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Google’s Charles Hudson, a host of the Virtual Goods Summit, moderated the last panel of the day, on virtual goods and entertaiment.

Panelists:
Jim Greer of Kongregate
Erik Bethke of GoPets
Sean Ryan of Meez

Charles: What motivates people to stay engaged, and how do virtual goods play into that?

Ryan: For us it’s about self-expression. When our users spend 4-6 hours online, self-experssion as they show themselves in their IM, in their blogs, in the game, is incredbly impoertant to them. Our most loyal users are female. Unlike in Second Life, where they routinely blow up the American Apparel store, it has to be a conscious choice to engage with the brand. We find our users actually associate with brands. It comes down to, I’m online and I want to express something about my identity to everyone else. (more…)

Conference host Susan Wu moderated an afternoon panel addressing the question of whether virtual worlds are “the next big business model” at the Virtual Goods Summit.

Panelists:
Tim Stevens of Doppelganger
Kevin Effrusy, general partner with Accel Partners (investor in Facebook)
Dan Kelly, CEO of Sparter
Min Kim of Nexon

Susan: How do you guys estimate the size of the overall virtual goods market?

Dan: It’s easily a billion dollar [secondary] market. Consumers have told us these things have value, the industry now is trying to reconcile that with their business model. (more…)

Nabeel Hyatt of Conduit Labs moderated a panel on Why Virtual Goods Matter, and What’s Driving User Adoption, at the Virtual Goods Summit at Stanford University.

Panelists:
Craig Sherman of Gaia Online
Daniel James of Three Rings
Amy Jo Kim of Shufflebrain
Byron Reeves of Stanford University and Seriosity

Reeves: The human brian is not specialized to differentiate between virtual and real. Same neurons fire when an avatar smiles at you as when a real person smiles at you. Seriosity is looking at what happens when you create an opportunity to do serious things with virtual currency attached, such as sending email messages with virtual currency attached. The result? You open the email faster when currency is attached. Virtual money changes real behavior. (more…)

Min Kim of Nexon gave a presentation at the Virtual Goods Summit and said the company would probably announce the release of its KartRider in the US soon, which has been in closed beta. Kim also said Maple Story has been “kicking ass” in the US, with 3.5 million registered users. The company is also introducing prepaid cards at Target that can be used to buy virtual items, which it expects will push up sales as well. It also just released Audition, which already has 100,000 registered users, more than half of them female. (more…)

Kyra Reppen of Neopets gave a presentation at the Virtual Goods Summit on MTV’s Neopets. Like other MTV presenters before her, she began her presentation with a video. Perhaps the most interesting part, though, was about the new NC Mall that Neopets will introduce in beta next week. It’s about customizing and self-expression. It’s complementary to the Neopoints economy, no exchange between the two. Themed items around Neopian events. Launching with PayPal. Why do we think this is going to work? Digital is real life for this audience. Technology is invisible. Emotional connection makes the pixels go away and it’s about these experiences. Virtual worlds and virtual economies are simply applications to achieve those four core goals: fun, self-expression, social needs, and control. Kids ages 6-14 have $60 billion in income. One important feature of NC Mall is try before you buy. (more…)

David Wallerstein of Tencent began the Virtual Goods Success Stories panel at the Virtual Goods Summit with a presentation, mostly to demonstrate what Tencent is doing in China: Chinese Internet penetration is only 10.5 percent. Wireless is 35.2 percent. Roughly 40 percent of Internet usage in China takes place in Internet cafes. Tencent currently has more than 4,000 employees, with roughly 30 percent R&D staff. Tencent has five leading online platforms:

• QQ.com is the #1 portal in China
• QQ games portal is the #1 mini casual games portal in China
• QQ IM, #1 IM service provider in China
• They also have a leading wireless portal
• Qzone, the #1 blog site / MySpace in China

Revenue has grown from RMB250 million in Q1 2004 to RMB750 million in Q1 2007. The largest share, 65 percent, is Internet value-added services. 25 percent mobile, 10 percent advertising. (more…)