Business in Virtual Worlds

Watch your wallets! Hype machine coming through!

As part of the hype machine leading to next week’s Virtual World’s Expo a repackaging of recent usage statistics claiming that the online gaming community is being overtaken by the ‘virtual world’s community’.

First the stats:

Virtual worlds and Web 2.0 habits are driving users to worlds that support socializing instead of questing and user-created content instead of magic. World of Warcraft may have nine million subscribers, but Habbo Hotel has 7.5 million users per month, and it’s growing. BarbieGirls.com grew at over 40,000 new members per day to reach four million registered users after only three months of its public beta. Gartner Research predicts that 80 percent of the online population will be involved in non-gaming virtual worlds by 2011.

OK, so nothing really new here, just a repackaging of some stats to make the argument that the big investors and media players need to run, not walk, to the Virtual World’s Expo.

“There will always be a place for platforms that just want to allow users to play a game together, but now interaction is key. Community is key,” said Sherman who jumped from the game industry to the virtual worlds industry late last year. “The content revolves around and facilitates the community. Treating the online environment like less of a game and more of community or virtual world is key. Major media companies are now looking at anything they do as online entertainment – with a virtual world tied to it.”

{Get it???? It’s KEY!}

Case in point: Raph Koster, the former Chief Creative Officer of Sony Online Entertainment, recently took the wraps off of his stealth startup Areae with the announcement of Metaplace. Metaplace is designed to provide an easy-to-use interface allowing users to create virtual worlds that can run anywhere and do anything.

Said Sherman of the announcement, “Whether or not Metaplace is successful, the wake-up call for the game industry has been issued.”

Hype Alert!
Ok, first, in some way I fail to see the difference between Habbo Hotel, BarbieGirls, or even Second Life and World of Warcraft. In online games, the rules and advancement systems are explicit. In online ‘worlds’ the rules and advancement systems are implicit. Otherwise, an online world is just a portal for other information.

I’ll put my quibbles aside on how to define a game versus a world (please see my future post now in editorial on a new nomenclature for all of this – I keep tossing around terms like microverse and metapods as if they were well thought out terms but maybe I really should finish off my personal glossary!).

I’m a big believer in the power of the Metaverse. But I’m also remembering a conference I went to on the Internet in 1999 (auspicious year). When one pundit and stakeholder after another bandies about terms like “build community”, “interaction is key” and “Web 2.0″ my imaginary stock portfolio gets the cold sweats.

Anyone remember these terms:

- Aggregate eyeballs
- B2B space
- B2C space
- Bricks and clicks
- Build it and they will come
- Chief Internet Evangelist
- First-mover advantage
- Free-pricing model

…the list goes on.

Note to the wary, the money-wise, and the IPO-burned: beware strange travellers bearing elixirs and fancy sayings. That may look like a crystal ball but it might also be a bubble.

P.S. Per my previous comment on the PARC research of WoW, the idea of “communities” may be the wrong way to look at the concept of “3D worlds” – to the “user” other people are not a community per se, they serve a very specific function in how an individual interacts with a virtual world interface.

They provide an audience for their activities, a spectacle for their enjoyment, or a sense of being in a social presence, but they nonethless “play alone together”. If we keep talking about building communities and forget the fact that people either want an interactive space to access information, sex, a chance to create, or a community but ONLY in the narrowly defined spectrum of a rendered environment in which other avatars provide audience/spectacle/social presence, then a lot of these ‘virtual worlds’ will end up like the mainland in Second Life – once beautiful and now largely forgotten.

‘Aggregating communities’ is like saying ‘build a successful night club’. You want to be hip, trendy, have line-ups at the door and overcharge for drinks, you want coverage in the press and bouncers who accept tips and wear dark suits. But what you’re really doing is providing a venue where people can display themselves, see the displays of others, feel like they’re part of the “in crowd”, and have a chance to see enough of a spectacle that they won’t fall asleep before midnight or at least before they’ve hit the limits on their Visa at the bar. Wonderful business and you can sleep in late – but doesn’t take much for someone down the street to install a better lighting system and hire a new DJ with access to better tunes.

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