Philips Electronics, Starwood, Toyota, PA Consulting (for its clients)
Job fairs and anonymous contact
ABN Amro, PA Consulting, IBM, Dell, etc.
Internal Communications, Training, & Education
Sears (in collaboration with IBM)
Enables customization of kitchen, garage, home bio
Links to Sears.com for purchase
Launches real and virtual products simultaneously
Enables avatars to customize vehicles in SL
Recruiting Job Fairs
Springtime Training with avatars from Shanghai, Beijing, Stockholm, and Gotland Internal communications
In-house training and education IFL at SSE and Duke Corporate Education Co-developing and running virtual team building exercise
But, is anybody out there?
10:15 pm, Tuesday,
Sept 4, 2007 (GMT+1)
ABN Amro -0
Adidas – 0
Cisco - 18
BMW - 0
Dell – 6
IBM – 23
Nissan – 0
Reebok - 0
Sun Microsystems - 1
Vodafone - 2
Insead – 0
BMW In-world Wells Fargo, Starwood Hotels, American Apparel are pulling out
Critical mass is restricted due to technology * Municipality (kommun) wikipedia.org 1,391 138 195,250 Richmond, VA 1,479 0.06 98 Online, Mon, Sep 3 8:15 pm (GMT+1) Freebie Planet #1 popular site 10,316 786 8,143,000 New York 24,759 87 2,153,600 Paris 1,083 450 489,760 Gothenburg* 4,164 188 782,890 Stockholm* Density (people per km 2) Land area (km 2) Population Location
And is anyone making money? What are these individuals selling? Real estate & land rentals Simulation & training environments, games Clothing, accessories, skins, animations Art, design, furniture SL, Sept 3, 2007 Total of 424 >$5000 $2000-5000
What about Return on Investment in SL? We have a long-term approach to costs and RoI. We have qualitative goals, to expand and develop our presence. - BMW We have no targets for RoI. -ABN Amro There needs to be some RoI eventually, but this is a long-term project and we are just looking at the potential . - Vodafone Financial Times , May 2007
So, what do people do?
Most popular places (total time spent there)
Cote D’Azur West
Money Tree Island
Life is Life
Phat Cat’s Jazzy Blue Lounge
SL, Sept 3, 2007
What can we do that we “ cannot” do in real life?
Improving skills Learning to sail with the Starboards Yacht Club
Training for natural disasters A tsunami simulator by National Oceanographic and Atmospheric Administration
Collaborating and co-creating Open source museum with open source art
Experiencing the “impossible” UC Davis Medical Center has simulated schizofrenia
What is happening in other virtual worlds?
Secure virtual workplaces
Completely private virtual business worlds offering tools to conduct business and collaborate
Fortune 500: Johnson & Johnson, Novartis, Motorola, Intel
Disney pays $350 mln for Club Penguin
Kids 6-14 in Canada
700,000 paying users
Virtual goods and online merchandise
Cyworld - A world where “MySpace meets Second Life”
40% of entire population
$96% of 20-30 yr olds in Korea regular users
120 mln 2006 in Korea
More video traffic than YouTube
Computer Sweden , June 2007
Entropia Universe = MMOG + MMORP?
$360 mln in-gaming turnover 2006
Real cash economy
Won bid over SL/others to be China’s “first homegrown virtual world where millions will work, communicate, and be in love”
7 mln local + 150 mln overseas Chinese
Five virtual banking licenses auctioned for $404,000 May 2007
Financial Times , June 2007
MMOGs still dominate
World of Warcraft
374,000 hours played each day or 50,000 man days each day
8.5 mln players worldwide
Xfire.com, MMPORG.com, June 2007
Korean Free to Play (F2P)
4 of top 10 MMOGs in Western world
Silkroad Online #1 in West
MapleStory with >50 mln players
Where are we today with virtual worlds?
Business opportunities limited?
Many real world firms have virtual world presence, but difficulty turning it into an effective, profitable sales channel
Primarily for marketing or learning experience
No RoI success stories for real world firms
Required resources outweigh short-term benefits
Limited number of individual success stories
~150 other individuals making >$5000 per month
“ Trapped” in real world activities?
Virtual worlds overhyped?
Growth lower than appears, small compared to MMOGs
Reality vs. fantasy?
Disconnect between real world companies/products and SL fantasy avatars
What are organizations doing in virtual worlds?
Four scenarios for 2012
What should you do?
So, what about the future of virtual worlds?
Gartner Group, April 2007 By the end of 2011, 80% of active Internet users (and Fortune 500 enterprises) will have a “second life”, but not necessarily in Second Life.
How can we look into the future?
How we think the future will be
How we want the future to be
What the future can be
Two underlying questions
How advanced will the usage of virtual worlds be?
Widespread use across all dimensions, high user demands
Forces: Economic development, digital divide, environmental pressures
How integrated will virtual worlds be?
