Virtual Worlds and Entrepreneurship _Teigland

Leveraging Virtual Worlds for Real World Results Dr. Robin Teigland, aka Karinda Rhode in SL Stockholm School of Economics www.knowledgenetworking.org www.slideshare.net/eteigland Serdar Temiz Royal Institute of Technology Photo: Lundholm, Metro December 2009

Today’s discussion
Introduction and some facts and figures on virtual worlds
A look at business opportunities in virtual worlds

- You on Youtube?
No, Hulu and Itunes, but I lost the USB for my MP3. It’s MIA, so is my GPS.
This PDF won’t show up on my LCD.
Call your ISP.
- I could send them an SMS or look it up on the cookie wiki. So you on Google now?
- No, Bing.
- You are such a Yahoo! Oh, just got poked on Facebook.
From?
My mom wants to know if she can use Paypal for Netflix.
Did she ever sell her Imac on Ebay?
- No, but she got WiFi for the Xbox.
Can we have a real conversation now?
- Sure, can we have it in Second Life?
NPR, Internet’s 40th Birthday, 2009

History tends to repeat itself…. Innovation, financial crisis, industrial revolution, … Steam engine Internal combustion engine Microelectronics Late 18 th C Late 19 th C Late 20 th C Schön 2008 Third industrial revolution?

Here comes the Immersive Internet O’Driscoll 2009

eBay allowed people to sell their personal items in a worldwide yard sale, the Immersive Internet will allow people to sell their personal skills and abilities in much the same way. Kapp & O’Driscoll, 2009

A growing universe of Virtual Worlds http://www.youtube.com/watch?v=wMOqI3hH9Gs http://www.youtube.com/watch?v=0CijdlYOSPc

Around 150 virtual worlds
Q1 2009:
$68 mln invested in 13 virtual world companies

VWS have many different models Around 150 virtual worlds

What are Virtual Worlds?
Persistent , computer-simulated, immersive environments
Shared space/ co-presence with possibility for socialization and community
In some cases, ability to manipulate/ create content
In some cases, virtual economy and currency
http://www.youtube.com/watch?v=wMOqI3hH9Gs

Virtual Worlds
Open-ended–built by residents
Social environment, affinity groups
Boundaries for access and building
Commerce, education, innovation, and…?
MMOs
Scripted narrative – created by game designers
Goals and objectives, ranking systems
Rules for gameplay, winners and losers
Entertainment only?

What financial crisis?
Increasing members
Increasing turnover
Increasing companies
Wonderland

Number of Accounts-Age (Cumulative) 39% increase from Q1 2009

40 mln members
135 mln members
Two popular Kids & Tweens worlds

Building skills in virtual environments
My CV
Leading a virtual team of 30 individuals from across the globe
Creating and successfully executing strategies under pressure
Managing cross-cultural conflict without face-to-face communication

“ Clearly if social activity migrates to synthetic worlds, economic activity will go there as well.” Castranova http://www.youtube.com/watch?v=-ahqjBeknT0

Gartner’s hype cycle Virtual Worlds today?

Virtual world revenues USD 3bln in 2009 US spending on virtual goods passes USD 1 bln in 2009

Microtransactions business model

http://www.businessweek.com/technology/content/apr2009/tc20090429_963394_page_2.htm Zynga: - Majority revenues comes from 2% to 10% of users who pay $1 an hour to play premium games or buy virtual goods - Annual sales of about USD 100 mln Playdom: - Estimated USD 50 mln in sales per year from virtual goods Social Gaming Network: - Estimated USD 50 mln sales mainly from virtual goods Weeworld: - Estimated 2008 revenue USD 10 mln+ mainly from virtual goods Habbo: - Estimated 2008 revenue USD 50 mln from virtual goods - 10% monthly players pay $10.30/month

800,000 users USD 420 mln turnover 2008

Entropia Universe by MindArk
Virtual universe with real cash economy
Fixed exchange rate to US Dollar, 1 USD = 10 PED
Five banks auctioned for USD 404,000 in 2007
Real life bank license granted by Swedish Government to Mind Bank in March 2009
Ability to develop skills and sell virtual goods
Asteroid space resort sold for USD 100,000 in 2005
Jon “Neverdie” Jacobs – Self-made millionaire
Clothes Against Violence – limited edition virtual jackets sold for more than same model of real world jackets

Entropia uniquely positioned

Second Life by Linden Lab
1.4 million residents logged in/60 day period
71,200 logged on Monday, Nov 30
Average age=32, 43% female, 55% non-US
Grew 33% in one year to 126 mln at end of 2Q 2009
Economy grew by 94% 2Q 2008-2009
270 Linden dollars ≅ USD 1
350,000 hours of use per day
68,000 people making profit
IT Businessedge, Linden Lab, 2009

