Virtual Worlds Forum

Zynga, a games network which operates a series of social casual games, has raised $29m in a Series B round, led by Kleiner Perkins Caufield & Byers, bringing its total funding to $39m. It has also announced the acquisition of YoVille, a virtual world Facebook application. Zynga is already making its games available as applications on Facebook and other social networks, with 2.9 million daily active users across their different offerings, including Texas Hold’em and Scramble (a word game). It had been believed that Kleiner Perkins were no longer investing in Web 2.0, according to a recent Fortune article, but Partner John Doerr made an exception for Zynga saying that they have ‘cracked the code’ in developing viral games.

The reason that Zynga has attracted such enthusiasm from investors is the appeal of its model. It is able to create games on the cheap which nevertheless appeal to huge audiences. By creating a portfolio of games, and using social networking sites and cross-promotion to build up a user base, they start to be in a position to be very profitable. They are also freed from the tortuously long development cycles of large, traditional games companies such as EA (whose former Chief Creative Officer Bing Gordon is also joining Zynga’s board today).

However, this new model absolutely relies upon the social aspect to games, and it is likely that a desire to strengthen this is the motivation behind the purchase of YoVille. A virtual world built on top of Facebook is not a unique concept – Vivaty is another example – and there is a reason for that; the social network offers a boost to viral growth, and the combination of an appealing virtual world with the Facebook platform is a recipe for lots of users.

K Zero have put together a fantastic graph, which plots the different virtual worlds according to the market they sit in – both in terms of their functionality and their target age group.

(click through for full sized graph)

The most immediately obvious feature of the graph is that the age axis does not go above 40. Virtual worlds are a new technical phenomenon, and it should be no surprise that their initial adoption will be by younger people. This is surely the biggest gap in the virtual world market, but the important question is whether there is a market in that gap. 2D web social networks for older people have started to emerge, such as Saga Zone which is aimed at over 50s, but it is too early to tell whether people of that age group will adopt new methods of communication en masse. On the face of it, virtual worlds for old people could be a big hit, enabling often lonely elderly people to have more social contact, and the 3D paradigm may even make more sense than the world of websites. I suspect that this is a very long term growth area, although the industry has to hope that the market emerges before current users of Club Penguin reach pension age!

We reported last week on the launch of WebFlock by The Electric Sheep Company – essentially a platform upon which virtual worlds can be developed and then built into websites.

I was joined on a podcast by Sibley Verbeck, CEO of Electric Sheep, to talk about the announcement as well as get his insight into the latest developments in the virtual worlds industry – particularly the impact which Google Lively will have.

Listen to the podcast to get the full story, but the big point that I took away from my discussion with Sibley was the importance of going mainstream. I think he’s right to see that as the absolutely key thing that the industry has to work towards. Part of the solution will be technology – which is where WebFlock comes in – but it is also going to require clear strategic thinking to find ways to make virtual worlds more valuable to mainstream users. Mainstream adoption for Verbeck is what will enable business models to start to work more effectively.

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In a virtual equivalent of the Relay for Live events which take place worldwide to raise money for the American Cancer Society, Second Life residents have raised nearly $200,000 of very real money (L$52,050,171 precisely) for the cancer charity. That’s double what was raised in last year’s efforts.

Charities rely upon people rallying around a cause to raise money, and virtual worlds have shown themselves to be an ideal way to do that. It is likely the hyper-connected environment of virtual worlds, in which communication is incredibly easy, which allows people to work together so effectively. The trend is a wider consequence of the internet – websites such as JustGiving, where users publicly donate money to a particular cause, having been invited by a friend, are evidence of that.

David Miliband (UK Foreign Secretary) has spoken about the power of communication driving support for a cause in the context of its ability to rebalance the relationship between the state and the individual. He calls it the ‘civilian surge’: “There are 200 million Chinese learning English; there are more bloggers in Iran than any other country in the world per capita; Buddhist monks march for democracy in Burma. I got the idea of a civilian surge when I was talking to David Petraeus [the US military commander] in Iraq because, he says, ‘You can’t kill your way out of this problem - you need politics as well as security.”

There is, of course, a commercial lesson in this. Virtual worlds offer brands the potential to mobilise support in their favour. If a brand can find a way to be the ‘in thing’ in a virtual world such as Second Life, with users really engaging with the message behind that brand, that could be incredibly valuable. That potential is arguably at the route of advertising interest in virtual worlds, and is perhaps the holy grail. 

That’s the message from Kaz Hirai, president and group CEO of Sony Computer Entertainment, in an interview with GamesIndustry.biz. Home, a virtual world for PlayStation users, has been in development since 2005 and has been dogged with a series of delays. Initially intended to launch in late 2007, it was then postponed until spring 2008. The latest timescale is an open beta to be launched in the autumn of this year.

According to Hirai, the reason for the delay is the desire to get Home right first time: “had we launched it before we thought it was the right time and the right features and functionality to launch it - with the high anticipation, people would go there in droves the first time around, they would check it out and say, “This isn’t fun at all, so I’m not coming back again.” With virtual worlds so dependent on user numbers –an empty virtual world which is supposed to be all about socialising isn’t much use- this may well be a sensible position to take.

The promise of Home is certainly great. Xbox 360 has enjoyed phenomenal success, and has turned into a real revenue generator for Microsoft. Home could potentially go beyond that, with advertising revenue on top of sales of commercial content and microtransactions between users. The graphics capabilities of PlayStation 3 may also enable the development of by far the most graphically impressive 3D world to date- developers will be able to rely upon content being processed the same way given the identical consoles.

Before that promise can be fulfilled, though, Home has to launch. Whilst it is still benefitting from good hype at the moment, too much delay could easily lead to a loss of interest, and the delay exacerbates any possible initial disappointment with the product. It’s a high stakes game; Sony could still get it right, and win big, or things could go very wrong.

MTV, the Viacom-owned music channel, has launched a virtual world: MTV House. It is a 2.5D world built in Flash, similar in that respect to Habbo Hotel. There are several different rooms: MTV One, MTV Two, MTV Hits, MTV Base, MTV Dance as well as MTV Bathroom and MTV Kitchen, all of which are accessed from a central lobby.

The main purpose at this stage seems to be to create another way for users to access MTV’s content. Heavy prominence is given to online videos, for example, which are discoverable in the different rooms. Each room also has a ‘character’ in it, an automatic avatar which, when clicked, gives a list of relevant content. In time, MTV is presumably hoping that a powerful social aspect to the world develops as well. Right clicking on the world reveals that it was built by Yomego, a virtual world development agency which offers a white label solution – it looks like this is what MTV has deployed.

The business model is to be based around advertising, in a potentially win-win situation for MTV; if House is successful, they increase user engagement with their own brand and content, as well as creating more inventory to sell.

This light weight approach to virtual worlds, with barriers to adoption as low as possible, may well be the most successful way for traditional media brands to take advantage of virtual worlds, at least initially. It stands a good chance of mainstream adoption, and is a low cost way for brands to ‘dip the toe in the water’ of virtual worlds.

House has initially been launched in the UK, and MTV intends to role the product out worldwide in the coming months. 

