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Habbo's Virtual Goods Boom: Worth Almost $60 Million In 2008

This story was written by Tameka Kee.
Sulake Corp., parent company of Habbo, one of the most heavily-trafficked, advertiser-friendly virtual worlds for teens, said it brought in roughly $74 million (50 million euruos) in revenue last yearand just about $60 million of it, or 80-85 percentcame from users who bought virtual goods like furniture, clothing or paid for access to the Habbo Club.

The remaining 15-20 percent of revenue came from ads and sponsorship sales to brands like *Nokia*, Burger King and Paramount Pictures. Sulake also said it ended the year with an EBITDA of about $7 million (4.8 million euros) and a "positive net result."

It's a rare look inside the finances of a privately-held company. And given the recent investments in gaming and social media startups that have virtual goods potential, it's a look into how viable the business model is.

"A large part of our revenue comes from user micro-transactions with low monetary value and these type of low cost entertainment/communication services typically survive well over more difficult times," CFO Outi Henriksson said, in an emailed statement. As for ad sales, Henriksson (pictured) said they were "stable," but that the company was prepped for a slowdown: "Deals may get shorter, but volume is still there."

Founded in 2000, Finland-based Sulake is backed by a number of investors, including Taivas Group, Elisa Group, 3i Group plc, Balderton Capital, Movida Group, as well as private investors, including founders Sampo Karjalainen and Aapo Kyrl. The company says an average of 11.5 million unique global visitors came to Habbo in December 2008; Sulake also owns IRC-Galleria, a Finnish social networking/chat hub. Release.

By Tameka Kee