Vw and business models feb 2011


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Presentation given at Stanford on Feb 8 to visiting Danish delegation as part of workshop organized by Peter Lindgren of ICI, University of Aalborg

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  • Metaplace closed on 1 January 2010. Metaplace  was a  software platform  intended to democratize the development of  virtual worlds . [1]  The platform is developed by  Areae  (now officially changed to Metaplace Inc.), the company established by  Ultima Online  and Star Wars Galaxies  designer  Raph Koster . According to the official website, the platform is "client-agnostic", which means that virtual worlds developed on Metaplace can be accessed using any device that connects to the Web. Client was planned to use Flash plugin VastPark is more than a single virtual world. Instead, it is a scalable and secure platform that can be deployed behind the firewall, hosted or run on a cloud service. The VastPark platform has 2 component platforms: The Virtual World Platform (including our highly extensible plugin framework) and the Web platform (including the Web Services framework and supporting web applications such as our social network platform).
  • Make some comments based on April meeting we had at SRI looking at onboarding and sales training; and re what AstraZeneca and Apple and others are now doing
  • Right now, most of the action—numbers of users and money—is in entertainment, certainly if we see MMOGs as part of the VWs. But there also are lots of universities and other educational institutions in Second Life (over 200 or so) as well as in Active Worlds, for instance. However, use of VWs for work is much smaller today—for a variety of reasons, many of which we will no doubt hear more about as the day progresses. This slide tries to describe where we are today and to present a bit of speculation as to what might lie ahead—based on my own thinking and discussions I have had with others, including a number of conversations at a couple of VWs events at Stanford University about a week ago. Phase 1: The SL hype cycle has been played out and we might be in the “trough of disillusionment” (in Gartner’s vernacular) and re Justin saying SL “poisoned the well” Now, Disney (investing $100 mill or so in 10 VWs), Viacom with its MTV Networks (already has 11 VWs) and investing at a similar level to that of Disney, etc. Lots of others jumping in (and each new toy will have its own virtual community, etc) so Supply will explode and then likely see a “market adjustment” and a correction. NOTE: Don’t pay too much attention to the exact positioning or slopes of these lines; they are all illustrative Work: actually doing work; L&T: preparing to do work; but latter is of course work related; Also note apparent come-back of SL as more of an enterprise platform but will be clearer by end of 2008 (re IBM, etc)
  • Note issues and Qs around the terms used here and vagueness in that what is "active Internet users", etc. So if a few users in a large company are using VWs at some level, does that mean they have "active users in a VW?" And, with VWs, do they also include MMOGs, like WoW, etc? Use White Board and put 10, 20, 30, 40, 50, 60, 70 and 80 and take vote on how thinks what the percentage will be by end of next year. Has anyone seen any estimate based on surveys done of Fortune 500 or Fortune 1000 companies about whether, and to what extent, they use VWs. Note the difficulties also around that, as many companies have small pilots and other projects going on around their companies that no one might have full visibility over; re J&J for instance, acct to what Jennifer Swayze said; they closed her project but she knows of two other projects that are still going on in different parts of the company
  • Vw and business models feb 2011

    1. 1. © 2009 by Strategic Business Insights. All rights reserved. Virtual Worlds and Business Models Eilif Trondsen Director, Strategic Business Insights [email_address] http://www.strategicbusinessinsights.com
    2. 2. Agenda <ul><li>Definition </li></ul><ul><li>VWs and Business Models: Conceptual Framework </li></ul><ul><li>Demand & Use of VWs </li></ul><ul><li>Supply & Technology </li></ul><ul><li>Adoption Issues </li></ul><ul><li>Future </li></ul>
