IM, Avatars and virtual worlds.

Slide 1: Avatars, IM and Communities said… Join us they How Important will Avatars Become in the Role of IM and Communities? Vincent Sider BT – November 2007 © British Telecommunications plc

Slide 2: Breaking News – 27/11 Philippine PRESIDENT Gloria Arroyo is now literally “in the game.” Arroyo activated her virtual self called an “avatar” in the Second Life online game and community as part of the launch of the Philippine National Innovation Strategy in the National Innovation Summit in Makati City. Take-home: Avatars are being discussed beyond the Telco industry © British Telecommunications plc

Slide 3: Agenda 2. In consumer messaging, is the role of the avatar set to increase and be the channel through which all IM is communicated? 4. What are likely future evolutions? 6. Which communities are active in this area and how do they differentiate themselves? © British Telecommunications plc

Slide 4: Avatarization ? A significant portion of the senior execs ( including my boss ) in the Telecom Industry are highly skeptical of avatarization in general, and are convinced that video -- as in video-conferencing, vlogging, video on i-Phones, etc. -- to be more important and just better. © British Telecommunications plc

Slide 5: Avatarization ? Some people think that avatars will be ubiquitous , but the threshold for mass adoption may be very high. © British Telecommunications plc

Slide 6: Avatarization ? Some think avatars won’t make sense until we can all talk to our computers verbally © British Telecommunications plc

Slide 7: Avatarization ? Some think that unless avatars makes solving our problems faster or easier people won’t use them © British Telecommunications plc

Slide 8: What do I think ? Avatars are the cheapest and strongest emotional link between a service and a user. © British Telecommunications plc

Slide 9: Emotional Link And emotional intensity has a direct correlation with 1) How much attention a user is willing to spend on any given product/service (Quantity) 3) The Quality of the interaction the user is likely to have with this service. © British Telecommunications plc

Slide 10: What is at stake ? Attention… Users are saturated with more content they could possibly consume in a lifetime © British Telecommunications plc

Slide 11: What is at stake ? Attention… Their attention is the most valuable currency © British Telecommunications plc

Slide 12: What is at stake ? Attention… People spending time in VW are extremely attached to their avatars with careful attention given how they represent © British Telecommunications plc

Slide 13: So the question is not … In consumer messaging, is the role of the avatar set to increase and be the channel through which all IM is communicated? But rather… If avatars create a strong emotional link, are they going to become a proxy for user’s identities? YES NO YES NO © British Telecommunications plc

Slide 14: The trends We need to capture the trends that will confirm or disconfirm the fact that avatars are going to become a proxy for a user’s identities ( personas). © British Telecommunications plc

Slide 15: Trend 1 Shift from standalone avatars applications to avatars in social network and blogs © British Telecommunications plc

Slide 16: Trend 1 : Standalone Avatars expands Importing / IM and VoIP Security Mobile phone Company size / Business model / SDK available Exporting of integration extension financial position costs extension Avatars Built-in face Difficult as uses Yes, supports Yes, although Under Discussion Part of larger Per user license fee recognition. custom, head-only smartphone client. functionality is company. / negotiable format. limited. Technically Difficult as uses Video playback No. Skype client Part of larger Spirit Technology possible. custom format. only. group which licensing. provides VOIP solutions. Technically Difficult as uses Video playback Unknown. Skype client, plug- Start-up Negotiable. possible. custom format. only, ins for MSN, Yahoo, AOL, Google Talk Technically None. Yes, ringback tones Unknown. Skype web portal Part of larger Unknown. possible. on some phones, (appears as caller company video/images. ID) (Comverse) Technically None. Yes – for Yes – character WeeWorld.com, Part of larger DA Technology possible. video/images and generation and Skype, Instant group. licensing (e.g. Java application. animation SDK Messaging plugins mobile content platforms) Technically Difficult as uses Yes – for MMS Yes – component Skype plug-in. Start-up, with Unknown. possible. custom, head-only messages and full for integration with several major format. client for Symbian. other apps. customers. Technically None. Images and videos. Unknown. Mainly for customer Start-up. Unknown. possible. support avatars. © British Telecommunications plc