Some things to do in SL
Take a guided tour at the IBM Business Center
Visit a nuclear power power plant at Science School (Univ of Denver)
Experience a tsunami at Meteora (NOAA)
Learn and experience the holocaust at the Holocaust Museum
Test your health literacy at Healthinfo Island (Group owned)
Diagnose patients at the Respiratory Ward at Imperial College
Fly a plane at Boyington Airfield (Group owned)
Experience schizophrenia at UC Davis
Learn English at ESL (English as a Second Language)
Help make the world greener at Univ of Innsbruck
Join the innovation team at Philips
Play basketball at Ballers City (Group owned)

Self-made millionaires http://www.youtube.com/watch?v=Mg4TwOqVprw&feature=related
Jon “Neverdie” Jacobs
Paid USD 100,000 for asteroid space resort
Bank owner in Entropia
Anshe Chung
Started with < USD 10
Community developer
Bank owner in Entropia

What business opportunities are there outside VWs?
Products:
Consultation
VW construction
Examples:
Grönstedt Group
Electric Sheep
Millions of Us
Rivers Run Red
Virtual Italian Parks
Cisco Hospital of Future – Palomar Hospital in SL

What about making money inworld? SL, Sep 2009 Total of 593 Number of individuals Monthly USD profit SL net profits

How do people make money inworld?
Services:
Hosts, dancers, personal shopping assistants
Virtual goods:
Furniture, fashion, skins, scripts, anything that can be designed
Professionals:
Educational instruction, training, simulations, consulting
Property management/ownership:
Clubs, shops, recreation sites
Real estate:
Developing, brokering, management

SL Marketplace: Buying and selling goods http://www.xstreetsl.com/

Buying and selling Linden Dollars https://www.xstreetsl.com/modules.php?name=Currency http://www.crossworldsxchange.com/

Virtual credit http://www.firstmeta.com/consumers

Redgrave – One virtual boutique
Numerous stores selling all kinds of wares and services in-world
International customer base
Easy payment scheme: Microtransactions
Global work force: Microemployees

Virtual Things for Real Money

New Citizens Inc – A successful non-profit
Provides services for SL residents
Est. 2005
Staff of 150
Raises more than USD 13,000 / year to cover costs
Its instructors and event hosts are paid

Showcasing current products IBM’s Green Data Center

Developing training & education programs Play2train
New employee training, eg policies, organizational culture
Skills training, eg sales
Virtual teaming

Facilitating the virtual workforce
Completely private virtual business worlds offering tools to conduct business and collaborate
Fortune 500: IBM, Intel, Johnson & Johnson, Motorola, Novartis, Unilever

Training and education IFL at SSE and Duke Corporate Education Co-developing and running a virtual team building exercise

Co-creating solutions Philips Design Group Lead-user innovation workshops

Creating a new fashion brand
With Florida State University fashion design
New brands designed and showcased on catwalk during annual Miss Calypso on Planet Calypso
Users / players vote on designs
Clothing potentially produced in real life

Finding and recruiting talent globally
Amazon.com job fair
Benelux job fair
Accenture island
IBM island
Entrepreneurs
Microemployees

Our innovation workshop area

“ Flow” leads to creativity
Four steps
Getting inspired
Knowledge sharing
Brainstorming
Voting
Giovacchini, Teigland, Kuhler, & Helms 2009

The upside of VW business
Low entry barriers, software often free
VWs humanize technology
Young generation already there, “grown virtual”
International reach
Microtransactions
Microemployees
The only limit is your own imagination

The downside of VW business
Some hardware and internet requirements
Poor “user friendliness”
Real world skepticism
Security – theft of IP, scams
Inworld vandalism – griefers
Not regulated
Difficulty in creating attraction
No seamlessness between worlds
Which world tomorrow?

One view of business models in SL http://dusanwriter.com/index.php/2009/07/13/in-world-business-models-and-second-life/

The future of 3D internet Before the first plate of aluminum is even bent for production, the passengers will have flown the plane, the crew will have serviced the plane, and the pilots will have flown the plane. CEO of Boeing supplier

What are the implications for traditional industries? “ Soon all fashion designers will be originating their designs and managing the production in virtual worlds ….Why such a dramatic change? Economics, pure and simple .” Shenlei Winkler, Director Fashion Research Institute Learn how to become an SL Fashion Designer at Fashiontech.wordpress.com/

Which professions will be revolutionized?

Will the playing field for SMEs be leveled? Giovacchini et al. 2009 Innovation workshops bring together users from across the globe

From the mobility of goods to the mobility of financial capital to … ...the “mobility” of labor?

China is making efforts in virtual worlds “ The real China is only a piece of land. We believe that there must be a China in the virtual world and the real world.” Robert Lai, Chief Scientist, CRD “ Here in China the value of such items is taking off as teens can’t afford the real world items and are compensating by getting a virtual item that has more ‘online’ status.” -KZERO blogger

We digitized audio and video, why can’t we just digitize, you know, Earth” Philip Rosedale, Chairman Linden Lab

DN Aug 20, 1996

Thanks and see you in world! Karinda Rhode aka Robin Teigland [email_address] www.knowledgenetworking.org www.slideshare.net/eteigland

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Virtual Worlds and Entrepreneurship _Teigland

by Robin Teigland on Sep 22, 2009

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Virtual Worlds and Entrepreneurship _Teigland — Presentation Transcript