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Virtual Worlds Oct 2007


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Virtual Worlds Oct 2007

  1. 1. Virtual Worlds Games and Social Spaces Presented By: Jessica Mulligan October 24, 2007
  2. 2. Agenda <ul><li>Definitions </li></ul><ul><li>Contrast and Comparison </li></ul><ul><li>Markets </li></ul><ul><li>Summary </li></ul><ul><li>Q&A Session </li></ul>
  3. 3. Who Am I? <ul><li>21 Years in Online Games </li></ul><ul><li>Co-Author: Developing Online Games: An Insider’s Guide (ISBN-13: 978-1592730001) </li></ul><ul><li>Author: “Biting the Hand” Column 1997-2003 </li></ul><ul><li>Currently consulting in Europe </li></ul>
  4. 4. Definitions <ul><li>Virtual World: </li></ul><ul><li>Any connected computer space that simulates certain characteristics of reality </li></ul>
  5. 5. Definitions <ul><li>VW Characteristics </li></ul><ul><ul><li>Avatar </li></ul></ul><ul><ul><li>Persistence of World </li></ul></ul><ul><ul><ul><li>Terrain </li></ul></ul></ul><ul><ul><ul><li>NPCs </li></ul></ul></ul><ul><ul><ul><li>Rules </li></ul></ul></ul><ul><ul><li>Persistence of Growth </li></ul></ul><ul><ul><ul><li>Avatar Stats </li></ul></ul></ul><ul><ul><ul><li>Possessions </li></ul></ul></ul>
  6. 6. Definitions <ul><li>Examples </li></ul><ul><ul><li>Massively-Multiplayer Games </li></ul></ul><ul><ul><li>Social Spaces </li></ul></ul><ul><ul><li>Research Worlds </li></ul></ul>
  7. 7. Definitions <ul><li>Technology </li></ul><ul><li>Client/Server </li></ul><ul><ul><li>Buy/Download GUI </li></ul></ul><ul><ul><li>WoW, Second Life, There </li></ul></ul><ul><li>Browser-Based </li></ul><ul><ul><li>Access Directly on Web </li></ul></ul><ul><ul><li>Runescape, Habbo Hotel </li></ul></ul>
  8. 8. Definitions <ul><li>Two Separate Markets </li></ul><ul><li>Little crossover between Games and Social Spaces </li></ul><ul><li>VW Games 10x more revenue than VW Social Spaces </li></ul>
  9. 9. Definitions <ul><li>Examples </li></ul><ul><ul><li>Virtual World Games </li></ul></ul><ul><ul><ul><li>World of Warcraft </li></ul></ul></ul><ul><ul><ul><li>Ultima Online </li></ul></ul></ul><ul><ul><ul><li>Runescape </li></ul></ul></ul>
  10. 10. Game Virtual Worlds World of Warcraft Runescape Ultima Online
  11. 11. Definitions <ul><li>Examples </li></ul><ul><ul><li>Virtual Social Spaces </li></ul></ul><ul><ul><ul><li>Habbo Hotel </li></ul></ul></ul><ul><ul><ul><li>Webkinz </li></ul></ul></ul><ul><ul><ul><li>Club Penguin </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul><ul><ul><ul><li>Second Life </li></ul></ul></ul>
  12. 12. Social Spaces Second Life Habbo Hotel
  13. 13. Social Spaces Club Penguin
  14. 14. Contrast & Comparison * Kid spaces are both games and social spaces 3D/1st-3 rd Person or Iso-Linear No or Few Game Rules* Player-Generated Activity Show Off My Stuff Be with Friends Mini-Games Frequent Content Updates Supportive Web Content Main Revenue: Items Sales <ul><li>3D/1st-3 rd Person or Iso-Linear </li></ul><ul><li>Primarily a Game </li></ul><ul><ul><li>Achievement </li></ul></ul><ul><ul><li>Exploration </li></ul></ul><ul><ul><li>Consistent Rules </li></ul></ul><ul><ul><li>The Team/Friends </li></ul></ul><ul><li>Frequent Content Updates </li></ul><ul><li>Supportive Web Content </li></ul><ul><li>Main Revenue: Monthly Fees </li></ul>Social Space Game