Cooperation between different worlds, VW & RW
Forces: Security, technology, legislative, political
Four scenarios for 2012 Fragmentated worlds Integrated worlds Advanced usage Less- advanced usage
Ease of mobility
Dominance by gaming generation
Traditional vs virtual business
One Converged Universe
Easy avatar & asset mobility
High scalability & security
Individual “MMOGs” dominant
Many competing, limited worlds
Difficult avatar & asset mobility
New business models
What should you do in virtual worlds? Experiment, “play”, and learn Stay on the look-out Consider creating independent operations Don’t forget other emerging media
“ I think there’s a world market for maybe five computers.” Thomas Watson, Chairman of IBM, 1943 “ There is no reason anyone would want a computer in their home.” Ken Olson, President, Chairman and Founder of Digital Equipment Corporation, 1977 “ Heavier-than-air flying machines are impossible.” Lord Kelvin, President, Royal Society, 1895
We digitized audio and video, why can’t we just digitize, you know, Earth” Philip Rosedale, CEO Linden Lab
Australian Communications Authority (www.acma.gov.au)
Vision 20/20: Future Scenarios for the Communications Industry: Implications for Regulation
Christenson, C., The Innovator’s Dilemma , 1997
Gartner Group Press Release
The Future of eGovernment: Scenarios 2016 (www.vinnova.se)
More information: http://ssesecondlife.blogspot.com/
An increasingly connected world new friends family local colleagues old friends old colleagues colleagues at other offices Just a click away… virtual communities local communities old classmates
The number of unique users in Second Life has increased exponentially within one year SL, September 3, 2007
Who’s in world in Second Life? Number of active avatars SL, September 3, 2007 Sweden is #17
US avatars spend the most hours in world SL, September 3, 2007 Total number of hours in world Sweden is #17
25-34 year olds spend most time in world SL, September 3, 2007 Total number of hours in world ~40% Female
“ We think it has potential as a way of doing business. We’re just experimenting with it ourselves but we see massive potential in the human interaction you can bring. It’s a big browsing environment in many ways.” - IBM Director
Is there critical mass on Second Life? * Municipality (kommun) wikipedia.org 43 988 42,060 Motala* 63 712 44,750 Online, Mon, Sep 3 8:35 pm (GMT+1) Second Life 177 41,284 7,252,330 Switzerland Density (people per km 2) Land area (km 2) Population Location
Toyota educates teenagers on credit
Marketing and sales
Sells items of clothing
Offers 15% discount if buy same item in real world
Are businesses anywhere else?
2 mln users
Wells Fargo left SL for AW
7 mln users (mostly teens)
Digital goods and marketing
Target, Wal-Mart, Kellogg, Nintendo, Walt Disney
External communities are growing in importance! Online communities Schoolmates Avatars Previous work colleagues Large portion of new ideas and formal collaboration relationships come from external contacts Organization Physical Networks
Encourage an open innovation attitude Not all the smart people work for us. We need to work with smart people inside and outside the company. The smart people in our field work for us. If you create the most and the best ideas in the industry, you will win. If you make the best use of internal and external ideas, you will win. Closed attitude Open attitude Chesborough 2003
The wisdom of crowds (Surowiecki 2004) Closed Expensive Complex Accurate Open Inexpensive Simple Close enough Hinton 2007
Crowdsourcing: Capturing the wisdom of crowds
What is it?
Customer participation in business and business development
Why the interest?
What can organizations do? Innovation Product development Content generation Decision making Funding Sales & marketing Distribution Brayrie 2007
Innovations - www.innocentive.com
Problem solutions - The Goldcorp Challenge
Decision making & funding Brayrie 2007
Product development - www.ideastorm.com Brayrie 2007
Building the Dell community Brayrie 2007
Communities A driving force in crowdsourcing
What should you do?
Approach as a disruptive technology
Enables a new strategy or new business model
Enables a larger population of less skilled, less wealthy people to do things in a more convenient, lower cost setting
E.g., Telephone, digital photography, PCs, Linux
Think wikinomics and peer-to-peer exchange
Mass collaboration by free individual agents to improve a given operation or solve a problem
E.g., Boeing, Chinese motorcycle industry, P&G
Christenson 1997, Tapscott & Williams 2006
What should you do?
Experiment and “play”
Find and engage the enthusiasts in your company
Support, but make aware of “risks”
Don’t ask your leading customers what they think
Stay on the look-out
See how they affect the path to a future scenario
Consider creating independent organization for more serious efforts
Anonymous bank buying virtual banking contract on Entropia Universe
But don’t forget other emerging media
Coca-Cola uses combination of all new media channels, e.g., YouTube, MySpace, SL, MyCoke
All the things right, but not the right thing!
Increasing pace of change! Spread of Technology (Penetration rates years after introduction, Year I =Year Invented)