Wired just published a good in-depth article on Neopets, a site that enables kids to enjoy virtual pets. Members play simple games to accumulate virtual currency which can then be spent on pet maintenance and upgrades. Neopets was purchased by Viacom in June ‘05 for $160M. Article highlights:

• 25 million users worldwide; 2.2B pageviews per month
• “Second-stickiest site on the Internet” according to Media Metrix
• Now available as stuffed animals, board games, trading cards, console games, and soon a feature film.
• Revenues are primarily ad-driven via deeply-integrated brand/product placement, i.e. McDonald’s: Meal Hunt (you search for lost McNuggets). Members are also exposed to movie previews, market research surveys, etc. In some cases, even the virtual trophies for winning a game are branded (i.e. with the SweeTarts brand).

I dug up another article with some impressive placement examples. Site users, wanting to buy gifts for their pets, actually got worked up over a limited supply of virtual Mattel DivaStarz dolls. Product trials of Heinz EZ Squirt ketchup jumped 18% after inclusion in Neopets.

All of the incentive systems in Neopets can be found in other games that appeal to other market segments. ClubPogo users (the majority of whom are adults) work like mad to win virtual “badges” and currency that have no tangible value. MMORPGs, played primarily by hardcore gamers, also feature much-desired virtual currency and status symbols. At least for now, MMORPG currency is unique in its spontaneous realization of real-world value.

Lastly, there’s some controversy about the scope of the advertising in Neopets.

EA is acquiring Jamdat, a top publisher of mobile games, in a deal worth about $680M. In tangenially-related news, EA also announced an exclusive partnerships with Indian wireless publisher Indiagames. Nothing like scale, clout, and a fat wallet to help make up for lost time.