Pietro Macchiarella, a research analyst covering video games for Parks Associates in Dallas, said only about 2 percent to 5 percent of a game’s players actually pay for virtual goods. But with more than 250 million people playing social games, all those little transactions eventually add up.

“It’s all about numbers in this space,” Macchiarella said. “

With a user base of several million people, paying players create significant revenue. The small percentage of users who pay will give a company a very high return.” Macchiarella believes that players will spend more on virtual goods as they become more comfortable with the microtransaction model. He predicts that the growth of virtual sales and online advertising will push the social gaming industry to $5 billion by 2015.

From article, “Local Firm Seeks Cut of Virtual Pie” by Natalie Jarvey

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