The focus of most reporting and analysis on virtual worlds is on the big names, such as Second Life, and how these 'may' change the way we undertake everything from our social lives through to going shopping or seeking entertainment services.
However, the reality in terms of financial performance is that many have simply fallen far short of where they'd hoped to be - and major companies are just not prioritising them as investment areas. See a recent survey of global executives on their expenditure plans in light of the economic climate:
"75% of respondents either already have or intend to build community features into their web offering. However, despite a widespread belief that virtual worlds such as Second Life could expand, 68% said that they did NOT intend to include them with their digital media strategy over the next two years."
- STRATEGYEYE SURVEY OF 200 MEDIA EXECUTIVES ON IMPACT OF CREDIT CRUNCH ON SPENDING
The big news, if anyone in the mainstream media looked to their childrens' behaviour, is much more about the kids. Children’s versions of virtual worlds are proving much more popular and is where the revenue is and where the money is going. Indeed, Neopets already has 45 million registered users, compared to a mere 12 million for Second Life.
This fast-growing market has attracted the attention of VC investors – USD22m+ has been invested in several startups over the past six months, while media and toy conglomerates are increasingly using kids’ virtual worlds to leverage their offline distribution and build customer loyalty among their youngest fans. In April 2008, Virtual Worlds Management reported that 114 worlds for the kids and ‘tweens’ demographics were either live or being developed.
The most popular virtual worlds to date are: Club Penguin by Disney (17 million registered users), Neopets by Nickelodeon (45 million), BarbieGirls by Mattel (13 million), Stardoll by Stardoll (20 million), Whyville by Numedeon (3 million) and Webkinz by Ganz (7 million monthly US users).
Business models are evolving quickly but the sheer scale of audiences presents multiple opportunities to be exploited:
- Subscription fees from USD5 to USD15 per month (Club Penguin, Barbie Girls, Disney’s ToonTown)
- Merchandising
- Virtual good sales. Neopets and Stardoll are selling pre-paid retail cards that are then used by children to buy in-game goods
- Advertising
- Indirect promotional impact - some are creating tailored, ad-free virtual worlds simply as part of marketing strategies
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FOCUS: Virtual worlds for kids – a growing playground for children and brands
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