Virtual Worlds’ Real Money Deals at VW 2008

I’m still in Manhattan recuperating from last week’s Virtual Worlds 2008 conference; here are some news and trends that I’ve observed:

Barbie Rising: Subscription option announced for girls’ virtual world with 2.3 million unique users.

Since launching last spring, Mattel’s Barbie Girls has amassed a jaw-dropping 11.2 million signups; of those, a company publicist told me last week, they’re attracting well over 2 million monthly active users. Up to now an entirely free world, in May they’ll launch a subscription-based “VIP” membership, conferring on their users (86 percent of whom are girls over the age of 8) the right to wear a virtual tiara, among other premium content. I’d bet on huge upgrade rates with this model — and for other companies in the growing virtual worlds-for-kids space to follow suit.

IBM gives the metaverse a corporate firewall.

My pronounced bias for Second Life notwithstanding, this is legitimately big news: Working with Linden Lab, IBM showed off its “enterprise-safe” virtual world portal — that is, Second Life regions that exist on IBM’s servers behind their corporate firewall, but are still connected to the larger (and far more anarchic) world of Second Life. More crucial, IBM will offer this setup to other companies. (As an IBM staffer told me cheerfully, “What the hell do you think we’re doing this for, anyway?”) Numerous companies have resisted development in virtual worlds precisely due to the lack of a firewall, so now that the options exists, big announcements in enterprise-class metaverse development could soon follow. Check back here for more details over the coming months.

Leading metaverse developer throws cold water on virtual worlds applications.

Despite the foregoing, I should report the strong note of skepticism offered in the keynote address of Sibley Verbeck, CEO and founder of The Electric Sheep Co., which has built high-profile virtual world projects for CBS, MTV and many other top clients. I missed the talk, but he summed it up for me afterward.

“[M]ost applications for Virtual Worlds are not ready for prime time,” said Verbeck. “Only a few are, and so if you’re expecting to build a business anytime soon in this industry, you’d better do a full analysis on whether your use of virtual worlds is one of those rare ones that is ready here and now with only a feasible application of resources. One big part of that analysis is one of the underlying technology, and I see that as a limiting factor for most of the applications one might consider as otherwise ‘just around the corner’ for virtual worlds.”

Open world vs. walled garden? Competing development models vie for preeminence.

Overall, the strongest tension at VW 2008 was between companies that want virtual worlds accessible via the Internet but otherwise closed off from the wider Net vs. developers from the “Web 3D” school. In the former category, for the most part, are worlds for kids and/or “branded” worlds that exist solely to market the IP and products of a company and its partners. As Linden Lab’s former CTO Cory Ondrejka notes on his blog, “[W]hat really struck me walking around the show was how constrained the virtual world dream has become…with some marketing material promising a ‘safer’ or more ‘corporate’ environment.” Like Prodigy or AOL in the early 90s, most of the money is still moving in that direction, but at the conference, there was also a strong showing of open-source worlds, too. More on that in my next post from New York.

Image credit: Disclosure: My Second Life blog was an unpaid “media partner” with Virtual Worlds 2008.