Why Virtual Worlds Are Overtaking the Game Industry

The bar for online gaming has been raised, with community becoming as important as gameplay. Virtual worlds and Web 2.0 habits are driving users to worlds that support socializing instead of questing and user-created content instead of magic. World of Warcraft may have nine million subscribers, but Habbo Hotel has 7.5 million users per month, and it's growing. BarbieGirls.com grew at over 40,000 new members per day to reach four million registered users after only three months of its public beta. Gartner Research predicts that 80 percent of the online population will be involved in non-gaming virtual worlds by 2011.

"The game industry may have created the idea of online entertainment, but the days of orcs and elves ruling the online space is drawing to a close," said Christopher Sherman, Executive director of the upcoming Virtual Worlds Fall Conference and Expo taking place October 10-11 at the San Jose Convention Center. The show is attracting big wigs from across the entertainment industry.

"There will always be a place for platforms that just want to allow users to play a game together, but now interaction is key. Community is key," said Sherman who jumped from the game industry to the virtual worlds industry late last year. "The content revolves around and facilitates the community. Treating the online environment like less of a game and more of community or virtual world is key. Major media companies are now looking at anything they do as online entertainment - with a virtual world tied to it."

Case in point: Raph Koster, the former Chief Creative Officer of Sony Online Entertainment, recently took the wraps off of his stealth startup Areae with the announcement of Metaplace. Metaplace is designed to provide an easy-to-use interface allowing users to create virtual worlds that can run anywhere and do anything.

Said Sherman of the announcement, "Whether or not Metaplace is successful, the wake-up call for the game industry has been issued."

Virtual worlds like Kaneva strive to provide activities for their users, including games. Developers like Trilogy Studios, who created a Virtual MTV environment, have a background in next-generation console games like Medal of Honor and The Chronicles of Riddick. It shows in their products. MTV's Virtual Pimp My Ride lets users build experience points while socializing.

"The dirty little secret in the casual MMO and virtual world space is that there's not a lot to do," said Trilogy CEO Michael Pole.

Virtual world developers understand the usefulness in looking back to games for inspiration. Now it's time for game developers to look forward.

While some companies, like BioWare, build communities around their games to keep players engaged around the clock, others leave players to their own devices.

"How many games have a strong community?" asks Kaneva CEO Christopher Klaus. "If you go to a lot of the game sites themselves, the website for the games, almost all of them are microsites. In most cases, what's happened is that the community has created their own websites around the game. That's fine, but ultimately I think that it would be stronger if the game producer thought about, 'Why not build that overall community into the game site itself?'"

Even massively multiplayer games like World of Warcraft and Lord of the Rings: Online haven't kept up with the social needs of their community. Instead, a virtual cottage industry of MMOG-themed social networks has sprung up to fill the void, with one, Curse.com, seeing 3.5 million unique visitors per month. That's great for Curse, but less than ideal for Blizzard. Kaneva is solving that problem by creating Web interfaces for when players can't sign on to the virtual world.

"What we're trying to do is create a place for [users] to hang out when not playing," said Klaus. "That's an opportunity game companies can learn from."

Virtual worlds offer a chance for the major game developers to find new ways to interact with their audiences, but they also offer new developers ways to find an audience in the first place.

"There's no longer a barrier to entry," said Pole. "In traditional gaming, you're predisposed to working with one of the major publishing companies to get your work out there for the public to see. The cost to develop is hugely expensive. This new medium puts back the creative control in the creators' hands. The economic models have dramatically changed to favor teams working in the space. We're in a position to redefine an entire genre of games."

But that doesn't mean that there's no money out there for developers. MTV announced in July that it would invest $100 million into casual MMOs and virtual worlds. Time Warner Investments considers virtual worlds one of its four major channels for new media investment. Warner Bros. Entertainment is preparing its T-Works platform for launch in the spring of 2008.

Whether you're a startup or a long-standing studio, it might be worthwhile to start looking at virtual worlds.

Comments

[Tele3DWorld]

It about time the gaming industry woke up to this opportunity.

[Tele3DWorld]

It about time the gaming industry woke up to this opportunity.

[Chrischun Fassbinder]

Very good to see this inevitable progression reaching the point where it's turning the heads of big time game developers.