Updated Gartner: 90% of Corporate Virtual World Efforts Fail in 18 Months (Chalk It Up to Experimentation?)

9 out of 10 business experiments in virtual worlds fail within 18 months, reports Gartner today in new findings. That's a pretty dark cloud (and the WSJ is looking at it that way), but Gartner's analysis isn't nearly as dire as its headline. Gartner notes that throughout the process lessons have been learned, many of the attempts were relatively low-cost experiments, and there's still plenty of opportunity. "Businesses have learned some hard lessons,"  Steve Prentice, vice president and fellow at Gartner, said in a statement. "They need to realise that virtual worlds mark the transition from web pages to web places and a successful virtual presence starts with people, not physics. Realistic graphics and physical behaviour count for little unless the presence is valued by and engaging to a large audience."

In fact, if you look at the sessions for the ongoing Gartner Emerging Trends Symposium/ITxpo 2008 in Barcelona, there's plenty of virtual worlds content in there. For example, Monday's session on "Avatars, Robots and Consumers: Fusing the Real and Virtual Worlds" asked "Can you afford not to take virtual worlds seriously?"

It seems like the pretty reasonable point of the numbers is that there's plenty to gain with a virtual worlds work for the enterprise, but it's worth taking the time to do it right. Instead, Gartner says that many of the failed efforts began out of "the 'cool' factor or because competitors are doing it. Many were closed down or abandoned by a lack of clear objectives and a limited understanding of the demographics, attitudes and expectations of virtual-world communities."

Furthermore, Gartner says companies can experiment in virtual worlds for as little as $5,000 with a typical cost of a measly $50,000. That means it's easy to experiment, hone an idea, and close one project before launching a more permanent effort. I'm not sure if Gartner is counting "experimental" efforts in the final numbers, though.

Regardless, Gartner is sticking to its guns on the importance of virtual worlds for business.

"Companies need to start thinking what their virtual world strategy is, incorporate it into their internet strategy and merge their two-dimensional web pages to support a '3D web place.' Virtual world presence is not to replace the '2D world' but to supplement it,"  Prentice said.

One point worth keeping in mind is that Gartner highlights specificity as a key to success. Worlds like BarbieGirls.com and Habbo Hotel target specific demographics instead of just trying to appeal to the whole world or, at least, all of Second Life.

"The challenge that generic projects inside Second Life face is that they do not know who their audience is and therefore do not know what their needs are. Organisations can not effectively market a product for the whole world. They need to be focused and targeted," Prentice added.

Update: A ray of sunshine at the bottom of Gartner's press release balances out the dark cloud headline: "By 2012, Gartner estimates that 70 per cent of organisations will have established their own private virtual worlds and predicts that these internal worlds will have greater success due to lower expectations, clearer objectives and better constraints." 

Comments

[Franck]

Some guys make things happen in Europe !
Check this :
http://lowerfootprint.com/reduce-your-carbon-footprint-using-virtual-worlds/

[Pierre-Olivier Carles]

Oups... Previous comment sent too fast ! :-)

And we'll have too other similar projects to launch before summer. Experimentation of Virtual Worlds for Business Uses is on its way for sure, but real business too ;-)

[nic mitham]

My thoughts:

1. Would love to actually see how many corporate VW projects Gartner assessed when doing this analysis. It's the volume that's more important here than the %. 90% of five projects is a little different than 90% of 50.

2. I'd be amazed if even 10% of the corporate work in VW's has actually been in a timeframe longer than 18 months. 18 Months ago there were less than 20 brands in SL - now there's over 200.

3. How are they defining failure?

Overall, I think this is a misleading headline pushed out to gain attention and little more.

[len]

Possibly this failure rate is not a failure of the technology. It is a failure of the release strategy.

Most experiments should be done in the walled garden far from the public or even the corporate eye until the system is on solid ground. Evolving a strategy for a public world in public is a really bad idea.

We've seen this same kind of failure in many kinds of web projects where the 'get buy in first' strategy was used to justify 'release early release often'.

There is a pace and and art of place to building an act. You won't learn this from the technologists selling you the servers.

[SJ]

With ExitReality 2D pages are instantly converted to 3D virtual places - this makes any business's virtual world strategy easy. Plus there's low barriers to entry - it's free and uses open standards. The basic 3D place can be easily decorated with templates, objects, etc.
The 3D places are already targeting specific demographics because they are based on the 2D site, leveraging the site's keywords and content.
(ExitReality is launching soon)

[nic mitham]

re: ExitReality. Looks like a scaled-down version of Kaneva.