GigaOm has an interview with Mark Kingdon who replaced Philip Rosedale as Linden Labs CEO last April. Linden Labs and Second Life aren’t in great shape: growth, certainly in paid users, has stalled, and they are facing new competition every day which threatens to out-innovate them. The greater popularity of virtual worlds and MMOs such as World of Warcraft and Habbo Hotel, and the high-profile failure of many brand experiments in Second Life, might lead one to suggest that Second Life isn’t nearly as relevant as it once was.

Kingdom, though, is very bullish about Linden’s future. He’s disdainful towards Google’s Lively which was launched this month, comparing the vast number of consumer and enterprise use cases of his product to what he sees as Lively’s single use case: visual chat. He’s right at the moment – Lively doesn’t amount to much at launch – but Google has consistently demonstrated in the past that it can enter a space late and beat the incumbents through fast, enlightened iteration.

Refreshingly, he is aware that Second Life’s UI is far from ideal at present (potentially a key area on which Google could beat the incumbent virtual world, I would have thought). The ‘first hour’ experience of the product is irritating and counter-intuitive, and he states “We’re also working very hard to make Second Life intuitively, and maybe even delightfully, usable”.

Kingdon also confirms that an IPO isn’t in the short-term plan, which makes a lot of sense. Second Life, having been ridiculously over-hyped, is now suffering hangover from that, with many writing it off as irrelevant. They may be right, or they may be wrong, but with industry confidence in the archetypal 3D world at a low, Linden is absolutely right to postpone going public. If, in the short to medium term, they can restart growth of both user numbers and revenue (which whilst not public can be assumed not to be growing very fast, if at all, at the moment), and in the long term successfully establish themselves as the ‘glue’ between interoperable virtual worlds making money providing value added services, then they will be in a far better position than they are today. That’s a big if, though. 

Microsoft is to position its Windows Live ID as the ideal solution to managing avatar identities in an age of interoperability. In an interview carried by Reuters, Zain Naboulsi of Microsoft talks about Microsoft’s efforts to encourage adoption of its technologies in conjunction with OpenSim. Microsoft wants programming language C# Express and database system SQL Express to be used to create and run OpenSim environments. More interesting, however, is the suggestion that Microsoft will position its online identity system, Windows Live ID, as the solution to the inevitable difficulty of managing an avatar’s identity in the era of interoperability towards which the virtual worlds industry is slowly marching.

Windows Live ID is the identity system which lies behind login to Microsoft’s online services, such as Windows Live Messenger and Hotmail. It has also made it available to third party developers to use it in their services. For example, Facebook (if it wanted) could enable users to login using their Windows Live username and password. The advantage of this is clear: the user only has to remember one user name and password and can easily control which online service providers have access to their information, and Microsoft gets to be in the powerful position of an identity broker.

However, Microsoft is not the only identity provider seeking to be the answer to a widespread problem on the web. Google has a similar service, but a more high profile option is the open source, distributed OpenID system. This is arguably better than proprietary systems as anyone is able to install the OpenID software and become an identity broker. It would perhaps be a better ideological and technical fit with OpenSim. Another potential obstacle in Microsoft’s way is Linden Labs, whom we reported recently are interested in becoming the guarantor of the infrastructure of interoperability, a central part of which would presumably be managing avatar identity between different worlds.

This is a fascinating problem which has many different potential solutions, not all of them ideal for the user. Ultimately it seems unlikely that any one provider will be able to wrestle control of the coveted position of identity broker, but what is certain is that many will try.

OGPlanet, the US MMO publisher which we reported last week had been funded, has announced the opening of applications to join its closed beta for its upcoming casual MMORPG, La Tale. As with all games OGPlanet publishes, La Tale has already been released in Korea, and this beta is for the localised US version.

The game’s art style is anime, a cartoon style which is increasingly popular outside Asia, from where it originates. According to the press release “La Tale’s whimsical art style and detailed 2D worlds bring a lighthearted touch to the MMORPG genre, and have won it a large following in Asia. Simple gameplay and intuitive quests make La Tale accessible for players of all ages, while a large, immersive world promise hours of entertainment.”

From the language of the website, it would appear that La Tale is targeting a relatively young demographic, emphasising ‘cute characters’ and easy controls. If that is the case, it is certainly entering into a crowded, but large market for casual MMORPGs aimed at youngsters, most notably Disney-owned Club Penguin.

Applications for the closed beta are only open today. OGPlanet members can apply through the La Tale website.

Roo Reynolds, IBM’s metaverse evangelist, has been hired by the BBC as Portfolio Executive for Social Media at BBC Vision. Given his experience of driving metaverse adoption, it seems likely that the BBC has hired him to explore (at the very least) the possibilities of integrating their television output with some kind of virtual world.

In the past year, the BBC suddenly appears to have woken up to the wider changes of new media; the launches or revamps of initiatives including the iPlayer, podcasts and blogs indicate a wider realisation that they must create as many routes to their content as possible. Most recently, the redesign of BBC Three’s website which places user generated content at the core of the channel and makes a simulcast available, suggests that BBC Vision is seeking to drive real innovation at the intersection between traditional television media and new digital media.

Virtual worlds may seem like a logical next step. The BBC has a chance to be ahead of the curve on this one; virtual worlds have not yet reached the mainstream, allowing them to experiment and innovate in good time. Perhaps more exciting, however, is the power that the BBC has to bring virtual worlds to the fore in Britain’s media landscape. They are required by their charter to be mainstream. In order to operate in virtual worlds, therefore, virtual worlds must be mainstream – if they have not already reached it, the BBC will have to take them there.

This breathless speculation must come with the caveat that it is entirely possible that Reynolds will not be working on virtual worlds; it isn’t in his job title, and it is unlikely that the BBC would be able to be involved in virtual worlds with just one (known) expert employee. Nevertheless, any move into the space would be undeniably significant. 

EA’s CEO, John Riccitiello, has confirmed that they are developing an MMO version of the latest game in the Star Wars franchise, Knights of the Old Republic in partnership with Lucasarts.

According to an interview in Portfolio, EA is moving aggressively into the MMO space with the Knights of the Old Republic as well as an MMO based on the popular Warhammer war strategy game played with models. The two games appear to be part of a plan B, in contrast to the plan A option: acquiring World of Warcraft off Vivendi. Riccitiello confirmed that discussions took place, but a deal was not possible ‘because [Vivendi] couldn’t afford control of EA, and I wasn’t giving it up.” Basing their two upcoming MMOs on brands established and popular with gamers of different sorts already is the next best thing, as it allows EA to use its financial clout to gain a head start against the multitude of MMO competition.

The rush to MMOs on the part of ‘traditional’ gaming firms is partly because of the highly appealing subscription model. Where users can be persuaded to pay, popular MMOs are highly lucrative with the ability to sell both the game (or expansion packs) and the right to play the game. According to Riccitiello, MMOs are also part of the gaming industry’s strategy to shift off consoles and mobile devices: currently 2/3 of the game industry is based upon consoles, which is EA expects to fall to 1/2 in three years time. 