    3. 3. Key Characteristics of Virtual Worlds* <ul><li>Shared Space : The worlds allow many users to participate at once. </li></ul><ul><li>Graphical User Interface : The worlds depict space visually, in styles ranging from 2-D “cartoon” imagery to more realistic 3-D environments. </li></ul><ul><li>Immediacy : Interaction takes place in real time. </li></ul><ul><li>Interactivity : Many worlds allow users to alter, develop, build, or submit customized content—but differences exist among virtual worlds. </li></ul><ul><li>Persistence : The worlds continue to exist regardless of whether individual users are logged in and active. </li></ul><ul><li>Socialization or community : The worlds allow and encourage the formation of in-world social groups like guilds, clubs, cliques, housemates, and neighborhoods. </li></ul>* 3D Immersive Environments
    4. 4. Virtual Worlds and Business Models Conceptual Framework Supply Side/Enabling Technology Demand Side/Adoption; Consumers/Enterprise Create VALUE for users through applications <ul><li>Play games in VWs--for free or using &quot;freemium model&quot;. With </li></ul><ul><li>free basic play, but pay for enhanced play or premium service, </li></ul><ul><li>and pay for virtual products and services </li></ul><ul><li>Ad model does not work as well in VWs today, as most don't </li></ul><ul><li>have sufficient number of users (and many of most popular </li></ul><ul><li>VWs are for kids) </li></ul><ul><li>VWs can lower operating costs, including costs of collaboration </li></ul><ul><li>as well as enhancing collaborative work </li></ul><ul><li>Open source VWs--enable building customized worlds for </li></ul><ul><li>particular purposes that can generate revenues </li></ul><ul><li>Co-creating value with customers or partners </li></ul><ul><li>Affordances of VWs enable &quot;richer/deeper&quot; forms of collaboration </li></ul>
    5. 5. Emerging Applications of Virtual Worlds for &quot;Serious Work&quot; <ul><li>Collaborative work All industries with distributed project work (IBM, Intel, Unilever) </li></ul><ul><li>Meetings & Events All industries (Cisco, Oracle, IBM and others use VWs and Virtual Meeting Platforms (Unisfair, InXpo, CGS, Digital Reactor, On24, and others) </li></ul><ul><li>Learning & Training Universities and industry (Silicon Image, BP, AstraZeneca, DoD, BAE) </li></ul><ul><li>Prototyping and Experimentation Architecture and Construction (Starwood Hotels, Phillips, Crescendo Design) </li></ul><ul><li>3-D Modeling and Data Visualization Data centers (computer industry and other high-tech industries) and control centers (Chevron, Statoil, NOAA, FXPAL) </li></ul><ul><li>Trust Building and Socialization All industries using virtual, distributed teams (IBM, Sun, Cisco, J&J) </li></ul><ul><li>Focus Groups with Innovators Music and entertainment (Sony BMG Music Entertainment, Viacom, Electrolux) </li></ul><ul><li>Branding and Promotion Consumer product companies (P&G, Pepsi, Dell, CIGNA) </li></ul><ul><li>Talent Discovery and Recruiting Consulting industry and hiring agencies (TMP Worldwide Advertising & Communications, Manpower, Kelly Services) </li></ul>Application s Industries and Companies (early adopters)
    6. 6. Many Types of Virtual Worlds Source: http://www.secondtense.com/2009/01/virtual-worlds-game-worlds-and-user.html
    7. 7. Programmer focus (creating a world is complex) Virtual Worlds Platforms Suitable for consumer worlds Suitable for enterprise worlds End-user focus (creating a world is simple) Multiverse OpenSim Teleplace Protosphere Second Life Grid Active Worlds Cobalt/ Croquet Wonderland Key: Blink 3D WebFlock * Vivaty * propreitary Web Alive * open source * browser-based Sirikata Moondus PowerU Nexus Vastpark * Unity3D* Blue Mars CryEngine 2, Unreal Engine 2.5,nd many more enabling new platforms
    8. 8. VW Platforms as Holistic Environments for Learning and Collaborative Work <ul><li>Formal </li></ul><ul><li>Learning </li></ul><ul><li>Instructor-Led Learning </li></ul><ul><li>Self-Directed </li></ul><ul><li>Learning </li></ul>Retirees and alumni serve as coaches and mentors to younger employees, enabling the transfer of experience and tacit knowledge. <ul><li>Podcasts </li></ul><ul><li>Video </li></ul><ul><li>Blogs </li></ul><ul><li>Wikis </li></ul><ul><li>Others </li></ul>Coaching Facilities Social Networking and Informal Learning Virtual Prototyping and Demonstrations Storytelling Role-Playing Simulations Entertainment Area Profile Web Link to
