1 / 43

Impact of Virtual Worlds

Impact of Virtual Worlds. The online destination for the next generation? Dr. Pete Markiewicz Indiespace/Lifecourse Associates pindiespace@gmail.com. Topics. What are virtual worlds? How do vworlds differ from MMOGs? Why are vworlds important? Numbers and growth

charlotte-flynn
Download Presentation

Impact of Virtual Worlds

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Impact of Virtual Worlds The online destination for the next generation? Dr. Pete Markiewicz Indiespace/Lifecourse Associates pindiespace@gmail.com

  2. Topics • What are virtual worlds? • How do vworlds differ from MMOGs? • Why are vworlds important? • Numbers and growth • What vworlds will need in 2019 • Follow the money… • Barriers to growth • Unique features of US market • US teens – where will they go?

  3. What are virtual worlds? • Extend “sense of place” characteristic of cyberspace (Web, chat, MMOGs) • Games may be present, but not a game • Virtual “land” or “rooms” • Social interaction like Web 2.0 (chat, friends lists, exchange of virtual objects) • Customized avatars, for real-time interaction • Support for real work, education • Economic models for payment, barter, sales

  4. Two kinds of vworlds Tween and kid vworlds Adult vworlds Second Life Cyworld ~25% of US teens Web-based (2.5D) Prebuilt Social networking PG-13 ~3% of US adults Custom browser (3D) User-generated Social networking Commerce, Education

  5. Virtual world examples (teen/adult)

  6. Virtual World Examples (kids)

  7. Virtual world environments There Habbo Empire of Sports Club Penguin

  8. Sports-based vworlds • Multiple sports-based worlds in development • Empire of Sports (teen/adult) multiple sports • Football Superstars (teen adult) virtual football challenges • TechDeck Live (kids/teen) virtual skate park

  9. Irwin Toys strap-on Me2 Hardware measures how hard kids exercise Plugs into computer for gameplay in the Me2 virtual world Kids expend as much energy in “active” games as in regular sports Vworlds and RL “exergaming” SOURCE:http://www.nzherald.co.nz/health/news/article.cfm?c_id=204&objectid=10493847http://www.360kid.com/blog/?p=43

  10. Virtual Worlds and Politics Watching Obama in Second Life Jul 11, 2009http://foo.secondlifeherald.com/slh/2009/07/watching-obama-in-ghana-from-metaplacesecond-life.html

  11. Virtual products • Offered for sale or free • Used in-world • Fashion • Buildings, furniture • Connect to outer word • E-commerce • Teaching tools • Virtual phones • Prototype real-world • CAD/CAM “prints” to vworlds Vodaphone virtual cellphone HUD

  12. Vworld creation • Development cycle similar to games • Must create/maintain associated website • 3-5 years needed to develop* • $30-60 million required for launch of full 3D* • ~$5-10 million required for 2.5D/Flash launch • >200 competitors Google Lively *Mike Hirshland, Polaris Venture Partners

  13. Vworlds are NOT MMOGs • Members play “the game of life” • Members are themselves • Members define goals, scores, rank • Members reflect general population • Members may sell virtual products, own IP • Virtual economy tied to the real economy • Members can do “real” work (education, business) Stardoll

  14. Vworlds are not empty… MYSPACE HONG KONG ISLAND • Compared to MySpace • 300 million pageviews/day~1 minute per page per day • 1/3600 pages being viewed at any time • If MySpace pages are laid out as “real estate” in a 60x60 grid, occupancy resembles the Second Life grid • RPGs in Second Life look 10x-100x better than the average MySpace “real estate” MIDIAN CITY RPG EVERWIND RPG Take-home: Vworlds aren’t empty…they just look that way!

  15. Vworlds are NOT MMOGs “…The game industry may have created the idea of online entertainment, but the days of orcs and elves ruling the online space is drawing to a close" - Christopher Sherman, Executive director of the upcoming Virtual Worlds Fall 2008 Conference

  16. Vworlds versus MMOGs Goals, scores community created by members Virtual Worlds Prebuilt User-created Online Games Pre-defined goals, scores

  17. Vworlds versus MMOGs Goals, scores, community created by members Second Life Web 2.0 IMVU Kaneva Kid & tween vworlds (Club Penguin, Habbo, There Gaia Online, Cyworld, Stardoll) MoiPal vSide Prebuilt User-created Entropia Second Life RPGs WoW and Similar 3D RPGs Kid/tween gaming(Neopets, Nicktropolis, KartRider) Pre-defined goals, scores

  18. Why are vworlds important? • 2009 • 15% of Internet users MMOG or vworld members (Mark Kern, team lead, WoW) • Growth Q1 => Q2 2009: 39% • Average user age: 14 year old (Kzero) • MMOGs and S/N web make the most money • Vworlds populated by older early-adopters • Vworlds offer limited value compared to Web 2.0 • 2019 • 80% of Internet users in virtual worlds by 2011 (Gartner) • Average user age: >20 • Vworlds make the most money • Vworlds replace the web for the new (“Millennial”) generation • Vworlds become Web 3.0

