Six Pixels of Separation - The Blog
October 17, 2008 2:37 PM

Third Life For Virtual Worlds

When was the last time you thought about the online virtual world, Second Life? Most of our attention shifted out of Second Life over to Twitter and FriendFeed.

It turns out virtual worlds are not dead.

According to this news item from Virtual World Management, $148.5 Million Invested In 12 Virtual Worlds-Related Companies in Q3 2008, things are still rocking and rolling in the virtual worlds:

"Virtual Worlds Management, the leading virtual worlds trade media company, has announced findings from a comprehensive study of accountable transactions showing that venture capital and media firms have invested more than $148.5 million dollars in 12 virtual worlds-related companies during the third quarter of 2008 with participation from many more VC firms and angel investors. The total investment in the virtual worlds space for 2008 is now over $493 million... The bulk of the investment is in the entertainment space, with all but $22.4 million going to developers of worlds with strong gameplay elements, ties to media brands, or the youth sector."

By the sounds of this, someone, somewhere is drawing lines of distinction between pure-play games and virtual worlds.

This begs the questions: is Club Penguin a game or a virtual world? What about Webkinz?

One of the main differentiations of Second Life was the fact that it was, indeed, not a game. It was a place to socialize and virtualize a new life. By all counts, this was the main driving force behind why businesses and brands dove on in. Otherwise, the dollars would have been allocated via their in-game ad spends (if they even had one).

If virtual worlds want to go from the gaming side to the business side, these distinctions are going to have to be made much clearer. After reading this news item, I'm a little confused.

Do you think businesses are going to jump on in or are brands looking for something more?

Is the next iteration of virtual worlds really just a sub-category of the gaming industry?

By Mitch Joel

Comments Comments Feed
  • Posted by Duane Brown
    Mitch Joel

    Second Life, Club Penguin, Webkinz are all virtual worlds. After that it comes down to if it's more video game centric like Club Penguin or not. Second Life and The Sims are virtual worlds that don't have a heavy gaming aspect to them. It's not about gaining achievements and killing other people. Virtual worlds are just a sub-category of the gaming industry.

    Brands and advertisers can play in both playgrounds but making sure their ads are relevant and are in context will be key to their success in the end.

  • Posted by Roberto Rocha
    Mitch Joel

    I think brands and money are rushing into virtual worlds in case they do become more than another hype. They want to be one of the first movers in what may just be the next big communication platform.

    Nortel is building a virtual world for businesses to conduct conferences and seminars without members travelling. Sony is finishing up its PlayStation Home. Lot of adult niche worlds coming up.

    There was a lot of talk a year ago that Second Life was just the first draft, that virtual worlds will become intensely immersive and inviting. And maybe all those Club Penguin kids will indeed want to remain virtual denizens as they grow older, and seek more adult alternatives.

    These VCs may be on to something.

  • Posted by Torley
    Mitch Joel

    Mitch, oh what a treat you've mentioned this!

    I thought about Second Life today because I work for Linden Lab.

    There are a lot of generic, reactionary, lame-linkbait titles on "news stories" which come from uninformed reporters... who hear things from another party, and then parrot them in a horrible manifestation of ideaological incest. It's like an echoed echo chamber, pardon the redundancy, and a brokedown version of ye olde telephone game.

    To the point: let's recall when the web was treated with the same scorn, oh, iron horses, er, horseless carriages were.

    Just like the map is not the destination, names and labels help identify and locate, but are NOT the actual presence being referred to. By the time you answer some questions, it's like Heisenberg's Uncertainty Principle.

    There'll be games, but just as the gaming industry is serious, multi-billion-dollar bizness, there'll be work AND play involved.

    Humans will pay a good deal for their pleasures and vices.

    Let's not forget teaching people how to use, how to market, etc. and make the BEST use of virtual worlds is SO very important. I frown whenever Second Life shops don't use click actions, and here's why:

    HELP each other... AWESOME AWARE!

  • Posted by Parker
    Mitch Joel

    Virtual worlds have always been a sub-category of the gaming industry, but also a sub-category of the internet.
    As the importance of online games increases, they will no longer just be a sub-category, but rather THE category.

  • Mitch Joel

    I would like to present a different perspective on "virtual worlds." While most people look at virtual worlds as completely, immersive 3D worlds, another category that is emerging is the virtual show/trade show arena - similar to what Roberto mentioned. These tend to be virtual environments that include 3D-like elements without "full" immersion like Second Life.

    My company provides such a platform for creating these virtual shows. Because the intent of these shows is for business, one cannot categorize them under the gaming industry. Rather, the differentiation will be based on intent: consumer-focused applications for gaming and personal socialization or business-focused applications.

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    Mitch Joel

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