The SLENZ Update – No 121, July 31, 2009

VIRTUAL WORLDS “BOOMING” despite doomsters

“Twitter makes the noise while

Second Life makes the money”

-Victor Keegan, The Guardian UK

Second Life can do his … Tribute to Lachlan Campbell from the

Second Life Relay for Life benefit event – July 11, 2009.

LabGraal: Vocal, Rosalba Nattero

While Facebook and Twitter are lauded to the skies,  neither has found a way to make money – whereas virtual worlds such as World of Warcraft, Entropia Universe, Habbo Hotel, Club Penguin and Second Life are all profitable because their business models are based on the digital elixir of subscriptions and micropayments,  according to Victor Keegan (pictured) in the UK  Guardian.

It’s a formula that other websites, including newspapers, would die for,” he says. ” Twitter makes the noise, Second Life makes the money … actually, they are booming.

In a message which will have the virtual world doomsayers frothing at the mouth Keegan quotes the UK consultancy kzero.co.uk,  the world-leader in understanding the marketing dynamics relating to virtual worlds,  as reporting that membership of virtual worlds grew by 39 percent in the second quarter of 2009 to an estimated 579 million, although not all are active.

“If you think virtual worlds are a passing fad, look at the figures,” Keegan says “Almost all of the 39 percent growth came from children. Girls used to grow up with their dolls; now they are growing up with their avatars. This goes largely unreported because the users don’t read newspapers, but as Kzero reports, poptropica.com – aimed at five- to 10-year-olds – has 76 million registered users.

“If you move up to 10- to 15-year-olds, users rival the populations of countries – led by Habbo (135 million), Neopets (54 million), Star Dolls (34 million) and Club Penguin (28 million).

“It starts tailing off among 15- to 25-year-olds – apart from Poptropica (35 million) – but it underlines the likelihood that as youngsters get older they will be looking for more sophisticated outlets and for ways to link existing social networks such as Facebook or MySpace to more immersive virtual worlds. The telephone was a one-to-one experience; email linked friends and colleagues; Facebook extended this to friends of friends but virtual worlds offer – as Twitter does in a more constrained context – the opportunity to link with anyone on the planet sharing similar interests.”

Keegan, noting that Second Life  is consolidating as it tries to make the experience easier and less crash-prone,  says it is still the creative laboratory of the genre even though it may not end up as the preferred platform as new business models take advantage of the rapidly improving technological developments elsewhere.

“In order to get a more streamlined experience, most of the new virtual worlds don’t allow users to make their own content,”  he says. ” Twinity, which has just raised €4.5m in new funding, has a virtual version of Berlin and Singapore (with London still in the pipeline): you buy existing apartments or rent shops but can’t build yourself. Bluemarsonline.com – still in testing mode – promises much better graphics and more realistic avatars at the expense of not allowing members (as opposed to developers) to create their own content.”

“With technology moving so fast and a whole generation growing up for whom having an avatar is second nature, virtual worlds have nowhere to go but up.

“Only they won’t be virtual worlds – just a part of normal life,” he concludes.

For the full kzero reports go here and here and here