Virtual Worlds are for Kids
Industry Analysis Slides 2-8
Competitor Analysis Slides 9-13
Conclusion Slide 14
Exhibits and notes Slides 15-20
Millions of U.S. Children under age 9
have access to the internet
VWs for kids have exploded in the past
Advertisers Dream…great way to market products to children
Disney purchased category leader Club Penguins for over $350 million and
reportedly has 4 million active users
The industry has gone from a few worlds to over 200…Disney is working on 10
worlds itself and is rumored to be spending about $100 million
# of Kids VWs in U.S.
Year 2006 2007 2008
Explosive Growth places Poptropica at
top of the lower age bracket
Kids use VWs much differently than
Often in conjunction with Instant Messenger
Hardly any sex appeal
More individual exploration
Higher value placed on virtual goods
Safety is a bigger concern than cheating
All Competitors want to be Club
-Extremely easy to add friends and chat
Action All-Stars should be called
Owned by NBA amd MLB
Entirely centered around sports
Almost identical to Club Penguin's
intro Action Allstars
Can give friends trading cards 10
Poptropica challenges Dexterity and
-High dexterity needed
-Must be clever
- 3 million unique monthly users Poptropica
There are a Kabillion ways to
-A million different ways to accessorize
avatars and customize home base
Neopets are Cuddly friends in the Real
and Virtual world
-Very cute dragon that could appeal to boys or girls
-Limited ability to customize avatar and no quot;home
basequot; or locker
-Appeals to nurturers
Here are some keys to success for the space:
-Concepts with low saturation
-Special attention to Virtual ownership
Giving avatars the always-on nature of IM mixed with a richer virtual world
environment (Club Cooee)
Dinosaurs (Dinosawrus, Dinosaur Junction Dinokids, Webosaurs, MyDinos)
Multiple revenue streams, OurWorld has 1.3 million registered users makes 50/50
subscription and micro transactions
Hasbro partners with EA for Littlest Pet Shop
SuperSecret's functionality mimics that of MySpace, Facebook, and instant messaging
tools in the same way that a younger sibling parrots the older
SuperSecret is free to play until users hit age 12, and then users will have to subscribe
to continue to level up.
IMVU has long stated that 90% of the company's monthly revenue comes from
microtransaction sales of virtual goods and currency, generated either by direct sales
to users or user-to-user transactions. The other 10% is generated by advertising and
731,000 unique,repeated logins (unique accounts that log in more than once) per
month as of the end of March.That's up from 582,000 a year ago
Microtransaction king Gaia uses speed-boosting Nike shirt and limits # of certain
products to create scarcity and high value
Gaia is an online advertiser's dream. 60% of users are between 16 and 24, with a 55%
to 45% female-to-male ratio. The usual engagement time of a user interacting with a
Gaia branded campaign area is between 15 to 30 minutes
Toys R’ Us debuts in Webkins
Sulake could beat out Genkii's upcoming Sparkle for the title of first 3D virtual world
on the iPhone
Elf Island offers mirrored gaming, where kids complete missions that correspond to
real-world problems, like building a house to raise money for actual houses in
Survey data, In early surveys, players of all ages that had not yet decided to subscribe
were asked what would help them make their decision. Of all the respondents, only
one selected “I can pay for the game in micropayments.” Several others cited time-
related reasons such as “If I have enough time to play” and “I need to play more to
see if I like it.” Interestingly, we found that while players were not specifically asking
for micropayments, an alternative to subscriptions for premium content fulfilled a
number of their wishes.
28M+ Xbox and Playstation Online Accounts 11/09
How virtual worlds and consoles will work is still a big question
Universal Avatars may or may not come into existence
According to a study (Yankelovich 2007), only 25% of US residents trust
conventional advertising. By and large they want to Tivo over advertising. Almost
70%, though, trust what their friends recommend.
Habbo, Gaia, and Stardoll, it’s a market of 100 million people.
Out of the 6.6 billion people on Earth, 2.3 billion have mobile
phones. Approximately 1.2 billion have Internet connectivity.
What could really shake up this segment is the pending launch of Lego Universe.
The applications of this world are obvious and extremely engaging. What’s of
interest here is the element of content creation that could be on offer to the
residents of Lego universe. Very few (possible none) of the under 10’s virtual
worlds allow third tier creation (first tier: avatar, second tier: objects, third tier:
environment). Allowing kids to make buildings etc could be a killer app and
something we haven’t seen much of. Whether or not they engage in this activity
remains to be seen, but I’d suggest it will be extremely popular.
•Toy brands and franchises: Real world toy brand owners creating virtual
playgrounds for their assets. Just as almost every toy has a dedicated
website at present, expect to see a similar trend emerge in the virtual space.
•‘Spaces to play’: Linked to the first point, creating virtual spaces for kids to
play (and learn) will be popular.
•Relationship building: Platforms such as Neopets prove the success of
teaching kids to look after ‘things’. This early type of relationship building
could be a trigger to mass adoption.
•Virtual to real : Revenue opportunities for taking assets created in virtual
worlds and bring them alive in the real.
The segment below shows 10 - 20 year olds - the ‘Battle Zone’. This is a
segment with a great deal of existing competition and as many worlds
pending launch are as live.
NFLRUSH is using Youtube to create awareness, data and demand
Even the rapidly declining Millsberry.com--down 17% from last year, but still at #5--
saw 2.5 million unique users. Webkinz led the pack with 6 million unique users.
Club penguins values each user at over $100