VirtualWorldsNews Feature: Do Avatars Need Virtual Worlds?

People spend over $1.5 billion every year on virtual goods. That's not all going into virtual worlds. In fact, the "world" aspect of the virtual platform might be among the least important right now. Last Friday, Mashable reported that Allen & Company had acquired a minor equity interest in Cartoon Doll Emporium, an avatar creation site.  In June the New York Times reported that Stardoll, a 2D avatar site, had 1.2 million visitors. According to CEO Mattias Miksche, that's low by over 4 million. He sees "a lot of potential" in the virtual world approach, but says the company isn't ready to move there yet.

Companies like Stardoll provide realistic avatars for their users to customize and build into the site's social network. Think MySpace, but with paper dolls. Others like Meez go a step farther and allow users to take their cartoony Meez into their blogs and instant messaging clients. Voki lets its users export their avatars along with voice recordings to social networking sites and certain mobile clients.

None of the avatars are in virtual worlds.

For Sean Ryan, CEO of Meez, that makes perfect sense. "The absolute trend, beyond worlds, is identity. I want something that expresses who I am. It's no different than a ring tone. If you have a hip hop ring tone, it tells everyone around you that you like hip hop. An avatar does that more than a world."

At Oddcast, the home of talking avatar tools Voki and Sidecast, the advance of platforms like Second Life or There.com are helpful mostly for the broader recognition they bring to the avatar experience."

"It'€™s really exciting for us to see the success and the advance of 3D worlds," said Oddcast CEO Adi Sideman. "Until very recently, we'd say 'avatar' and people wouldn't know what we were talking about. But the education that Second Life has afforded the market has been invaluable."

"Tens of Thousands By the Day": Virtual Goods and Avatars

The business model for these companies is similar to teen-oriented, free-to-play virtual worlds like Kaneva. They draw from sponsorships and micro-transactions for premium items.

Stardoll promotes cooperation with celebrities, letting users dress up Brad Pitt or Amy Winehouse in whatever fashion seems suitably hip, but they won't discuss details of the partnerships. Miksche says "it has tremendous value with us to partner with Hillary Duff and Avril Lavigne, but I think they also have come to us because they see that we cover almost six billion uniques in exactly the right demographic."

Instead, the company relies on virtual goods sales. "That's our business model. Period. We sell virtual clothes and accessories by the tens of thousands by the day," said Miksche.

Users can earn star dollars through activity on the site, but they're also sold across 27 different exchange rates €”the US dollar will buy ten star dollars. Star dollars can be bought by credit card, Paypal, SMS, scratch cards, and more.

Meez also looks to sponsorships and advertising. The company simply follows whatever trends the users ask for. "The more and more time people spend online, the more and more their identities will translate to online," said Ryan. Whatever clothing or band or sport that they're involved with off-line, they want to show online. Running something with US Soccer, one of our partners, thousands of our users will get involved. It's really just listening to your consumer and taking what they're interested in off-line and making it available for them online."

That's a process that the simpler technology of 2D worlds often makes easier. Users €”and sponsors want their products to look good. "If you're a fashion designer," said Miksche, " you don't want your dress or skirt to look distorted or pixelated when you spin around. To my knowledge, there's no 3D world that replicates those clothes exactly. In Stardoll, we do 2D photo realistic replications."

The Meez work in 3D, though, and that's what Ryan says gives his company an edge. "Given that we know the trend is towards 3D, it doesn't make sense to not build towards that. The problem with 3D is that when you create your source file, if you can't take it to 3D, it's over. If you can't give it any depth it's over. But users don't get up in the morning and say, 'I want 2D or 3D.' They want something that's more reflective or personality driven, and that tends to be animation instead of flat shots."

Sideman sees the same benefit. Voki adds voice and graphics to text-based social networking communities. "They don't have the ability or need to build a 3D community tomorrow morning," said Sideman.

"I Should Be Punished For Not Having Done That Yet": Moving to Virtual Worlds

However, all that may be changing.

"What we're seeing in the future is the ability of users to take their avatars from virtual worlds and bring them into email and Web pages," said Sideman. "There's no reason folks can't have their avatars on Web pages. It's the same as having an email signature."

Right now Sideman sees the technologies as complementary. "We're mostly on Web pages and these guys are mostly in executables," he said. But Voki has been partnering with 3D communities to cross that gap.

Meez is looking in the same direction. "The best way to look at it is that the 3D Internet is very small and the 2D Internet is very big," said Ryan. "Statistically people just prefer the 2D Internet. We are probably in a transition point to the 3D world. We think Meez is a bridge technology towards that."

The company already lets users take their Meez into 3D games, but it's looking to move further into the 3D world. "For the bulk of last year, we've been trying to make it easier for users to take an animated version of themselves into blogs," Ryan said. "The rest of '07 and '08 is to take them into 3D platforms, some of which will be on our site, some on other sites."

As for transporting Stardolls? "Sure , yeah. I should be punished for not having done that yet," said Miksche. "The IT's pretty simple, and we're working on that."

But the company plans to use it to bring users into Stardoll, not "as a means of exporting [themselves] to other website." The company is already expanding its own platform, allowing users to build multiple rooms for their avatars.

With platforms like Multiverse, Metacrasher, and OpenMetaverse €”just to name a few €”looking to connect virtual worlds and allow users to transport their avatars and items across multiple platforms, Ryan thinks a business focused just on avatars might not be a bad place to start.

"We don't believe most people are going to spend their entire time in a world," he said. "They will spend more time on the Internet, and some of that will be a world, but not all of it."

Joey Seiler
www.VirtualWorldsNews.com
joey (at) showinitiative.com
(512) 535-8650
skype: joey.seiler.vwnews