It turns out that people don't want to click ads during game play - dooh! But they don't mind spending a dollar for virtual goods like new weapons or outfits.
The big players like EA have spent millions buying up companies that specilise in virtual game item sales. This year they bought Facebook game company Playfish paying $275 million for the company.
Another player Zynga makes 90% of its revenue from virtual goods, the company made $300 million last year! With ad revenues dropping firms are looking for new ways to make money from users and it has been estimated that 90% of online game start-up companies sell virtual goods.
The market started in the Far East and has now taken off in America.
Like iTunes where game are free or cost a few cents developers see the sale of add-ons as a source of revenue when their games have a large user base. The market is just started with music sales and themes planned for the future.