  19. Vworld accounts in Q4 2008

  20. Virtual world simultaneous users • Second Life (3D) • 150 users/island • ~70,000 simultaneous during Q3 2008 (up from about 2,000 in early 2006) • Gaia Online (2.5D) • 100,000 simultaneous (2007)

  21. ‘Kid worlds’ have high traffic SOURCE: Patrick Collins of Brand Architect http://www.collings.co.za/2007/11/the-march-of-th.html

  22. Vworld members skew younger SOURCE: Kzero Blog - http://www.kzero.co.uk/blog/?p=2793

  23. Predicted growth of “kid” vworlds Percentage of US child/tweens (3-17) Expected to visit a virtual world at least once a month SOURCE:http://www.emarketer.com/Article.aspx?id=1006166

  24. Time spent in vworlds Total time spent logged-in by Second Life Users, March 2007-March 2008 (millions of hours) Growth was unaffected by negative media stories in Fall 2007, and economic slowdown in “real” economy SOURCE:http://www.emarketer.com/Article.aspx?id=1006166 Provided to eMarketer by Linden Labs

  25. Vworld members are engaged • Wow (Aug 2007) • ~80-100 hours/month(!) • Second Life (Aug 2007) • 24 hours/month (counting actual monthly logins) • 3.7 hours/month (counting unique accounts) • MySpace (Aug 2007) • ~ 30-90 minutes/month per page (depending on how you count) • Habbo (Sept 2008) • 40 minutes/month

  26. Take-home Second Life classroom Vworld audiences are small, but their members are MUCH more engaged than Web 2.0 users

  27. Monetization • 2008 Dollar revenue, monthly users per month • Second Life: $9.30/mthly user/month(higher due to virtual land sales) • Club Penguin: $1.62/mthly user/moth • Habbo: $1.30/mthly user/month • Runescape: $0.84/mthly user/month • Puzzle Pirates: $1.50/mthly user/month • Average $1.40/mthly user/month*. • Excluding Second Life, $1.25/mthly user/month SOURCE: Lightspeed Partners Bloghttp://lsvp.wordpress.com/2008/06/09/successful-mmogs-can-see-1-2-in-monthly-arpu/

  28. Monetization sources • Free Sites, optional subscription (“freemium”) • Virtual products –up to 85% • Subscription –10% • Advertising –5% • Paid Sites • Subscription – 75% • Virtual products – 25% • Coupled Sites (need real-world product to join) • Subscription –50% • Real-world product – 50%

  29. Virtual products are the key • Emulate a real-world thing • Seeds • clothing • Housing • Pets • Reproduced electronically • Near-zero costs • Sold for real money • “Game money” bought with real currency • Direct credit card purchases • Secondary barter economy • Users swap vproducts • Users design and sell custom vproducts

  30. Virtual Products overview • In July 2009, analyst firm Frank N. Magid that found that 12% of Americans had purchased a virtual gift within the past 12 months • Most sales (around 80%) of sales occur within online games • Over half of players in online games purchase virtual products • Thirtysomethings purchase the most by revenue, while teens and twentysomethings purchase the most per user • Players in online games typically purchase $60-75 dollars in virtual products each year. • Virtual good buyers are often sellers – Playspan estimated that 31% of its buyers also sold virtual products • Asia leads the virtual goods market, with the largest share coming from China SOURCES: Frank M. Magrid 2009 Media Futures Study Lightspeed Partners blog, Virtual Goods News

  31. Growth of virtual product sales SOURCES: Frank M. Magrid 2009 Media Futures Study Lightspeed Partners blog, Virtual Goods News

  32. vProduct case studies • Zanga (October 2009 • FarmVille Players bought $500,000 virtual seeds, 50% of revenues were used to buy real seeds for nonprofits in Hati • Ning (October 2009) • A new Virtual Gifts Incentive programwill allow anyone creating a Ning site to sell virtual products, with a common currency between all Ning networks • Facebook (June 2009) • $75 million/year from sales of ~100 million digital gifts, or about 10% of total sales • Stardoll (September 2008) • 1.8 million virtual products were purchased from the Kohl's “back to school” store within its first 16 days • Zwinky (August 2008) • Sears sold more than 850,000 vproducts in Zwintopia during the first 16 days after launch • Habbo (Sept 2008) • 2.5 million US users spend $18/month • 85% of revenue from sale of virtual products, only 15% from advertising • Nexon (creators of KartRider) June 2007 • Worldwide revenues of $230 million in 2007, • 85% of it from sale of virtual items • IMVU (Sept 2008) • $4 million/month revenue • 90% comes from a “cut” from sales of virtual products between members SOURCES: Lightspeed Partners blog, Business Week, Virtual Goods News

  33. What teens buy in virtual worlds SOURCE: WeeWorld Member Surveyhttp://www.virtualworldsnews.com/2009/07/weeworld-survey-teens-still-spend-girls-are-major-influencers-.html#more

  34. For teens, branding in virtual worlds is effective Link to K-Zero’s age breakdown:http://www.kzero.co.uk/blog/wp-content/uploads/2008/04/kids-world-ages001.png SOURCE:http://www.emarketer.com/Article.aspx?id=1006166 Deloitte Development and Harrison Group, “The State of the Media Democracy Second Edition”

