Presentation given at the workshop on 3D Internet in EU and China in Beijing in March 2009. It covers various examples of 2D & 3D virtual worlds, social networks as well as some interesting legal issues, to conclude with more abstract ideas about the "digital third place"

1. EU-China Information Society Project
Virtual Worlds in Asia
Trends and Expectations
Shaping and Governing the 3-D Internet
Benjamin Joffe, CEO | Plus Eight Star | Beijing, 2009.03

2. Foreword

3. Benjamin Joffe
ベンジャミン
벤자민
本杰明

5. 4 years
1 year
4 years

6. www.plus8star.com

7. Cross-Market Consulting
Telecom & Internet Innovation
China | Japan | South Korea

8. 26 events | 98 speakers | 3,296 members | 1,440 companies

9. I am going to talk about
1. What is a virtual world
2. What are their origins
3. What’s the market situation
4. What are the trends
5. What are the legal challenges
6. More complexities
7. The digital third place
for 60 minutes

10. Chapter 1.
What is a
Virtual World?

11. Before getting started…

12. Questions

13. Who uses Internet (almost) every day?

17. Question 2
Yesterday

18. Virtual World?

19. Problem 1
What does “virtual” mean?

21. 3D Analog World
Without Server Lag?

23. Online / Offline

24. In-
Offline Online
between

25. Digital Immigrants
&
Digital Natives

26. Offline Audience: 300
Online Audience: >30,000
(and counting)
Factor 100!

27. Online + Offline = Life

28. Problem 2
What means “world”?

29. Avatars?

30. Video
[Superbowl Ad]

31. Key elements
(1) Reach
(2) Reputation

32. Definition
Persistent environment
Synchronous communication
Personified users

33. Chapter 2.
Origins of
Virtual Worlds

34. 1981 1984 1992

35. The Matrix (1999) Ghost in the Shell (1989)

36. LambdaMOO (1990)

37. Habitat (Lucasfilm, 1986)

38. Kingdom of the Wind (Nexon, 1996)

39. EverQuest (Sony, 1999)

40. Virtual World Types
Platform
Community
Gaming
Business

41. Chapter 3.
Market Situation

42. “It’s complicated”

45. >150 virtual worlds

46. In 2008, over US$580 million
were invested in 41 virtual goods-
related businesses.
Source: Virtual Worlds Management

47. Is it a business?

48. Revenue Scale
Online games = x 1,000 million
Social networks = x 100 million
Virtual worlds = x 10 million

49. However: Convergence
Online games have revenues
Social networks have loyalty
Virtual worlds have appeal

50. 2D Worlds

51. Europe & North America

56. Daily Users: 495,210
Monthly unique users: 6.6 million across Facebook & MySpace

57. Service Registered users Revenue 2008 (E) Valuation (E)
Habbo 100 mln 50 mln USD 1.25 bln USD
Gaia Online 7 mln UV/month 10 mln USD n.a.
Stardoll 20 mln 30 mln USD 450 mln USD
Club Penguin 12 mln 50-150 mln USD 350-700 mln USD

58. South Korea

60. Japan

63. Service Registered users Revenue 2008 (E) Valuation (E)
Cyworld 22 mln 200 mln USD n.a.
Mobile Game Town 12.6 mln 250 mln USD 1.4 billion USD
Gree 8 mln 60 mln USD 1.2 billion USD
Nicotto Town 100,000 n.a. n.a.

64. China

69. 3D Worlds

70. Europe & North America

73. (60% Made in China)

74. Japan

75. Internet
Adventure Meet-me
(by SEGA)

78. Video
[Mii TV ad - 2007]

79. PS3 “Home”

80. 25 million Xbox 360
consoles getting
software upgrade?

81. South Korea

88. Video
[Nurien Demo]

89. China

94. Chapter 4.
Trends

95. Trend 1
Away from Second Life

96. Gaming
Mainly Second virtual
Life adaptations worlds
2D dating
2005 2006 2007 2008 2009
2D
worlds
Variety of
concepts and
revenue models

97. Trend 2
Browser

98. Browser Hybrid Client
2D
3D

99. Trend 3
Virtual goods

100. Business models
• Virtual real estate
• Virtual currency
• Virtual goods
• E-commerce
• Advertising
• Platform licensing
• Content creation

101. Chapter 5.
Legal Aspects

102. Trademarks

106. Patents

107. Forterra (There.com) vs. IMVU

109. Prior Art

110. Worlds.com vs. NC Soft

111. “System and Method for Enabling
Users to Interact in a Virtual Space”
(7,181,690)

112. Will patents hurt the market?
(“1-click” patent case)

113. Copyrights

114. Who owns what?

115. Facebook’s Terms of Service (TOS)
• “We reserve the right, at our sole discretion, to
change, modify, add, or delete portions of these
Terms of Use at any time without further notice.”
• Chronology of the TOS-gate
– 2009.02.15 | Change in TOS – Facebook can do
whatever it wants with the content
– 2009.02.15 | Users uproar
– 2009.02.17 | Back to old TOS
– 2009.02.26 | Opens its TOS for input from users

116. Terms Of Service (TOS)
vs.
Regulation

118. Copyright? Civil rights? TOS?

120. Second Life Interview Incident

121. USA: Digital Millennium copyright Act
(DMCA)
EU: EU Copyright Directive
(EUCD)

122. Subpoena?
Fair Use?

123. If the effort it takes to file
repeated claims is greater
than the effort to create an
account and repost a video,
then certainly something is
flawed.

