Virtual Worlds Forum

1. What happens when the kids grow up? Much of the buzz around virtual worlds right now focuses on those aimed at teens and tweens, but what happens when they outgrow worlds like Club Penguin and Neopets? Not in terms of dwindling userbases, since there’ll be a constant supply of new users at the lower end of these age groups. But an important challenge for the industry will be providing virtual worlds to hold the attention of people who’ve grown up with the idea. Disney has clearly been doing some thinking about this, in terms of migrating older Club Penguin users to other worlds like Pirates Of The Carribbean, but others are sure to follow suit.

2. More seamless integration of the wider web. This is a challenge with several facets. For corporate use of virtual worlds, providing ready access to websites within these worlds will continue to be a technological arms race between platform providers, competing to provide the slickest, most seamless experience. And it’s not easy: a company offering smooth, fully featured collaborative browsing within a virtual world has a powerful USP. But away from the corporate sphere, this point also relates to closer integration of virtual worlds and social networking. People are already working on linking virtual worlds and, say, Facebook, but there is more work to be done here.

3. Going mobile. Mobile needs to be a higher priority for many virtual worlds, which are still focused on PC or web-based access. Many Web 2.0 companies are moving towards a cross-platform - or at least device-neutral future, where their users are accessing them in different ways from different devices. In virtual worlds, that change isn’t quite coming at the same pace. Whether it’s spin-off mobile games for kidworlds or the still-debatable benefits of streaming Second Life to an iPhone, mobile is going to be an important platform for this industry. Yet with considerable technological barriers, work needs to begin apace now.

4. Convincing more corporations. As I said in the intro, corporate use of virtual worlds is on the increase, and there are many and varied benefits. What’s more, the high-profile activities of tech giants like Cisco and IBM provide a strong lead, while the recent decision of AccelorMittal to introduce a Second Life element to its AGM made many business leaders sit up. But this is where the hard work just begins. Making virtual worlds a valid business tool isn’t about convincing Cisco or IBM, who have the resources and the talent to make it happen. It’s about convincing businesses lower down the ladder, right down to the SME level, that this technology can have a direct impact on their bottom line.

5. The advertising dilemma. There’s no unified opinion on what role adverts will play in virtual worlds, other than that they’re jostling for attention among other new business models like subscriptions and micro-transactions. On one level, it’s simple: people like to hang out in virtual worlds, advertisers gravitate towards people, so there will be advertising in virtual worlds. The question is how, how much, and how intrusive it will be (or not be, ideally). The fact that some of the fastest growing worlds are full of children only complicates this issue, with parents sensitive to any commercial over-exploitation. It’s against this backdrop that the virtual worlds industry must convince blue-chip advertisers to take it seriously, and work together to discover the best formats.

6. The continued boundary-blurring with gaming. The debate about what’s a virtual world and what’s an MMO is as old as the hills (and still unresolved, judging by all the articles I read calling Second Life a videogame). But an exciting challenge is how to blur these boundaries even further. We’re already seeing virtual worlds built around casual games, all three games console makers are launching virtual worlds or avatar-based services, and both Club Penguins and Neopets are becoming spin-off DS games. Managing these different kinds of virtual worlds / games crossover is going to be a blast.

7. Deciding what interoperability is for. Lots of the discussions and articles I read on interoperability focus on the technical ins and outs of removing the barriers between different virtual worlds, yet few focus on the likely consumer behaviour. Is interoperability about people being able to take the same avatar between several virtual worlds that they use regularly, or is it more about allowing people to quit one world and move onto another without starting from scratch? Or both? The challenge, essentially, is to have more public discussion about why virtual worlds should be interoperable and what it means for consumers, rather than the technical challenges and political elements of who will or won’t sign up.

8. Learning from branded mistakes. It’s no big revelation to say a lot of examples of brands in virtual worlds have been flops. Whether it’s deserted Second Life islands or hordes of angry users, brand campaigns within virtual worlds have a chequered history. Yet there’ve been a lot of successful campaigns too, for big brands. The challenge for the industry is to highlight these more often, and learn from both. 2008 and particularly 2009 should see some mature, engaging and above all effective brand campaigns in virtual worlds, with clear metrics showing their success. The days of splashing budget on a virtual install simply for short-term column inches are over.

9. Dealing with more outside interest. This might be from governments, police, or the media. The fact is that as virtual worlds grow in popularity - particularly for teens and tweens - they will attract more attention that may be unwanted by the companies running them. I fully expect to see a few more media scares around virtual worlds in the coming 18 months, and if handled poorly, they could tarnish the industry. Meanwhile, regulators around the world continue to get to grips with virtual worlds (not least deciding whether they’re games or websites, in countries where those two areas are regulated separately). From the industry’s point of view, the challenge here is simple: be aware that this attention is coming, and be prepared to deal with it effectively.

10. Don’t believe the hype. Predictions of billions of virtual worlds users in the next few years aren’t necessarily helpful, while the gush of VC cash flowing into the industry isn’t a guarantee that it’ll grow as expected. Both can create hubris, which may result in some spectacular failures - it remains to be seen who’ll become the first Boo.com of the virtual worlds industry, and spank $100m-plus on a world that quickly crashes and burns.

That’s ten challenges, anyway. What are your thoughts on these, and do you have your own to suggest? Do post a comment if so.