted for by a single unusually large investment in the Chinese game operator 9you. (In fact, that's one of the biggest investments in this space in 2008). If you remove the 9you investment before considering the numbers then the two quarters bear a stronger resemblance to each other in terms of total number and types of businesses invested in. The comparison also suggests that the virtual goods space may well have grown since Q1 '08, since that quarter only brought in $47.7 million in investments spread across 12 companies if you remove the 9you figure. Looking at the numbers this way is extremely interesting in light of shrinking investments and closings currently occurring in other tech-related fields as a result of the ongoing economic downturn. It is far too soon to say that virtual goods are “recession proof,” but this definitely indicates that growth in the virtual goods space is continuing steadily despite the downturn. Finally, it is worth noting that the $69 million figure across 10 businesses figure we are reporting is surely less than was actually spent on investment in the space during the Q1 time period. We know two investments of undisclosed amounts in Ironstar Helsinki and Meez occurred during this time period. Linden Lab’s investments in OnRez and Xstreet XL are acquisitions of an undisclosed amount, but still serve as an indicator that growth in the virtual goods space is ongoing. You can find the full list of investments here. |