Slide 17: More examples •Example 1 : Gizmoz expands in video •Example 2 : Voki lets its users export their avatars along with voice recordings to social networking sites in that case Scene Caster © British Telecommunications plc

Slide 18: Trend 2 : Toward virtual worlds Avatars moving into virtual worlds The ultimate customer experience? (compared to the web ) © British Telecommunications plc

Slide 19: Are VW the ultimate customer experience ? What is the ultimate customer experience ? • It fits who I am – My generation, age group, gender, lifestyle, politics – It’s all ‘about me’ – I’m playing, not working at it (life’s a game) – My friends are all here – It’s a regular, normal part of my life • I’m getting service – I’m not just a customer – I ‘co-create’ my product – I’m getting exactly what I want – Famous people are here too – Advertising is not intrusive © British Telecommunications plc

Slide 20: Virtual Worlds versus Web 2.0 Feature Web 2.0 Vworlds Game-like quality Medium* Very high Tied to a generation Gen X/Y GenX/Y & V Virtual products Very low (widgets?) Very high Visits from celebrities Common Rare->common Advertising Very common Very rare User-generated content High Very high Customer experience translated to UNDERPERFORM ??? Sales Social Networking Very High High for immersed customers *Facebook is looking at this: people are delivering casual games that allow you to interact and that's a step in the right direction © British Telecommunications plc

Slide 21: Audience ? 3D Second Life 3D There “2.5D” vworlds – ~10 million unique accounts –1 million accounts – 8.3 million logins –1 million active accounts – 40% female monthly (inflated?) – ~40% female (declined from – most between 13-25 – 25% of US kids & 2006 peak near 50%) (“Generation V”) teens 3-17 log in – most between 25-44 monthly (“Generation (“Generation X” +some “Y”) Kaneva V”) ~800,000 accounts – 75% in just a few years MySpace FaceBook WoW (traditional RPG) – ~100 million accounts (inflated – ~30 million active accounts – ~10 million active 2x?) (inflated?) accounts (inflated?) –genders split evenly – originally 18-22, now – average age 26-32 skewing older – (“Generation X” + “Y” + Older – 16% female – genders split evenly Generation” V”) –(“Generation X” +some “Y”) Take-home: 2.5D vworlds aimed at kids and teens will soon have significant audiences relative to web 2.0 © British Telecommunications plc

Slide 22: Time Spent ? • Second Life (Aug 2007) – 24 hours/month (counting actual monthly logins) – 3.7 hours/month (counting unique accounts) • MySpace (Aug 2007) – ~ 30-90 minutes/month per page (depending on how you count) • Wow (Aug 2007) – ~80-100 hours/month(!) Take-home: vworlds have smaller audiences, but individuals are MUCH more engaged © British Telecommunications plc

Slide 23: Trend 3 : Multiple Avatars Accounts in VW © British Telecommunications plc

Slide 24: Trend 3 : Multiple Identities Why multiple accounts ? It is all about context For people using their PUBLIC IDENTITY it’s an extension of their real world social networks and activities and in some cases is business driven. This group includes people from real world companies with VW presence as well as those researching virtual worlds. > Augmentalists ANONYMOUS users view VW as a standalone virtual environment. A place where they leave their real world identity behind and immerse themselves in the dynamics of the world. These people have wide social networks inside VW and engage heavily in the activities and events. > Immersionalists © British Telecommunications plc

Slide 25: Trend 3 : Anonymous Communications Vodafone in conjunction with Rivers Run Red has opened up the beta version of a cross-world communication device allowing avatars to send and receive texts and voice calls in and out of Second Life. Pause for breath. In terms of pricing, calls and texts from inside SL are free until Nov 30 and then will be in the L$300 per minute range after that. Communication from the real world into SL will be charged at network operator standard rates. This is a great example of a metabrand - a service or product created purely for virtual consumption. Metabrands are a main growth area for real world brands looking for revenue streams from virtual worlds. Vodafone has actually been in Second Life for almost a year now, with their metaphorically themed island. So, it’s good to see that there’s now a good reason to visit the venue. What will be interesting to see is the type of people using the service - I would assume this will be of more use to Augmentalists than Immersionalists. Called InsideOut and positioned underneath the ‘Make the most of Now’ campaign, the device is driven by a branded HUD. The HUD is available from Vodafone island in SL or from the dedicated website. Both parties have to have the HUD in order for the service to work. © British Telecommunications plc