2008 feels like an exciting year for the virtual worlds market. Startups are springing up everywhere you look, established worlds have a good idea of how they need to evolve, big media and entertainment brands are interested in the space, and corporate use of virtual worlds is becoming more common. Yet there are still plenty of challenges facing this industry. With the aim of provoking some discussion, here’s ten of them.

The Wall Street Journal has an opinion piece today from Benjamin Duranske, a lawyer and author on virtual worlds, on the role that virtual worlds will come to play in the real world. Much of its content, whilst news to the rest of the world, will not be new to readers of this blog: that virtual worlds are going to be big news in the future for both consumers and brands. However, Duranske makes two points which are certainly worth considering.

He points out the increasing authority of the real world in the virtual world, particularly giving examples of the difficulties which Linden has had with illicit activities in Second Life in the past, which it is now seeking to address. The long arm of the law will inevitably get longer as virtual worlds become less of an unknown quantity in mainstream legal and law enforcement circles, and that’s clearly a good thing. It is an absolute requirement if virtual worlds are to be considered a mature phenomenon, ready to reach the mainstream, that they are seen as a tool of the real world, and not somehow other from it. The application of law in a virtual context is symbolic of that shift, as well as an important goal in itself.

The second point Duranske makes is that 3D walled gardens will not succeed in becoming the new 3D web, just as the walled gardens of the early web such as AOL did not succeed in becoming the web and mobile network operators’ walled gardens have now broken down in favour of the open web. This is perhaps no longer a controversial point; Second Life, as discussed earlier this week, is no longer attempting to ‘own’ the 3D space, and is instead pushing for open standards and to make its money acting as a guarantor of infrastructure, rather than trying to be the entire infrastructure and content itself. 

OGPlanet, a US-based games publisher which takes MMO games from Korea and publishes them in the US, has received funding from DFJ Athena, a Silicon Valley and Seoul-based VC firm. OGPlanet has been around since 2005 and has imported titles including Albatross 18, Cabal Online, Rumble Fighter, BB Tanks and LaTale (coming later this year). 

OGPlanet is free to play, and their business model centres around microtransactions which take place in-game. They are not currently profitable, but the announcement expresses a hope that they will be soon. The VC money is likely to be used to bring more games from Korea to market, and economies of scale dictate that profitability should follow from that.

In some ways OGPlanet is an odd fit with DFJ Athena, whose current portfolio does not appear to include any consumer-facing technology companies. However, both firms share the link between the US and Korea, and it is likely this which has brought them together, with a future acquirer potentially coming from either Asia or the US. 

The Electric Sheep Company, a virtual worlds design agency, have announced WebFlock, a system by which white label virtual worlds can be created. The big news is that these 3D virtual worlds will accessed through the web browser and, uniquely, be built on Flash, which means that the vast majority of web users will be able to access WebFlock virtual worlds without the need to download a plugin. This is in contrast to rivals such as Google’s Lively, launched last week, which requires the installation of special software, as well as more established virtual worlds such as Second Life, which require a full-blown client to be installed.

This announcement is a significant step forward for virtual words in their quest to reach the mainstream. Users of worlds built on WebFlock will be able to casually access them, without any of the barriers to adoption inherent with other technologies. A company seeking better engagement with its users can simply embed this on their website with the expectation that a significant number of users will enter the 3D world – an expectation impossible with other, non-flash, technologies. A comparison can be drawn with YouTube; YouTube was successful because it brought online video to the masses using a technology which made it simple – it just happened to be Flash. Electric Sheep will certainly be hoping that WebFlock achieves the same.

There are two caveats, however. The first is that the technology does not come cheap; at ‘under $100,000’, it is certainly cheaper than the option of building out a large-scale, sophisticated presence in Second Life, but it will not be an option that most companies will consider yet. Nevertheless, I suspect that many will. My second concern is that there may be a reason that no-one to my knowledge has yet built a 3D world in Flash. Flash certainly isn’t designed to handle 3D rendering, and without seeing the technology in action it is difficult to assess the extent to which Electric Sheep have overcome that difficulty. 

As the drive towards more microtransactions and other new business models for MMOs and virtual worlds gathers pace, so the payment companies who enable it are gearing up to capitalise. PlaySpan has just announced its acquisition of PayByCash, and says the merged company will be one of the "fastest growing commerce and payment services companies" supporting the online games industry.

We reported earlier this week on plans to release a Club Penguin themed game for Nintendo's DS, but it's not the only virtual world looking to make such a leap. One of the buzz games at the E3 show has been Neopets Puzzle Adventure, which uses Nickelodeon's virtual world as the basis for a mixture of puzzling and RPG-style character development.

This is what was shown off during Sony's keynote presentation at the E3 conference this week, providing a snapshot of its Home virtual world in its current incarnation, while outlining a number of major games publishers who are creating content for the world. Virtual agency Millions Of Us has been working with Sony on the world, and according to Virtual Worlds News its work is "quite evident" in this video. Intriguing...

Twinity, a virtual world from German company Metaversum which is currently in private beta, has announced the completion of an in-world replica of Berlin’s Hackescher Markt and the surrounding area. They claim that this is the first time that Germany’s capital has been rendered in 3D by a virtual world.

The replication goes beyond simple buildings. Users are able to enjoy the city’s culture, visiting virtual bars and cafes, galleries and shops. It’s also a sizeable area which has been brought into the virtual world: a total of six square kilometres.

Such a process is inevitably expensive; the accuracy of the 3D design must be far greater than normally required in a virtual world, not to mention the need to gather data from the location itself. Virtual worlds who chose to go down this route will also not be able to rely up the user generated environments – far cheaper – to the same extent. At this stage, Twinity only allows users to customise apartments.

However, the rewards are also potentially significant. It may be easier to persuade a company, such as a shop, to maintain a virtual presence if it is tied to their real-world presence – it provides natural ad targeting, in that people who live in or visit the real world area are more likely to visit the virtual replica. In addition, potential use cases for the world are greatly expanded. If I were planning to visit Berlin, I may well check out Twinity’s replica of Hackescher Markt before setting out to get a feel for the place and decide where to visit. It will be interesting to see whether Twinity is successful in its mission to develop more urban areas, despite the costs.

World of Warcraft owner Blizzard has been successful in the first stage of their court battle against WoWGlider (now called ‘MMOGlider’). They are seeking the shutdown of MMOGlider, a piece of software which automates WoW game play. The program will automatically fight enemies in the game, helping to eliminate the sometimes tedious grind inherent in many MMOs which is required in order to upgrade the character. The judge in the case has ruled that WoWGlider breaches the terms of service of the game. However, this is only the first stage in the case, which is to go in front of a jury later this year. WoW is unfortunate to have allowed itself to be presented as the ‘bad guy’ in this case, turning up with a lawyer and private investigator at the developer Michael Donnelly’s house, according to the BBC.

The case may well centre on whether it is MMOGlider, or the WoW user, who is breaking the Terms of Service with the use of the MMOGlider. The software is locally installed, rather than accessing WoW directly, and it may be difficult for WoW to demonstrate that the developer is breaking any terms of service by simply developing the program.

