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Asians are virtual, what about us
This document discusses the future of virtual worlds and online socialization. It notes that Asia is leading in many aspects of virtual goods markets and online games. The future may see virtual worlds transitioning to focus more on social entertainment and game mechanics. Understanding user behavior from offline social psychology, zoology, and anthropology can provide insights for online behavior. With awareness of risks and a focus on benefits, online socialization could become an important skill and virtual worlds may help address issues with offline socialization by providing additional digital spaces for engagement.
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Asians are virtual, what about us
- 1. Asians are virtualalready How long before we are too? Benjamin Joffe | CEO, Plus Eight Star Ltd. Virtual World Conference| Second Life, 2010.09
- 2. The Challenges • "Whowould pay for things that don't exist?" • "Asians are not like us" • "Online friends are not real"
- 3. “Love Plus” byKonami
- 4. Just Married InGuam (Nov. 2009) Fiancée
- 5. Gartner’s Hype Cycle Are we here?
- 6. Second Life’s SecondLife Past the Trough of Disillusionment
- 7. Why me? • SL:Limited flight hours • Avatar provided • Asia? Not Asian • East time in San Francisco :-)
- 8. However… 4 years 1 year 5 years @benjaminjoffe
- 9. What I do •CEO, Plus Eight Star | www.plus8star.com • Digital Strategy & “Innovation Arbitrage” • Best practices from Asia’s web and mobile world • Partner, Cmune | www.cmune.com • Online gaming company • First 3D FPS on Facebook, MySpace and Apple.com • Founder | Mobile Monday Beijing • Monthly forum for mobile professionals • 36 events, 130 speakers, 3,000 participants • Angel Investor, Advisor, Keynote Speaker
- 11. The future isalready here – it is just unevenly distributed William Gibson Science Fiction Writer
- 12.
- 13. Social Aspects ofTechnology “When a technology becomes boring, that's when the social effects become interesting.” Clay Shirky, Professor, NYU Author, Here Comes Everybody
- 14. Today • Half-way throughthe valley of disillusion • Nothing better than SL since 2003?! • Business issues getting sorted thanks to games
- 15.
- 16. 20+ years ofresearch… Howard Rheingold Habitat (Lucasfilm, 1986)
- 17.
- 18. Plan 1. Learning fromAsia 2. Semantic prisons 3. Learning from offline behavior 4. Some ideas about the future, and our role
- 19.
- 20. Digital Goods Marketfor 2009 Asia $7 bln USA $1 bln Sources: www.plus8star.com (Asia) - Inside Virtual Goods, Oct 2009 (US)
- 21. Virtual Worlds? • Mostvirtual worlds have failed • Online games make millions • Social games too, and grow fast
- 22.
- 23. Answers World’s #3 largest Internetcompany after Google and Amazon #2 youngest self- made billionaire in the world after Mark Zuckerberg of Facebook Pony Ma, CEO, Tencent Yoshikazu Tanaka, CEO, GREE
- 24. Market Caps (May2010) $35.3B $4.2B $2.5B $900M
- 25. QQ IM &QZone
- 26. More on Tencent •Revenue 2009 $1.8B • Net Profit Margin 40% • Revenue from Digital Goods 90% – Digital currency – Multiple payment methods – Purchase, rental, subscriptions…
- 27. 11:30 Shin Takamiya Advertising Gree Home Advertising & Affiliates | 25% Avatars & items B2C virtual Games goods | 75% 60% avatars 40% games
- 30. Mobile App Platformsince Oct.09 (330 apps as of February 2010) City Building Harvest Moon Shopkeeper Furauni By Liveware By Liveware By Geisha Tokyo By Konami
- 31. Online Games inChina • 2009: $3.75B • 105 million game users – SNS games = 87.7% (92 mln) – MMOs = 22.7% (24 mln) – Single-player PC games = 36.1% (38 mln)
- 32. Is Asia’s successunique? Two major shifts 1. Business shift 2. Mindset shift
- 33. Business shift • Packagedsoftware legacy • Online business models – Subscription – Digital goods • Obvious in Facebook and IMVU • Second Life “pivoting”
- 34. Chinese Online GamesCompanies • Listed on NASDAQ • NETEASE NTES $3.93B • SHANDA SNDA $2.65B • SHANDA GAMES GAME $1.56B • PERFECT WORLD PWRD $1.20B • CHANGYOU CYOU $1.49B • GIANT INTERACTIVE GA $1.64B • Listed on HKSE • TENCENT 0700 $30.6B • NET DRAGON 0777 $250M • KINGSOFT 3888 $595M Data as of: 21 June 2010
- 35. Total Market Cap •And the total is… • 8 Gaming Companies $13.3B • TENCENT $30.6B • TOTAL $43.9B • Comparables • ACTIVISION BLIZZARD $14.27B • ELECTRONICS ARTS $5.28B • TAKE TWO INTERACTIVE $853M • UBISOFT $817M • ATARI Delisted from NASDAQ • TOTAL $21.2B Data as of: 21 June 2010
- 36. More Comparables • Korea • NHN (Naver, Hangame) $7.6B • NC SOFT $3.8B • NEXON Private ($6B offer?) • Japan • SEGA SAMMY $4.1B • KONAMI $2.5B • SQUARE ENIX $2.3B • NAMCO BANDAI $2.2B • CAPCOM $1.2B • (NINTENDO $44.2B) Data as of: 21 June 2010
- 37. Virtual Worlds • Strengths – Exploration – Creativity – Online Economy • Weaknesses – No social graph – No fun! • IMVU, Second Life “pivoting”
- 38. (from Web 2.0Conference, 2010.05) • Revenue 2009: $22 million (x2) – Became profitable & cash flow positive • Revenue 2010: $44 million? (x2) • Begin pivot… Virtual World to Social Entertainment – “From Dress Up to Level Up” – Game Mechanics – 2D and 3D Games
- 39.