    9. 9. Potential for Engagement & Learning in VWs Issue: When will we have &quot;instructional designers&quot; who can take advantage of VW affordances and design and build learning activities in 3D immersive environments, especially learning experiences that cannot be achieved as easily or cost-effectively, if at all, in the physical world ENGAGEMENT Immersion Interactivity Drama Storytelling Competition Social Context Visualization LEARNING <ul><li>Multiple Perspectives </li></ul><ul><li>Situated Learning </li></ul><ul><li>Transfer </li></ul>UGC UGC: User Generated Content Yes, &quot;proof&quot; of effectiveness of learning/training in VWs is lacking/ insufficient
    10. 10. Work and VWs in an Evolutionary Context of the VW Industry WORK ENTERTAINMENT LEARNING/ TRAINING 2008 <ul><li>Phase 1: </li></ul><ul><li>SL focus </li></ul><ul><li>Sales and Marketing </li></ul><ul><li>Branding </li></ul><ul><li>Phase 2: </li></ul><ul><li>Entertainment </li></ul><ul><li>Pre-teens and teens </li></ul><ul><li>Connecting toys and </li></ul><ul><li>traditional media to VWs </li></ul><ul><li>Phase 3: </li></ul><ul><li>Greater focus on work </li></ul><ul><li>Enterprises recognizing </li></ul><ul><li>value of VWs for work </li></ul><ul><li>Better integration of Web </li></ul><ul><li>and VWs </li></ul>Phase 1 Phase 2 Phase 3 SL: Second Life Media and user interest and attention Interest in non-SL platforms Today’s Reality: Entertainment Represents “Low Hanging Fruit” Post-2000 Evolution: Expected Enterprise Use Actual Enterprise Use 2010
    11. 11. Visionaries versus Pragmatists <ul><li>Visionaries vs. </li></ul><ul><li>Adventurous </li></ul><ul><li>Early buy-in </li></ul><ul><li>Think big </li></ul><ul><li>Go it alone </li></ul><ul><li>Spend big </li></ul><ul><li>First strike capability </li></ul><ul><li>Think Pragmatists are pedestrian </li></ul><ul><li>Pragmatists </li></ul><ul><li>Prudent </li></ul><ul><li>Wait-and-see-attitude </li></ul><ul><li>Manage expectations </li></ul><ul><li>Maintain relationships </li></ul><ul><li>Spend to budget </li></ul><ul><li>Staying power </li></ul><ul><li>Think Visionaries are dangerous </li></ul>Source: Geoffrey Moore, Crossing The Chasm, Strategic Business Insights Pragmatists don’t trust visionaries as references . Chasm
    12. 12. The Continuum of VWs--Towards Browser-Based VWs Browser-Based (no downloads) Browser with Plug-In Light Client Heavy Client Relatively lower degree of Immersiveness (today) High degree of Immersiveness Flash Other plug-ins <ul><li>Holy Grail: </li></ul><ul><li>3D Immersion </li></ul><ul><li>Easy access </li></ul><ul><li>Ease of navigation and use </li></ul><ul><li>Leverage Web tools and technologies </li></ul><ul><li>Benefit from browser advancement </li></ul><ul><li>Enable easy multi-device access </li></ul>
    13. 13. Innovation and VWs Virtual Worlds Innovation Enhancing Human Interaction, Communication and Collaboration <ul><li>A tool for Open Innovation </li></ul><ul><li>Platform for Innovation and Creativity </li></ul><ul><li>Collaborative tool and for learning and knowledge sharing </li></ul><ul><li>Technology </li></ul><ul><li>Applications </li></ul><ul><li>Business models </li></ul>Innovation Innovation Learning & Training Collaborative Work
    14. 14. Framework for Future Scenarios Will Linden Lab have future role to play here and live up to its promise? Will browser-based VWs improve ease-of- use and remove learning curve obstacle? Will apps for VWs help generate more interest In VWs by enterprise? Will consumers shift from browsers to apps on mobile devices and stimulate consumer interest? Access Technology User Category Consumers Enterprises Web Browser Client/App <ul><li>Reasons for using scenario methodology: </li></ul><ul><li>Provides structure for analysis </li></ul><ul><li>Avoids excessive number of possible future states </li></ul><ul><li>Uses key scenario drivers </li></ul>Narrative 1 Narrative 2 Narrative 3 Narrative 4
    15. 15. Adoption of 3D Immersive Environments <ul><li>Gartner forecast in April 2007 (at Gartner Symposium/ITxpo in San Francisco): &quot; 80% of world's active Internet users (and Fortune 500 enterprises) will be in a virtual world by end of 2011 .&quot;* </li></ul><ul><li>* In late 2009 there were 1.7 billion Internet users (including 738 million in Asia) </li></ul>How Close Are We to Gartner's Forecast? 3D Movies 3D Sports on TV … But Immersive Environments and 3D in Entertainment have exploded in recent years… … and will Virtual Worlds and video games soon also come with 3D and navigating via gesture recognition?
    16. 16. <ul><li>Q&A </li></ul>