It is arguable that the existence of tools such as MMOGlider is an inevitable consequence of the often boring grind required to build up characters in many MMOs. The cynical point of view is that MMOs build in grind in order to make their game more addictive; if, in order to enjoy a game to its maximum potential, a user is required to spend many hours doing simple tasks to build up a character, the user is likely to do that. Grind, one could say, turns what would otherwise be a casual game, into an addictive and immersive experience. 

Pulling website content into Second Life is one of the key features required for enterprise use, so Daden's launch of its Daden Navigator web browser is sure to make a splash. They're billing it as the first "publicly available web browser" for the virtual world, in contrast to the browser launched by Linden Lab earlier this year, which Daden says didn't allow users to click on links to surf between different sites.

Nickelodeon's Kids and Family Group has released the latest comScore Media Metrix figures for the performance of its websites - judging by the scramble last time they did this, we expect Disney to hit back with its own press release imminently. Anyway, the Nick figures show good growth for its Neopets virtual world, which increased its unique visitors by 22% in June, while average time spent on site per user grew 19% to 173.6 minutes.

The launch of Google’s virtual world Lively last week has perhaps been marred by its enthusiastic adoption as a venue for ‘cybersex’. A glance at the most popular rooms on the service reveal that those looking for cybersex have flocked to Lively. I suspect that this is because of the room-based architecture, rather than a single persistent virtual world; Lively’s structure encourages niche interests which prefer to exist separately from other interests. Another factor is that there is little clear ‘purpose’ to Lively at present. It is not targeted at any particular demographic, there is no economy and certainly no tasks to accomplish. It is perhaps best described as a simple 3D chat client at present, which of course necessitates its users to find something to chat about!

Google’s moderation policy at present appears to be that sexual content is fine, but no nudity is permitted. In some ways this is sensible; there’s a clear line in the sand which nevertheless allows a broad range of activity. However, I would argue that it probably needs to move beyond this position if it wants to achieve good growth; for the mainstream audience choosing which room to join, it will be off putting to have to wade through sexual rooms before finding one which suits them. Google may also have difficulty justifying the availability of these rooms to members of Lively between the ages of 13 (the minimum age to join according to the terms of service) and 18.

The solution may be simply to remove all sexual rooms from the index; Lively rooms are embeddable, and this would allow the sexual content to continue, but without Google facing the risk of offending those who are not looking for it. 

ON24, which provides services to allow companies to host events in virtual worlds, as well as more conventional methods of communication such as webinars, has raised over $8 million in funding in equity and expansion capital. The venture round was led by U.S. Venture Partners, Canaan Partners and Rho Ventures. Gold Hill Partners led the expansion capital financing. ON24 have now raised over $46 million.

The main purpose of the financing is to ‘accelerate ON24’s global expansion of the sales, marketing and client services organizations; and product development initiatives, including ON24 Virtual Show and the company’s flagship webcasting platform.’ So they’re spending it on everything, apparently. The big news, however, is the development of the recently launched Virtual Show. This is a comprehensive platform which allows companies to host professional events within virtual worlds, like trade shows and job fairs, which integrate with more traditional content such as webinars.

The hype period of such events is over, and one could argue that now is the time for the real work to begin. ON24 cite environmental concerns and the economic downturn as key reasons why virtual worlds events will become more popular, and as it becomes easier (most crucially, cheaper) for the ‘average’ enterprise to put on an event in a virtual world there is certainly scope for growth in the sector. They cite an impressive range of clients, including IBM, Cisco and the US Dept for Education, suggesting that their message of ‘events 2.0’ is being responded to positively.

It will be fascinating to see the development of virtual events in this post-hype era as decisions are based not on the desire for a short-term PR boost, but on longer-term cost and marketing benefits.

Joe Miller, VP of platform and technology development at Second Life, has been busy. In the second interview we have covered this week, he talks to the MIT Technology Review about the challenge of pulling in 2D content and data from the web into the 3D environment of Second Life.

The status quo isn’t particularly elegant- links to the outside web from Second Life open in an external browser, which therefore forces the user to leave the world, and their conversations in it, temporarily in order to look at outside content. It also precludes what could be called the ‘casual consumption’ of external content- in order to see content from elsewhere on the web, you actually have to select it, rather than being able to take a quick glance at its display somewhere within Second Life –a far more efficient option.

Miller talks about a few things Second Life’s doing to improve the situation. They’re trying to ‘create a capability to create a rich way to experience a variety of media types that typically have to be seen or read or processed on the Web in 2-D’. The article gives an example of a business card in Second Life which automatically updates with the content of an external website, a virtual MP3 player which connects to a web radio service, or a whiteboard which displays an MS Word document being collaborated on by a couple of users.

The most obvious advantage of such progress is the usability – it will give a much more pleasant and efficient experience in-world. However, the enterprise benefits are also clear. If you want to be able to hold meetings in virtual worlds, the need to be able to collaborate on a document within that environment is arguably essential. The dream possibility for virtual world vendors is that their worlds become the way the whole web is accessed; a starting point through which the rest of the web, 2D and 3D can be experienced and relationships managed. The ability to pull 2D content and data into a 3D world is an absolute necessity if that goal is to be reached.

News on business model change continues apace. This time, it’s the Korean-developed MMORPG ROSE Online’s turn to leave the subscription model behind in favour of an all-free service. They state, quite simply, that the decision is based on the desire to ‘attract more users than ever before’. The service, which used to cost $12.99 / month, will now be entirely free.

Existing subscribers will no longer have to pay, and will receive compensation from the in-world currency for each day of subscription they have left on the change over date, in a more which the company will be hoping avoids any angry backlash from paid customers who feel hard done by. All subscriptions will be cancelled on July 29th.

This comes in a week where Second Life’s Joe Miller gave an interview in which he discussed Second Life’s need to embrace open source alternatives such as OpenSim, implicitly acknowledging that the days of their subscription model are numbered. This isn’t exactly a surprise, given the already plummeting numbers of paid users of Second Life.

The possible collapse of one of the incumbent business models needn’t necessarily be too concerning to the industry, however: there are plenty of others to chose from. Both advertising and virtual goods sales seem likely to grow well in the future. In the meantime the paid business model is still undeniably doing well for some, most notably World of Warcraft. And Twin Skies, an MMO announced yesterday, is also intending to use the subscription model. 

We wrote about the rumoured Xbox Live avatars on this blog a couple of months ago, when news leaked out onto the web of Microsoft's plans to take on Nintendo's Mii avatars on Wii. Now the news is official though: Microsoft unveiled its avatars last night at its E3 press conference. What's more, they're pretty much exactly as they appeared in those early leaks.

Music has always been a big feature in Second Life, but when it comes to branded activity, it's been restricted to artists and labels rather than music manufacturers. Not any more though: Gibson Guitar is opening its Gibson Island tomorrow with a live gig. The company's island is (naturally) in the shape of a Les Paul guitar, and offers several venues for in-world gigs. Playing the launch is Bob Welch, apparently a multi-platinum solo artist back in the 70s, not to mention a former singer/guitarist for Fleetwood Mac.