  15. 15. Contrast & Comparison Free Download SKU Free-to-Play/Upgrade to Premium Virtual Land & Item Sales Merchandising (Webkinz) Retail SKU Monthly Fee Free-to-Play/Upgrade to Premium Virtual Item Sales Business Models Social Space Game
  16. 16. 2007 Free Download SKU Free-to-Play/Upgrade to Premium Virtual Land Sales Virtual Item Sales 10% of Market Exp: Runescape, Iron Realms Retail SKU Monthly Fee 90% of Market Exp: WoW, EverQuest II Business Models Boutique/Web Game Premium Game
  17. 17. The Transition: 2012 Free Download Free-to-Play/Upgrade to Premium Virtual Land & Item Sales 40% of Market Retail SKU Monthly Fee 60% of Market Business Models Boutique/Web Game Premium MMOs
  18. 18. Markets <ul><li>Virtual World Games </li></ul><ul><li>Active Players: ~60 Million* </li></ul><ul><li>Revenue: $4.5 billion USD** </li></ul><ul><ul><li>WoW: 8 million </li></ul></ul><ul><ul><li>Fantasy Westward Journey/China: 6 million </li></ul></ul><ul><ul><li>Runescape: 6 million </li></ul></ul><ul><ul><li>Perfect World: 4 million </li></ul></ul>*Estimate of active accounts ** ”Online Game Market Forecasts 2007” by DFC Intelligence, May 2007
  19. 19. Markets <ul><li>Social Spaces </li></ul><ul><li>Revenue: $400 Million USD </li></ul><ul><li>Active Users*: ~30 Million </li></ul><ul><ul><li>Habbo Hotel: 7.5 million active </li></ul></ul><ul><ul><li>Webkinz: 4 million </li></ul></ul><ul><ul><li>Club Penguin: 700k subs, 12 Million Active </li></ul></ul><ul><ul><li>Second Life: ~400,000** </li></ul></ul>*Estimate of active accounts worldwide. ** Guesstimate of SL accounts that are actually active, not just registered
  20. 20. Markets <ul><li>Trends </li></ul><ul><li>Games </li></ul><ul><li>Asia Continues w/50% of Revenue </li></ul><ul><li>Europe & Japan Growth Areas </li></ul><ul><li>Web/Boutique VW Games Picking Up Steam </li></ul><ul><li>Free-to-Play/Items Sales </li></ul><ul><li>Social Spaces </li></ul><ul><li>Web Spaces Growing </li></ul><ul><li>Client/Server Stagnant </li></ul><ul><li>Kid Spaces Continue Growth </li></ul>
  21. 21. Markets <ul><li>Trends </li></ul><ul><li>The Take-Away: </li></ul><ul><li>Access through Browser </li></ul><ul><li>Free Access/Item Sales </li></ul>
  22. 22. Summary <ul><li>Virtual Worlds: Games and/or Social Spaces </li></ul><ul><li>Games make most of the revenue </li></ul><ul><li>60m users now, 150m in 5 years </li></ul>
  23. 23. Summary <ul><li>Web-based Social Spaces on the rise </li></ul><ul><li>Games Market splitting: </li></ul><ul><ul><li>Premium MMOs </li></ul></ul><ul><ul><li>Boutique titles </li></ul></ul><ul><ul><li>Free-to-Play/Item Sales </li></ul></ul><ul><li>Large Niches </li></ul><ul><li>Kids spaces </li></ul>
  24. 24. Summary <ul><li>Issues Include: </li></ul><ul><ul><li>Copyright/Trademark </li></ul></ul><ul><ul><li>High Costs To Develop and Run </li></ul></ul><ul><ul><li>Increasingly Crowded Market </li></ul></ul><ul><ul><li>Differentiation </li></ul></ul>
  25. 25. Q&A <ul><li>Thanks for listening! </li></ul>