124. My expectation would be
that Linden Lab swiftly
research that problem and
close that loophole.
Otherwise it would raise
questions about how ready
Second Life actually is for
professional use.

125. Video
[User-Generated Music Video]

126. Commerce
of Virtual Goods

128. 400,000 Gold Farmers
in China & South Korea?

129. Identity Management

130. “On the Internet, nobody knows
you’re a dog.”
The New Yorker, 1993

131. “On the Internet, nobody knows
you’re a bot.”
Wired, 2005

132. “Glider is a tool that plays your
World of Warcraft character
for you, the way you want it.
It grinds, it loots, it skins, it
heals, it even farms soul
shards... without you.”

133. Single Multiple Use of Shared
account accounts Bots account

134. Shared account
Use of Bots
Whose persona?

135. Online & Offline Identities
Real name
Pen name
Anonymous

136. Identity depends
on the social circle

137. Chapter 6.
More Complexity

138. Regulating virtual worlds is already complicated
for service providers

141. There.com CEO joins the conversation…
as a voice over his avatar

143. Video
[Fix8 Demo]

144. Obama Outfitted With
238 Motion Capture Sensors
For 3-D Record Of Presidency

145. …or not.

150. Lawrence
Howard Clay
Lessig
Rheingold Shirky

152. Chapter 7.
The Digital
Third Place

153. What is a third place?

156. Economic activities

157. Creative activities

158. Cultural products

159. Social environments

160. Digital Third Place

161. Afterword
What Next?

162. Necessary skills
for the future?

163. Business is online
Online identity & reputation
are most important

164. Increase awareness
of the risks
and how to avoid them

165. Celebrate the benefits

166. About +8*

167. There are more ideas
outside your country
than inside
Tom Kelley
CEO, IDEO
The 10 faces of Innovation

168. “Innovation Arbitrage”
• About us
– +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia.
– We provide local expertise & global perspective on mobile and Internet innovation from
China, Japan and South Korea to add value to and accelerate the development of our
clients’ businesses.
• Our services
– Analysis of proven best practices and business models from Asia
– Other services: executive study trips, market entry strategy, M&A advisory, partners
identification, negotiation support.
• Founder & CEO: Benjamin Joffe
– 9 years experience with mobile & Internet in Asia
– Selected among “China’s Top 100 mobile industry influencers” in 2007
– Regular speaker at events on mobile and Internet in Asia
– Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and
Spanish

169. Selected References
• Adidas | E-commerce strategy for China, Japan & Korea
• Bouygues Telecom | Cases studies of leading Asian Web 2.0 services
and virtual worlds
• Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet
convergence strategies
• Hemisphere | Analysis of mobile marketing best practices in Japan and
South Korea (Hemisphere is a leading digital advertising agency),
analysis of leading social platforms (SNS, virtual worlds, online games).
• Microsoft | Analysis of Japan’s key players and market catalysts for
mobile commerce market positioning in China
• DeNA | Case studies of the best practices of leading social networks in
China and South Korea (DeNA operates Mobile Game Town, Japan’s
leading mobile SNS service)
• China Mobile | Benchmark of Korean leading online communities
• Sands Capital Management | Evaluation of China’s investment
opportunities in social networks in China

170. Social Contribution
• Mobile Monday
– Founder of the Mobile Monday forum in Beijing since 2006 (3,000+
members, 23 events, over 80 presentations).
• Media
– Monthly column on Asian innovation for Asian Business Leaders (one of
the leading Chinese business magazines), numerous interviews in
international media.
• Events
– Regular keynote speaker and moderator at Internet, Telecom, Media and
Investment events
e.g. eComm, ITU Asia, Asia Venture Capital Forum, China Mobility International
Summit, O’Reilly’s Graphing Social Patterns, Red Herring Asia, Media 08
Conference, Wireless Developer Forum, Open Web Asia, XMediaLab, Mobile
Monday Global Summit, etc.

171. Contact Us
www.plus8star.com
benjamin@plus8star.com
+81 | Japan
benjamin0123 +82 | Korea
+86 | China
http://twitter.com/plus8star
Telecom & Internet
www.linkedin.com/in/benjaminjoffe
+ Added Value
www.slideshare.net/plus8star * High quality