I was just discussing virtual currency and the recent announcement from Zynga confirming the availability of their Game Cards with a colleague at 360i, and I got to thinking about the exponential growth of virtual currency and online/social gaming that’s finally coming to the United States.

While the worldwide explosion of both virtual currencies and social gaming is undeniable, I can’t help but wonder where all of this is going and if it’s bringing media and online content to a good place.

The Good
Social games have simply exploded. Zynga alone has over 235 million monthly active users (MAUs) playing its games; all of which (I believe) exists in Facebook. That is a lot of time spent playing, engaged and ready to view ads, purchase virtual gifts, or perform any number of monetize-able actions.

The future is bright. This year alone, virtual goods revenue in the United States is projected to hit $1.6 Billion and about half of that is supposed to come from social gaming publishers (Zynga, Digital Chocolate and others). For a business that barely existed a few years ago, this is astonishing growth. What’s more, we’re well behind Asia in virtual goods revenue (they’re at about $4 Bn in annual revenue now), so there is still :money on the table”.

The Questionable
Despite recent success getting pre-paid cards out into the world, monetization has been a slippery slope. The TechCrunch Scamville callout with regards to offer media was a pretty big shake-up (Zynga handled this extremely well).  As a professional who has purchased various performance media, some with virtual currencies involve, I can say that getting a user to sign up for a subscription service in exchange for virtual currency is simply a terrible idea for this reason: at the end of the day consumers aren’t considering the product’s value proposition when making the transaction, so they inherently will not value the product.  Also,  if 66% of players are women between 35-44, why do publishers need to resort to these performance tactics?  It seems that this demographic can be spoken to on a higher level.

Also, and this is about as unscientific as it gets, the experience of social gaming just isn’t that cool. I realize that sounds like a ridiculous criticism, but if an industry plans to offer real long-term value to consumers, it should really start by maintaining some level of user experience integrity. When you scroll through the top social games in the world, there are two game formats: the “Mafia Wars” experience, and the “Farmville” experience. That’s really about it. Every other game is a slight tweak on those basic formats (with the exception of online poker). I’m not much of a gamer, and I’m far from what anyone would consider an avid social gamer, but I believe that, from a marketing standpoint, the industry needs to expand it’s experience if it’s going to see growth beyond a core market.

If you’re interested in the development of the industry, I’m a fan of Inside Social Gaming and Games Beat