When Disney recently reorganised its virtual worlds and gaming activities into one division, I speculated that it might mean more cross-platform activities, such as Club Penguin making the leap to games platforms. Now, the company has provided confirmation, with plans for a dedicated DS game called Club Penguin: Elite Penguin Force.

Gaia Online, a social network and virtual world aimed at teens, has raised $11 million in a Series C round led by Institutional Venture Partners. This brings the total investment in the company to over $20 million. Gaia is an example of an established, more ‘traditional’ online community, established in 2003 around forums, which has grown into the virtual world space. They are now in the process of building an MMO with a persistent virtual world to follow their room-based architecture at present, and it seems likely that a good proportion of the round announced today will be spent on development of that project.

The Gaia business model is based around the purchase of virtual goods, bought with Gaia gold, which is earnable through activity in-game, or through purchase. It seems to be seeing considerable success: the company claims that there are over 100,000 transactions in the Gaia economy each day.

Despite the impressive numbers quoted by the company, of over 5 million monthly unique users and over 1 billion total forum posts, there are possible indications that growth has stalled: Compete in fact shows a fall in users over the past year, and whilst such services are far from infallible, they can provide some indication of performance. If there has been stagnation, then Gaia will no doubt be hoping that this injection of cash can revitalise growth and, with the launch of their MMO, move them along towards a successful exit. 

Meteor Games, the games studio recently established by NeoPets founders Adam Powell and Donna Williams, has launched a website for its upcoming MMO, Twin Skies. The game will be targeted at children aged 8-18, aiming squarely for the gap between the likes of Club Penguin and World of Warcraft. The MMO is to feature 3D graphics, as well as a series of casual mini-games, existing outside the MMO itself, but which will ‘actually change the MMO world itself’.

The premise is set out:

Over a hundred years ago a ship carrying thousands of human refugees came to the end of its twenty-year voyage through the cosmos. As it closed in on its destination there was a terrible accident on board, and it was forced to divert and crash-land on the smaller planet.

Some who managed to escape in time ended up on the larger, greener planet. They suddenly found themselves surrounded by strange creatures, magic the likes of which they’ve never seen, and amazing cities built by the native civilizations and races.

Forever separated, and now with no way to leave their new home, these humans forged their own destinies in amazing new lands. The twin planet in the sky a constant reminder of the friends and family each left behind. 

It is interesting that they are leaning towards the subscription model for the site, as opposed to advertising. Given the target market, which has little disposable income and little ability to spend on the web given the lack of a credit card, this is a bold decision which may make adoption difficult. Further, it is a model which is increasingly failing for Second Life, as its numbers of paid users plummet. Meteor will, however, take comfort from the success of WoW, which is following the subscription model.

Meteor is aiming for a launch in 2009, and is no doubt hoping to replicate the enormous success of NeoPets, which now enjoys over 48 million users, although of a different age group to that targeted by Twin Skies. 

New World Notes has dug up some stats from the middleware company which provides Second Life’s voice chat facility, Vivox, on the use of voice within the virtual world. The headline figure is an increase from 30% of Second Life residents using voice at the time of last year’s Virtual Worlds Forum, to 50% today. That’s a significant increase, and reflects a perhaps surprising willingness of SL residents to move away from the traditional text chat.

Even more interesting, I think, is the fact that unique daily users of voice is up almost 100% in the same period. That suggests that the availability of voice is a feature which SL users are finding increasingly valuable; this is not a gimmick that is occasionally fun to use, but a standard method of communication adopted and regularly used by many millions of Second Lifers.

The adoption of voice has notable implications for the future of virtual worlds. First, virtual worlds become more like the real world. When a person speaks, using their voice, over the VoIP system in Second Life, that is the voice of the real person, not the avatar. The avatar becomes an instrument of the person’s ‘real’ identity, and virtual worlds become a tool rather than a destination in themselves. This will please those who seek to use virtual worlds in enterprise; that use case sees avatars and virtual worlds as simply a method of communication, rather than the immersive ‘metaverse’ other from reality.

The second implication of the growing importance of voice in virtual worlds is on brand presences. Might it become necessary for brands to put together a ‘virtual world call centre’ to handle communication with in-world users? On the one hand, if that expectation existed, it would add to the cost of establishing a presence, due to the need to train and establish systems – as well as presenting a risk of irritating users. However, it could provide an effective way of hard selling to users: something which we have not yet seen on a wide scale from brand presences in virtual worlds, and which would likely be an unwelcome addition from the point of view of the consumer. 

Most of the virtual worlds for kids are tightly controlled, with restrictions on user-generated content - as you'd expect, given the age of their target audience. However, Shidonni is a new service that takes a different tack - letting kids create their own virtual worlds, create animals for them, and then share them with friends.

We're all waiting eagerly for the debut of Sony's Home beta virtual world for PlayStation 3, but the company's at work on something equally interesting called Dress, which is billed as 'interactive fashion software'. Developed in Japan, it lets users create original fashion designs, see how they look on avatar models, and then (eventually) upload them to a community via the PlayStation Network.

We've got opinions on Google's new Lively virtual world service, and doubtless you have too. But so do some of the key players in the virtual worlds industry, two of whom have just strung their thoughts together on their personal blogs. Ex Linden Labber Cory Ondrejka (now at EMI) and Electric Sheep Company CEO Sibley Verbeck have both broadly welcomed Google's full-scale entry into the market, but with reservations / qualifications showing they're not jumping onto the hype bandwagon surrounding Lively.

Reuters has an interview with Linden Labs VP Joe Miller on the changing business model of Second Life. Second Life’s fundamental business model of selling land has been undermined by the development of OpenSim, an open source equivalent virtual world allowing anyone to host their own Second Life equivalent. However, rather than try to restrict the growth of OpenSim, Second Life is working to increase its adoption. Only this week, it announced that it had successfully effected a teleport from Second Life into an instance of OpenSim.

The motivation? Miller argues that Linden Labs’ first priority has to be to expand the virtual world market, and that the way to do that is to aggressively push for open standards. Second Life then hopes to be able to make money through ‘value added’ services, although the specific nature of those services is not given. It would appear that ultimately Linden Labs would seek to become the equivalent of Versign’s role on the internet in virtual worlds, acting as a guarantor of the basic infrastructure of metaverse interoperability.

It’s a bold plan, but it needs to be. Second Life’s paid user base is diminishing fast, and whether Linden likes it or not, the scarcity of land in virtual worlds will be eradicated as competitor worlds with alternate business models are developed. Miller is surely right, therefore, that Linden Labs’ best hope of a sustainable business model in the future is to drive these changes which are inevitable anyway, hoping to end up in a position to make money from tying all the infrastructure together, and perhaps through its established currency, the Linden Dollar.

The spanner in the works though may be other virtual worlds who don’t want to join in the open standards fest. How do Linden Labs respond if Google, for example, chooses to go its own way with Lively, creating its own standards but without any desire to interoperate with Second Life? Linden Labs is relying on its competitors doing things its way, which is always a risky situation for a business to be in.

