Virtual Worlds Forum

Back for the second day of Virtual Worlds Forum Europe, with a mixture of sessions focused on corporate use of virtual worlds, and then the more futuregazey stuff on where it's all going. There was a great panel this morning on business models though, with participants from NCSoft Europe, MindArk, Linden Lab and Makena Technologies, plus moderator Corey from The Multiverse Network. Here's some of my takeway thoughts:

• Virtual worlds can learn a lot from massively multiplayer online games, mainly because the latter are making all the money right now!
• Games are starting to move away from their traditional monthly subscription models towards making money more from item sales, other micropayments and in-world transactions, and advertising.
• Someone said yesterday that the appeal of virtual items is that they can be sold for much less than the real-world versions (e.g. catwalk clothing). However, Ben Richardson from Makena actually contradicted that with reference to There.com, pointing out that a virtual Levi's jacket and pair of Nike trainers actually sold for more in the virtual world than in the real one.
• Some figures from There.com's project with Capitol, the record label. It involved a bespoke nightclub venue, appearances from four bands, and kiosks providing links to download music from iTunes. 17,463 people visited the nightclub, while 42,774 clicked into the kiosks. 4,363 people attended the live events. That doesn't sound like a lot - but Ben's argument was that brands should measure the success of this kind of thing as much by 'time spent' as by 'reach'. I bet he has to argue that to a lot of marketing people...
• Money money money. Entropia Universe saw $360 million worth of user transactions last year, while for Second Life it was closer to $500 million (naturally, neither MindArk or Linden Lab said how much of a cut they took from that). However, it's small in both cases. "The more you try to capture of that, the less successful you end up being as a platform," said Linden's Ginsu Yoon.
• Entropia Universe has a sci-fi theme and clear 'game' elements, as well as a narrative structure. Does this get in the way of the commercial transaction side of things. MindArk's Frank Campbell said not, although as the world has developed, MindArk has introduced more content that's not gamey - for example, social systems and the ability for users to upload digital content.
• Where will revenues come from in three years time? All agreed that it's likely to come down to people spending money on their in-world identities - avatar customisation and so on. Advertising may also be a factor - although one thing I've noticed throughout the conference is that few people are talking about how exactly advertising will fit in (as opposed to branded spaces, I mean).
• One of the most interesting questions from the audience was from a self-confessed "old geezer", asking why virtual worlds aren't targeting people like him, when it's older people who have most disposable income. The reaction from the panel: it's partly because many virtual worlds are in the early adopter phase, which tends to focus on a younger audience. However, There.com and Second Life both report that their older users spend more money AND create more content, so they're very important.
• Hardware may be an important factor going forward, to make virtual worlds more usable. Peripherals to replace the mouse and keyboard, in other words. Ginsu even mentioned data gloves. Remember those?