Slide 26: Trend 3 : Anonymous Communications Vivox: Second Life Phone Boxes and Second Phone Client • $14 a year for unlimited use • Voice calls with other Second Life users (if they have client and are registered) • Breakout calls to North American Landlines • IM to other second life users through client (if they have client and are registered) Star Fruit: Offer free SMS • Anyone can have one on their land • No sign up required © British Telecommunications plc

Slide 27: Trend 3 : Anonymous Communications Features • Next Generation Design • Allows user to call any number globally (GSM, VoIP, PSTN) charged per usage or free (TBD) • Hardwired ClicktoCall to agreed sponsor • Outbound SMS charged per usage or free • Video Advertising Display (BT Vision etc) • Hyperlink to BT Broadband Deployment • Advertised on BT website with SLURL (Second Life URL that links to locations) • Popular areas of second life (via internal contacts) • Corporate areas (Dells etc) of second life • Your islands ? Take Home :Today, the value of communicating through the Avatar in Virtual World is to remain anonymous © British Telecommunications plc

Slide 28: Summary • People use Avatars to represent their self image • Avatars expands into blog, mobile, social network and virtual worlds • People use Avatars to communicate anonymously • People using Avatars in VW are much more engaged • Virtual Worlds aimed at kids and teens will soon have significant audience compared to web 2.0 © British Telecommunications plc

Slide 29: Agenda What are likely future evolutions? © British Telecommunications plc

Slide 30: Agenda Evolutions for Standalone Avatars © British Telecommunications plc

Slide 31: Future Evolutions : Emotions “They pay attention to the facial expressions and body language and that is how they know what’s going on inside a person’s head-by condensing fact from the vapour of nuance” Snowcrash. © British Telecommunications plc

Slide 32: Future Evolutions :Emotions • Vivian’s avatar smiles. The background is populated with hearts. © British Telecommunications plc

Slide 33: Future Evolutions :Emotions • Jeff’s avatar morphs to indicate that he’s making arrangements for their trip. © British Telecommunications plc

Slide 34: Future Evolutions :Emotions OKI Face Communicator © British Telecommunications plc

Slide 35: Face Recognition • Software to realize visual communication using 3D character – Visualized emotional expression • Enable you to express difficult emotion only by voice using face expression of 3D character, background image and emotional movement – Privacy Protection • Able to hide your own face while video calling or video chatting • Able to hide your background – Fun and Lovely Contents (3D character, Background image) • Able to replace character and background image according to your feelings on the day Privacy Protection Visualized Emotional Expression Fun & Lovely Contents Happy Visualized Angry Surprised Sad © British Telecommunications plc

Slide 36: Agenda Evolutions for Avatars in Virtual Worlds © British Telecommunications plc

Slide 37: Future Evolutions:Remote Gaming for VW messaging • “Always connected” with your Virtual World Identity – mobile access – (IP TV access) © British Telecommunications plc

Slide 38: Future Evolutions : Presence awareness contact list First life meets Virtual World but people remain anonymous – © British Telecommunications plc

Slide 39: Future Evolutions : Interworking “Users of MySpace are building representations of themselves - their page is, in a sense, their avatar. Doing that in a 3D space can lead to more interaction between people” Kaneva encourages the use of true identities and personal information to help people interact. Virtual interaction is much more immediate than in real life. "It's much easier to read your profile in the virtual world and see you have the same friends and interests and, all of a sudden, you have those connections." Take Home : Social networking sites are all about asynchronous interaction and virtual worlds are about real- time interaction . . . there is no question they will come together © British Telecommunications plc