- 40. Pigg (by CyberAgent) • 1Q2010 Revenue >$7M – 3M+ users (2010.04) – TV ads! • Paying Users – 80% are 20 to 40y.o. – 70% female • Payment – 68% Mobile, 20% Webmoney, 12% Credit Card
- 41. Proven Models Spreading •Asian companies expanding – Bring online & social games overseas – Acquire IP from Japan, US, Europe? • Huge opportunities in emerging markets – “Tencents” of… Russia, Brazil, Vietnam, Indonesia… • Globalization of dev & publishing abilities
- 42. Remaining Barriers inthe West • Semantic prisons • Payment infrastructure – Getting better, but still far off • Industry legacy – Content production & operation
- 43.
- 44. Mindset Shift: SemanticPrisons
- 45. “There are plentyof semantic prisons which do not permit us to think straight” Aldous Huxley, The Human Situation
- 46. Cell 1: Virtual(Goods)
- 47. Virtual??? • Connotations – “Not real” – Valueless – “Who would be stupid enough to pay for that!” • Opposite of Real = Imaginary
- 48. The reality • It’sDigital but it’s Real • Pure symbolic value
- 49. Virtual Goods =Digital FMCG? • “Virtual Goods are Consumer Products” – Cary Rosenzweig, CEO, IMVU Inc. – 7 years at P&G!
- 50. Already buying virtualgoods?
- 51. Field Research: Halloween (San Francisco)
- 52. Field Research: SantaCon (London)
- 53. Analog vs. DigitalExperiences World Cup! Concerts, Travels, Encounters…
- 54. Cell 2: (Video)Games
- 55. Video Games • Connotations – Childish – Waste of time • Adults don’t play games! • Updated terminology – Video = Digital (is this needed?) – Games = Entertainment
- 56. Benefits of games •Great way to learn • Games already sell digital goods – Three quarters of digital goods sold in Asia – Main revenue maker for games on Facebook • Spending to have fun / a better experience
- 57. Field Research: MyAunt (Mountain View)
- 59. Conclusion (Get out of Jail Free Card) • “Virtual” terrible term. Call it “digital”. • “Game” is “entertainment” • “Virtual Goods are Consumer Goods” – Cary Rosenzweig, CEO, IMVU
- 60.
- 61. Let’s look into •Social Psychology • Zoology • Anthropology • Social Dynamics
- 62. Sociology (esp.Social Psychology) Stanley Milgram (1933-1984) “Small world experiment” / 6 degrees (1967) “Behavioral Study of Obedience” (1963)
- 63. Sociology (esp. Social Psychology) Philip Zimbardo (1933~) Stanford Prison Experiment (1971) The Lucifer Effect (2007)
- 64. Learning 1 People’s behavior shaped by their environment
- 65. Zoology Desmond Morris (1928~) “TheNaked Ape” (1967) “The Human Zoo” (1969)
- 66. Learning 2 Behavior guidedby mammal instincts
- 67. Anthropology Robin Dunbar (1947~) (Dunbar Number)
- 68. Learning 3 Socialization (“strongties”) limited by brain structure
- 69. Social Dynamics Erik vonMarkovik “Mystery” (1971~) “Mystery Method”
- 70. Learning 4 Attraction mechanisms existonline just as well
- 71.
- 72. Obama Outfitted With 238Motion Capture Sensors For 3-D Record Of Presidency
- 73.
- 75. Help fix whatis broken in offline socialization • Engagement & Disengagement • Multi-tasking • Social skills & Social dynamics • Virtual worlds as additional physicality: The concept of digital third place
- 76. Toward the digitalthird place
- 77. The hope withgames • Path of least resistance: nothing to explain! • Game = 3D world with rules, fun and targets • Games as excuses for social interactions • Games drive revenues
- 78. Paradise Paintball |World’s First Social FPS! www.cmune.com www.facebook.com/paradisepaintball
- 79. Online Socialization = Necessary skill for the future?
- 80. Business is online = Online identity & reputation
- 81. Increase awareness of therisks to avoid them
- 82.
- 83. Thanks! www.plus8star.com benjamin@plus8star.com +81 | Japan benjamin0123 +82 | Korea +86 | China http://twitter.com/benjaminjoffe Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star