|
|
| Home - Industry Article - Jun 06 Issue |
The Reality of Virtual Opportunities
continued... page 2 |
Today, the most common type of virtual worlds are MMORPGs; such as EverQuest, Final Fantasy, Star Wars Galaxies, Lineage, and World of Warcraft. World of Warcraft has become a shockingly huge commercial success. More than six million active users pay $29.99 to join and a $15 per month subscription.
There are also more free-form virtual worlds, such as SecondLife, which do not have nearly as much structured or well-defined goals as the MMORPGs, but which rely very heavily on their inhabitants to generate content and things to do in the world. These worlds have their own, often self-governed, economies, rules about property rights, social contracts, and rules of engagement within the community, just like the real world.
Wikipedia defines a virtual world as "a computer-simulated environment intended for its users to inhabit and interact via avatars. This habitation, usually, is represented in the form of two or three-dimensional graphical representations of humanoids (or other graphical or text-based avatars)."
More specifically- the online publication Virtual Worlds Review (the closest thing to a trade publication for the industry)- virtual worlds have six common features:
1. Shared Space: The world allows many users to participate at once.
2. Graphical User Interface: The world depicts space visually, ranging in style from 2D "cartoon" imagery to more immersive 3D environments.
3. Immediacy: Interaction takes place in real time.
4. Interactivity: The world allows users to alter, develop, build, or submit customized content.
5. Persistence: The world's existence continues, regardless of whether individual users are logged in.
6. Socialization/Community: The world allows and encourages the formation of in-world social groups like teams, guilds, clubs, cliques, housemates, neighborhoods, etc.
Huge Potential Opportunities to Reach New Markets
As broadband access achieves ubiquity, there is a massive growth in the number of people using these virtual worlds, from all walks of life. User-driven communities, like MySpace and YouTube, have shown that there is a tremendous market for online socialization; sites that mix "social networking" with fantasy and role-playing, are enjoying a similar adoption pattern.
These worlds are no longer operating on the margins of life-they are part of the everyday life of 21st century youth, tweens and teens, who are already tremendously tech savvy, willing to purchase items online and are highly brand-loyal. The challenge is finding a means to reach them on a regular basis: TiVo and DVRs allow them to skip commercials, and they're less likely than ever to read print media. Virtual worlds provide one of those means.
Advertisers Make Something Out of Nothing
Virtual worlds have become another medium for advertisers seeking to place their interactive marketing dollars. Virtual advertising can range from ad campaigns and contextual product placements within themed worlds to entire worlds created solely to promote a brand or organization. Companies, that have used virtual worlds as sites for advertising, include Coca-Cola, McDonald's, Intel, Aeropostale, Levi's, Nike, and DaimlerChrysler.
Advertisers can also pay for product placement-allowing users to enjoy a virtual beverage, wear a virtual hat or drive a virtual car-or even go as far as to create their own branded virtual world, such as Coca Cola's "Coke Studios." Targeted to young adults and teens, members were able to use tools to create customized music mixes in the virtual "Coke Studio." They would then share these mixes with other members and receive "ratings" for each mix. Positive ratings provided points, which allowed users to purchase virtual furnishings for their individual studios. Additionally, some sites will host special events and locations with corporate support, including concerts, sporting events, and nightclubs.
Individual gamers are also getting in on the action, such as the developer of the virtual space station mentioned earlier. Goods and services offered, from player to player, include customizing avatars (primarily clothing and accessories), creating in-world vehicles, providing real estate services, offering home decoration and even outsourced virtual event planning services.
We are only at the tip of the iceberg of this new form of social interaction. The day may come when we move seamlessly back and forth between the real world and the virtual world, not only for entertainment and socialization purposes, but also to transact business and learn. Regardless of how far the virtual worlds penetrate our day to day being, the commercial opportunities they present are here now. Their potential for advertising, in the forms of traditional static and contextual advertising, product placement, and event sponsorship are huge, but there are also very real markets for virtual products and services in the virtual world. What was once clearly a fringe phenomenon, is becoming mainstream, and commercial opportunities abound.
Isaac Kato is Principal at General Catalyst Partners. He joined General Catalyst from Summit Accelerator Fund, the venture capital arm of Summit Partners, where he was a Vice President. Prior to Summit, Isaac co-founded, led and served as Chief Operating Officer of Sven Technologies, a 3D graphics software firm, which was acquired by Spatial Technology, Inc. Following the acquisition of Sven Technologies, Isaac was General Manager and Vice President of Spatial's online division. He also has worked as a Venture Capitalist at GE Capital's Equity Capital Group and at Shamrock Holdings, Inc. Isaac holds an M.B.A. with distinction from the Harvard Business School, as well as an M.S. in Engineering-Economic Systems and a B.A. in Quantitative Economics, both from Stanford University. For article feedback, contact Isaac at ikato@gcvp.com
 
|
|
|