Slide 40: Future Evolutions : Avatar “outer”operability A virtual character, or avatar, for all the virtual worlds in which people play is the goal of a joint project between IBM and Linden Lab. The project aims to open up virtual worlds by introducing open tools that work with any online environment. The project started by IBM and Linden Lab aims to create a universal character creation system so people only have to create a digital double once. While the character's appearance may change depending on where it is taken, its basic characteristics, such as looks and underlying personal data, would be retained. • Initially the partners will concentrate on creating a system that lets people move between worlds. • Later will come the universal character creation system that lets people create a single avatar to venture into online worlds. Alternatives Platforms like Multiverse, Metacrasher, and OpenMetaverse , just to name a few are looking to connect virtual worlds and allow users to transport their avatars and items across multiple platforms. © British Telecommunications plc

Slide 41: Future Evolutions: VW comms Interconnect Mobile Fixed IM IM Gaming Remote Presence SMS IM Voice ideo Multiverse Meet Me Japanese second life SP1 SP2 HUB © British Telecommunications plc

Slide 42: AGENDA Which communities are active in this area and how do they differentiate themselves? © British Telecommunications plc

Slide 43: Community Map Avatars Virtual Worlds MMOG + Blabla, City Pixel, Cybertown, Dubit, Faketown, Mokitown, Moove, Taatu, Towechat, Vside, Whyville… © British Telecommunications plc

Slide 45: How do they differentiate? Second Life (Social) Dressup -> Vproducts ->User-created Second Life (shopping) ? IMVU Second Life (RPGs) Moove There Kaneva Most tween & teen 2.5 vworlds, Entropia e.g.Stardoll, Habbo, Whyville, Club Penguin WoW Gaming -> Themed Shopping -> Social Networking Take-home: as tween/teen vworld residents grow, they will look for RPGs, or a themed shopping experience in the same of new virtual worlds © British Telecommunications plc

Slide 46: Communities inside the community Top Second Life destinations, with sex and ‘dwell’ regions stripped, Sept. 2007 – Shopping - New Brussel Mega Mall (shopping and dance club) - 106K - Phat Cat's Jazzy Blue Lounge (PG ballroom dancing/shopping) - 92K - Hedonistic Isle (beach/nightclub/shopping/etc.) - 55K RPGs - NORSIM MultiSIM (Mature goth/cyberpunk RPG, multiple areas) - 78K - City of Lost Angels (Mature Goth/Cyberpunk RPG) - 46K - Midian City (Mature goth/cyberpunk RPG, Multiple locations) – 43K - Romance - Heavenly Rose Gardens (romance and wedding) - 54K - Blackhearts Cafe (80's lounge/music/dancing/romance, multiple areas) - 53K - The Lost Gardens of Apollo (romantic PG, multiple locations) - 45K – Education - Music Academy Online Take-home: Eliminate sex in vworlds attracting older audiences, and what’s left is shopping and RPGs © British Telecommunications plc

Slide 48: Conclusion Generation X & Y : Today, avatars are mainly used as an anonymous way of communication in Virtual Worlds © British Telecommunications plc

Slide 49: Conclusion Generation X & Y : As virtual worlds grow, if these users see a value in remaining anonymous, it is likely that Avatars will be an important channel for their communication capabilities © British Telecommunications plc

Slide 50: Conclusion Generation X & Y : If social networks merge with 3D world it is likely that the avatar will become an identity proxy © British Telecommunications plc

Slide 51: Conclusion Generation V : Avatars are being used as a way to represent their self-image in dedicated 2.5D virtual worlds or as add on to their IM clients © British Telecommunications plc

Slide 52: Conclusion As Generation V grows, their attention will shift to Role Playing Games as well as themed shopping experience on top of social networking use © British Telecommunications plc

Slide 53: Conclusion As Generation V grows YES YES In consumer messaging, the role of the avatar is set to increase and be the channel through which IM is communicated © British Telecommunications plc

Slide 54: Final Note Success is recognising that Avatars can have multiple forms A key to success is to promote a way for avatars to interconnect between social network or/and 3D worlds, just like SMS success was based on interconnect A key to success is to remain open and curious and look for which next virtual worlds will capture generation V audience © British Telecommunications plc

Slide 55: Recommendations for carriers 1. Expose your IM/Presence capabilities to Avatars in virtual world and social networks, gain experience and link them to your existing IM/Presence service (fixed and mobile) 3. Encourage interconnect with other service providers © British Telecommunications plc

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