BarbieGirls.com, the successful virtual world targeted at (you’ve guessed it) pre-teen girls, has launched a tool for parents to better inform them and their daughter about safe use of virtual worlds. ‘Parents Place’ acts as a resource for information on internet safety, as well as incorporating the ability for a parent to place limits on and control their daughter’s account in the virtual world. Parents signed up to the scheme will also be informed if the user is warned or banned for asking for or giving out personal information.

This strikes me as a very sensible way to deal with a real concern. If virtual worlds are to target the market of young children, they must be seen to be taking action to reduce the risks inherent in their users’ interaction with others online. Parents tend to be wary of the internet activities of their young children for two reasons: because they are often ill-informed about the nature of those activities, and the lack of the same level of control available in the real world.

Nevertheless, there is a difficult balance to be struck. I imagine that part of the thrill of virtual worlds to young children is precisely because of the scope they provide for activities outside their parents’ sphere of influence. The absolute and obvious need to maintain high standards of internet safety must balance against the need for some limited recognition of a child’s need to explore and experiment online. If virtual worlds get the balance wrong, they risk either being held responsible for dangerous consequences or producing a product which no-one wants to use.

The UK Government recently fully adopted the findings of the Byron Review into ‘Safer Children in a Digital World’, which looked at a range of issues of child safety, and came to broadly sensible and enlightened conclusions. The report can be found here.

Did you know that Apple is launching the 3G iPhone today? You'd think someone would have written about it... Okay, so the 3G iPhone has been hyped to the skies, as has its related App Store - the new section of iTunes where Apple will sell downloadable applications for the iPhone and iPod Touch. The latter launched yesterday with more than 500 applications, from games and music to social networking, business and productivity. However, despite speculation, there are no virtual worlds as far as I can make out.

When it was announced earlier this week, Google Lively seemed to be focused on people's own personal virtual rooms, rather than branded rooms. However, it seems the latter has just as much of a role to play in Lively's future, with the announcement that the National Geographic Channel has launched its own Lively space, created by virtual agency Millions Of Us.

You can always rely on the Virtually Blind blog to get to the legal nitty-gritty in relation to virtual worlds - it's a really useful resource. Now it's been poking into the Terms of Service for Lively, Google's new virtual world platform. It's got some criticisms too. You should read the whole post, but I've summarised the key points below.

Virtual worlds firm Worlds has announced plans to launch a virtual world in partnership with Darryl McDaniels - otherwise known as DMC out of hip-hop pioneers Run DMC. The world will be called DMC World, although that name may run into problems, given that it's already used for a popular DJ online community.

Virtual worlds are at the stage where many businesses have realised that they are going to be game changing in so many different ways, but they are so new that many are unsure where to start with them. The Industry Standard has put together an article outlining the high costs involved to enter the game in a big way - IBM suggested a number in the low six figures for a full-scale branded presence in a metaverse - as well as where to get started if your business is not quite ready to invest that money!

Although a little Second Life-focused, their advice boils down to using and immersing yourself in virtual worlds. This is absolutely vital; the importance of entering into a virtual world fundamentally ‘getting’ its dynamics and nuances cannot be understated for a successful campaign. When a brand goes into a virtual world they are taking a risk, and some of the high profile disaters of engagement with Second Life in particular could have been avoided if there had been a greater understanding of the community.

They also suggest some books, including ‘Second Life for Dummies’, to give a better understanding of what is happening. I think I can do one better though: come along to the second Virtual Worlds Forum in London on the 6-8th October!

There’s an excellent article from CIO on the growing use of virtual world technologies to monitor mission critical processes, particularly data centres.

A key example cited in the article is that of the IBM, which is essentially using virtual worlds to create a new interface to manage its data centres. They suggest two major advantages from the approach. The first is the ability to represent more information, more efficiently through a 3D rather than 2D interface, enabling better monitoring of, for example, airflow and temperature throughout the data centre. The second advantage is the improved communications facilities which virtual worlds can provide within the data centre. Experts can be brought into the ‘data centre’ more easily, without the need for physical presence, and prospective customers can be shown around the data centre without being granted access to the real thing.

Adoption of virtual worlds technologies as primarily an interface to something else, rather than an end in itself, is a growing trend. We have become used to the metaphors of the 2D computing age of folders, files and desktops. Now that the capability for 3D metaphors has emerged, it will make sense to take advantage of them occasionally (although certainly not always – for amusement watch the video embedded below for how not to produce a 3D interface). With businesses constantly pushing to increase efficiency, more effective interfaces can deliver real benefits, and innovation can be expected to continue.

I posted yesterday about the enthusiastic response of leading virtual world agencies Rivers Run Red and Millions of Us to the launch of Google’s Lively, and their membership of the Preferred Developer Program. It appears that their enthusiasm for the new product is not universal among agencies operating in the space, however; Sibley Verbeck, CEO of The Electric Sheep Company, another key agency, has posted a very well argued piece about the weaknesses of Lively, and his doubts over its potential for success. He is by no means writing it off, but does raise concerns with the strategy.

Verbeck’s post is well worth a read. Nevertheless, I do not share his pessimism. Below is an outline of his main points, and my take on why Lively might actually be in a very strong positon.

1. Verbeck correctly points out that Lively does not appear to be aimed at tweens, who have established themselves as by far the most important demographic in virtual worlds, as evidenced by the success of the likes of Club Penguin and Habbo. Indeed, Google’s Terms of Service explicitly prohibit the site’s use by those under 13. However, ultimately the tween market isn’t the most valuable. Tweens have little disposable income, and little ability to spend it online, and whilst it is clearly possible to make money from serving them, it seems likely that the biggest financial successes will come from virtual worlds which serve those with more financial clout. Compare the $860 sale of Bebo, traditionally the social network of tweens in Britain, to the $15 billion valuation of Facebook, far more universal in its appeal.

2. He points out the expressed desire of enterprise to have virtual worlds deployed in business uses such as meetings and training to be behind the firewall. Whilst this desire will certainly continue for some time, the growing adoption of enterprise-targeted products such as Google Apps and Salesforce clearly demonstrates that CIOs are slowly coming over to the idea of trusting large companies with strong track records with their data. Google is successfully positioning itself as such a company.

3. It is suggested that big media will not want to put their content in Google’s virtual worlds for fear of losing control over advertising models. However, as I argued yesterday, revenue share in some form is likely to be a big part of the model Google adopts for virtual world advertising. If Google can bring traffic to Lively, and monetise that traffic both for itself and those whose content it hosts, then big media may well be in no position to avoid Lively.

5. The requirement for a plugin is undoubtedly a major barrier to the adoption of Lively; it is highly irritating. However, Google has a couple of different, and not necessarily mutually exclusive, options here. It already distributes a lot of software, and it could try to push Lively out with other products such as Desktop. More likely, and less shady, would be for Google to seek to create some sort of open standard to break the chicken and egg problem. It has a track record in this tactic, with its open sourcing of Gears a prime example. Google is surely likely to try and create an open and widely used industry standard for the placement of virtual worlds within the browser – it will not be without competition in this goal!