  35. Take-home By 2019, vWorlds will become the place the next generation lives and works… …Web 2.0 and classic MMOGs will decline in importance There.com

  36. What will virtual worlds need to succeed in 2019? • Fit the audience • My generation, age group, gender, lifestyle, politics • I’m special here • My friends are all here • It’s a regular, normal part of my life • Give the audience what it wants • I have control • I can find out what I need to know • I can buy anything I can find on the web • I can do my work here

  37. Follow the money… • Near-term • Virtual products NOW!!! • Flat-fee subscriptions • Advertising • Market research • Long-term • Real product prototyping • MMOGs inside larger vworlds • Virtual education • Government/military use • Business work environments Vproduct Store in Second Life

  38. Barriers to growth SOURCE: Thinkbalm - http://www.thinkbalm.com

  39. Barriers to growth • User interface is hard to learn (key commands and complex HUDs) • If users are impeded from creating their own content, they don’t (Philip Rosendale) • Flat fee structure assumed • Massive infrastructure needed Avatar configuration HUD, Entropia Universe

  40. Barriers to growth - US market • Most users log in from home (less sense of community) • Backlash from Second Life hype • Limited mobile power precludes use of mobile vworlds • Internet connections in US are slow

  41. Where will US teens go? Second Life (Social) Second Life (shopping) IMVU Moove Second Life (RPGs) There User-Created <- Vproducts <-Dressup Dressup -> Vproducts ->User-created Kaneva Most tween & teen 2.5 vworlds, e.g.Stardoll, Habbo,Whyville, Club Penguin, Virtual pet sites Entropia WoW MySpace Gaming ->Themed Shopping -> Social Networking

  42. Sources for Virtual Worlds • Virtual Worlds News – general newsfeedhttp://www.virtualgoodsnews.com/ • Virtual Goods News – virtual productshttp://www.virtualgoodsnews.com/ • Virtual Economy Research Networkhttp://virtual-economy.org/ • Pearl Research – China & Asian markethttp://www.pearlresearch.com • Kzero - #1 virtual vorlds consultancyhttp://www.kzero.co.uk • Thinkbalm – “The Immersive Web”http://thinkbalm.com/

  43. References • Virtual Economy Research Networkhttp://virtual-economy.org/ • LightSpeed Partners Blogs • http://lsvp.wordpress.com/?s=RPG+Second+Life&searchbutton=go! • http://lsvp.wordpress.com/2008/09/02/facebook-selling-digital-gifts-at-a-35m-run-rate/ • Business Weekhttp://www.businessweek.com/magazine/content/07_13/b4027047.htm?campaign_id=rss_daily • Virtual Goods Newshttp://www.charleshudson.net/?p=512http://www.virtualgoodsnews.com/2009/11/asia-driving-the-virtual-goods-marketplace-.html#morehttp://www.virtualgoodsnews.com/2009/09/over-half-of-gamers-purchasing-in-freemium-games.htmlhttp://www.virtualgoodsnews.com/2009/10/ning-launches-virtual-gifts.html#more • Online traffice at compete.comhttp://siteanalytics.compete.com • Cnet - Neilsen 2008 results for social networking siteshttp://news.cnet.com/8301-13577_3-9948219-36.html • Why virtual worlds are overtaking the game industryhttp://www.virtualworldsnews.com/2007/10/why-virtual-wor.html • New World Notes - New World Notes' True Community Search: Top Twenty Popular Second Life Sites, September 20http://nwn.blogs.com/nwn/2007/09/new-world-notes.html • “Total minutes” netratings for web 2.0 siteshttp://www.netratings.com/pr/pr_070710.pdf • MySpace real pageviewshttp://www.mikeindustries.com/blog/archive/2006/04/myspace-click-factory • Fun with numbers: Do New Ratings Mean New Valuations?http://voices.allthingsd.com/20070712/robert-seidman/ • Second Life statisticshttp://secondlife.com/whatis/economy-graphs.php • Second Life engagement “Second Grade Math”(Oct. 5th 2007)http://blog.secondlife.com/category/economy/ • Kid’s worlds poised for growth spurthttp://www.emarketer.com/Article.aspx?id=1005410&src=article_head_sitesearch • Harvard Business School Conference, Nov 2007http://www.gamasutra.com/php-bin/news_index.php?story=16326 • There.com demographics (2004)http://findarticles.com/p/articles/mi_m0PJQ/is_6_2/ai_114573226 • Daedalus Project - The Psychology of MMORGshttp://www.nickyee.com/daedalus/archives/001369.phphttp://www.nickyee.com/daedalus/archives/pdf/3-4.pdf • Comparing virtual worldshttp://www.kzero.co.uk/blog/?p=978 • Virtual World Growth Projectionshttp://www.slideshare.net/nicmitham/virtual-world-growth-projections/ • Round-up of 50 virtual worldshttp://fabricoffolly.blogspot.com/2007/10/second-life-in-perspective-round-up-of.html • eMarketer report on virtual worldshttp://www.emarketer.com/Article.aspx?id=1005410&src=article_head_sitesearch

More Related