6. The lack of any ability to sell virtual goods is seen as a weakness by Verbeck. However, if I am right, and Google sees ads as the central part of any effort to monetise Lively, then such a feature is not of vital and urgent importance.

Millions of Us and Rivers Run Red, two major virtual world creative agencies, have announced that they are to participate in Lively’s Preferred Developers Program. As part of the program, Rivers Run Red has been given the ability to design for Lively from launch, and they have built an example room – Avalon – embedded below.

Rivers Run Red is anticipating a high level of demand from brands wishing to get involved in Lively: “In the last five years, we have encountered high demand from companies looking to provide 3D experiences for their communities on the web,” said Justin Bovington, CEO of Rivers Run Red. “Lively by Google is a promising solution for web-based 3D environments and will only help to make the prospect of the 3D Web a reality.” That Google has established a ‘Preferred Developers Program’ so early on in the life of its product is a clear signal of its intent to work closely with agencies going forward, further lending weight to the view that advertising is going to play a key role in Google’s development of Lively in the future.

On a separate note, one has to sympathise with digital agencies, forced to establish ‘new design teams’ to develop for each virtual world launched. Second Life and IBM’s successful ‘teleport’ from one virtual world to another is only one aspect of the push to open standards; in order for efficient development for virtual worlds to take place, it is essential that the push for open standards for metaverse development continues. 

Virtual Worlds Management has released a report detailing the known investment activity in the virtual worlds space this quarter. The headline figure is that $161 million has been invested, down from Q1 which saw $184 million. The variation is largely caused by where big investments happened to take place, however, and the overall picture is of an extremely active investment community, clearly finding plenty to back. According to VWM, this brings the total known investment in the space this year to $345 million- a very healthy figure.

This is only likely to increase now that Google has entered the space; it both vindicates the market and opens up a new option for an exit. In the parallel Web 2.0 space, Google has acted as a key driver of growth through its often high-profile and high-value acquisitions of key companies in the space, and has become a favourite exit since web IPOs fell out of fashion following the bust. The VCs (and start-ups) will no doubt be hoping that Google replicates this activity in the new market it has entered. Its only relevant acquisition thus far was the acquisition of AdScape in February of last year for $23m.

I speculated in my post on the launch of Lively that Google’s prime motivation for launching its virtual world is likely to be a desire to make advertising work on the platform. It would be utterly incongruous with the business models of other Google products if it attempted to pursue the ‘freemium’ model of plays such as Second Life. Further, it must be a strong possibility that Google pushes some heavy innovation in a market which has, arguably, yet to take off, or at the very least come anywhere close to reaching its potential.

Google’s thinking on what is important with advertising can, I think, be boiled down to three key aspects: a high degree of targeting, automation and revenue sharing. None of these is unique to Google, but their application to virtual worlds could create a real shift in the way advertising is done.

At the moment, targeting of adverts, or perhaps more appropriately brands, in virtual worlds is not at all widespread. It may be that this will not be such an important part of advertising in virtual worlds given the obvious difficulties in how it might work: would objects in the same virtual world differ from user to user as Google somehow calculated relevancy? More likely, I think, Google would allow brands to create their own ‘rooms’ within Lively, and then find a way to promote those rooms more heavily to those users most likely to respond positively, possibly ultimately through a 3D interface, rather than the current HTML directory.

Automation has been a key factor in the success of AdWords: the bidding system ensures the most efficient price for each slot, and complex algorithms determine when and where the ads are shown. Again, lessons from this may not be transferable into virtual worlds. It is far harder for a brand to build a 3D presence than to enter the few words needed to place an AdWords advert with Google. However, it seems highly likely that Google will try to find a way to lower the barriers to entry to virtual world advertising – it has always been aware of the importance of long tail advertising, and will be very keen to try and make that work in its new market. This may be done through a better design interface, or through exploring other forms of in-world advertising which require less design work (such as an embedded video); what seems certain, however, is that it will be a priority for Google.

It is revenue sharing which perhaps offers the greatest scope for shake-up of the way advertising works in the metaverse. AdSense allowed Google to vastly increase its inventory, and it is likely to attempt to do the same with Lively. Might I be paid, for example, to clothe my avatar with Nike clothing? At the moment virtual world users are more likely to expect to buy items from brands, and being paid for the same thing would certainly be a shakeup of the business models.

I've mentioned it before, but Summize is a really useful tool to track web buzz about a specific subject, since it's a real-time search engine for micro-blogging service Twitter. As a topical example, I've run a search on Lively, to see what people are saying about Google's new virtual world platform. Below are a snapshot of comments from just the last hour - I haven't selected them out to make Lively look bad - it's pretty much every English-language comment that isn't just a pure link. But it has to be said, Lively doesn't seem to be going down well - for technical gremlins mainly, but also for its lack of Mac support. Read on, it's an instructive snapshot of people's views...

There are many reasons you wouldn't want to play World of Warcraft on an iPhone. The lack of a mouse and physical keyboard for starters, not to mention limited screen estate. However, there are many technical reasons why getting WoW running on an iPhone is an impressive feat, so hats off to Alan Joyce, who's managed it using Telekinesis, an application that provides a web gateway for controlling a Mac with an iPhone. In other words, the laptop in this video is what's actually running WoW, but the iPhone is acting as a separate screen and controller.

Habbo has teamed up with Conduit to launch a new 'community toolbar', which will make it easier for its users to chat, post in forums, and be updated with news feeds, My Habbo homepages and friend alerts, even when they're not within Habbo itself. "The functionality lets members see their friends, messages and Habbo news from anywhere online," says Teemu Huuhtanen from Habbo. "It's a constant reminder of the community that's waiting for them, and therefore encourages them to keep coming back."

It's easy to look forward, particularly when analysts are predicting mushrooming growth and revenues for virtual worlds in the next five years. But sometimes it pays to look back too, either to learn lessons from the past, or simply to remember where this industry started from. The Virtual Worlds Timeline should certainly help with that. It's just been launched by artist Annie Ok, who describes it as similar to a Wikipedia entry, with users able to register as editors and add events they feel were important. So far, according to Reuters it's got 14 editors and dozens of entries - mainly focusing on launches of key worlds, and relevant films/literature. It's not the first project of this nature, mind - check out the, ahem, Virtual Worlds Timeline too.

Open standards and interoperability have always been the central reason that the World Wide Web, as opposed to the BT Web and the Verizon Web etc, exists. The same will ultimately apply to virtual worlds; without it, they will never reach the mainstream as impatient users refuse to sign up for and download software for virtual world after virtual world.

That’s why Second Life’s announcement today that they, in conjunction with IBM, successfully teleported an avatar from Second Life to an OpenSim-based world is so important. Whilst a consumer solution has yet to be released, and no ability to move virtual property between worlds yet exists, it does indicate a recognition on the part of market leaders that interoperability is one of the keys to mainstream adoption, and is a necessary staging post on the way to a mature market.

There is a careful balance to be achieved, however. A crucial part of the appeal of virtual worlds to brands and consumers alike is their power to engage with niche audiences. The risk is that interoperability could lead to a single, homogenous metaverse with little variation. The question which must be answered is how can full interoperability be achieved, without compromising the individual character of niche virtual worlds.

In the past few moments, Google has launched its own virtual world, Lively. Lively ‘rooms’ are accessed through the browser (both IE and Firefox) after the installation of a plugin. A number of rooms have been pre-created by Google, and are listed on Lively’s website, and users are also able to create and customise their own rooms. These can then be embedded on blogs and other websites in much the same manner as a YouTube video, although they can only be viewed by users with the plugin.

At this early stage of the project, it perhaps makes most sense to regard this as an extension of the Google Talk product, providing a rich 3D interface. However, as Google builds up the functionality and Lively gains traction, it is inconceivable that Google will not seek to heavily leverage Lively to develop its advertising inventory. Traditional web advertising is taking a knock as users learn to ignore adverts, and the challenge is now on to find a way to create more engaging, and more effective, advertising. It is clear from this launch that Google views virtual worlds as a key part of the picture of future advertising, and it could therefore not afford not to enter the space.

Google’s decision to brand the product as Lively, and to keep it at its own domain name, perhaps suggests that it is somewhat experimental. Alternatively, it could indicate that Google is initially aiming its virtual world at a specific target audience, perhaps children. 

Google’s entrance into the market will inevitably have dramatic consequences; it brings unparalleled resources to the development of the space, and I would have thought that if anyone is able to make virtual world advertising work better, Google is. It must be said, however, that at the moment Google’s sign in system isn’t working for me - maybe there’s hope for competitors yet!

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Vivaty Scenes, launched today in public beta, are individual 3D web presences. They are positioned as the successor to the personal web page; they are similar to their HTML counterparts in that they have URLs and are accessed through a web browser (currently only IE7, but with Firefox and Mac support to be added soon). They also provide the ability to aggregate media from sites including YouTube, Flickr and Facebook- another key similarity with the ubiquitous personal blog.

Vivaty’s business model is traditional. They have launched a co-branded Facebook application with Coke Zero and Target which allows users to create their own dorm room and then add products available from Target (a US retailer) or featuring the Coke Zero brand.

It is clear from the outset that Vivaty are aiming squarely at the mainstream market, and they look like they have a chance of reaching it. The 3D online presence is likely to be a concept which requires little explaining – it will simply be seen as an extension of what many web users are already doing. They’ve also made the wise decision to sit on top of the real social graph. Vivaty Scenes are initially available as a Facebook application or with AOL Instant Messenger, allowing it to take advantage of real-world relationships – something that mainstream users are likely to be far more comfortable with. It also opens the prospect of more casual interaction with a virtual world; gone is the need to spend hours developing relationships and identities which will exist exclusively in the virtual world if the relationships and identities already exist in the real world.

Marketing using virtual worlds and serious games is well established, but still in its difficult infancy in terms of brands figuring out what works and what doesn't - hence the various high-profile examples of times when it hasn't, particularly within Second Life. However, to say 'virtual worlds don't work for brands', as some media reports have, isn't telling the whole story. With that in mind, One to One Interactive's T=zero research division has released an interesting new report, entitled 'Serious Games for Marketing: Learnings from Corporate and Amateur Efforts in Second Life'.

So, it seems the rumours of Second Life expanding to PS3 and Xbox 360 weren't true - at least not yet. They'd been flagged as a potential announcement during Linden Lab board member Mitch Kapor's keynote speech yesterday during Second Life's fifth birthday celebrations. Instead, he talked about how Linden Lab's virtual world may change and develop in the next five years, opening up to a wider audience. His speech is well worth watching (above) - he talks about the shift from the 'pioneer era' (i.e. early adopters) to more pragmatic use, and also announces plans for a Linden Prize of 10,000 Linden Dollars for "superlative achievements in elevating the human condition through Second Life".

As head of HP's Innovation Program Office, Philip McKinney's job involves thinking long-term about new technologies, so it's encouraging that he's optimistic about the future for virtual worlds. Even if that future is a couple of decades down the line.

Electronic Arts is certainly exploring links between its games and physical retail, what with the recent deal seeing Ikea furniture sold within The Sims 2. That game is also the subject of a deal going the other way, with retailer H&M now selling an outfit designed within The Sims 2 by a player, as part of a competition.

For all its long delays, Sony's Home virtual world for PlayStation 3 is still eagerly awaited, both by gamers and by the virtual worlds industry. Launching a virtual world on its scale on one standard platform owned by millions of people around the world could have a huge popularising effect on the space. Or it could be a huge flop. Sony is naturally targeting the former, with PlayStation Network director Eric Lempel promising a "high quality service" from day one, and comparing it to Gmail.

There's an ongoing debate about how best to monetise virtual worlds, but one thing's not in doubt: the flow of investment into the virtual worlds space from two sources: venture capitalists (for commercial virtual worlds), and research grants (for medical / educational applications). The Nelson Marlborough Institute of Technology in New Zealand is the latest beneficiary of the latter, receiving $500,000 for a new project exploring educational uses for Second Life.

Nielsen Online has released some stats on the most popular websites in the UK, but also the fastest growing ones in terms of total minutes. Two virtual worlds make it into the top ten of the latter chart. Read on to find out which...

Work continues apace on the line-up for this year's VWFE, which is taking place in London on 6-8 October. We've signed up 20 international speakers already, with a new crop of names just being announced, including the likes of Sulake, Gaia Online, Sony Computer Entertainment Europe, BBC Children's Interactive, and IBM. Click below to see a full list of the freshly confirmed speakers, and details of how to book.

Another day, another new virtual world aimed at kids. This one's called Revnjenz, and its focus is on cars. To be specific, users buy 'collectible driver's licences' in real-world stores, which give them access to the Revnjenz virtual world.

US firm 8D World has raised "meaningfully more than $1 million" in its first-round of funding, from Spark Capital. The company is reportedly working on a massively multiplayer online game, although the company is in stealth mode, so hasn't given many details on its plans.

There's a clear upsurge of interest in Second Life and virtual worlds from the medical profession, from hospitals to healthcare charities. The latest to get involved is Cigna, which is launching a pilot virtual health project within Second Life.

Okay, so the publishing of a logo isn't big news normally, but Lego Universe's is worth covering. Partly because the MMO/virtual world is one of the most hotly anticipated, but also because of the way Lego set about creating the logo, enlisting the help of fans of the brand. The company asked for people to create their own logos for the world and post them on the Lego Universe messageboards, and were inundated with responses. You can see some of them at this post on the subject, which explains more about the thinking process behind the eventual logo.

The big guns of the media world are certainly training their sights on the virtual worlds space, resulting in intense competition between the likes of MTV, Disney and Nickelodeon. Turner subsidiary Cartoon Network is in the fray too, and has just announced a new virtual world developed by its Cartoon Network New Media division. It's called Mini Match, and it's got a clear focus around gaming.

We've seen just a few virtual worlds launch in the last year or two, and a few 3D web browsers too. However, Yoowalk aims to combine the two. It's an intriguing new virtual world launched by a French firm, which also ties in instant messaging clients and avatars.