The 3D Real/Virtual World Hybrid: How Far Away?

from TechCrunch by Michael Arrington

How long will it be until we can stroll through the streets in a virtual world that is identical to our own? Given the state of a number of technologies, not very long. Over the last couple of years we’ve seen Microsoft Street Side and Virtual Earth as well as similar efforts from Google. But different technologies are now being deployed that are even more interesting that the results achieved from large companies taking and processing massive numbers of photos into now-standard 3D views.

Two standouts are Microsoft’s Photosynth Project and newcomer Everyscape, which Brady Forest wrote about today on O’Reilly Radar.

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GigaOM Top 10 Most Popular MMOs

from GigaOM by Blake Snow

The attention surrounding MMOs (massively multiplayer online worlds) has never been greater. But it’s not just role playing games along for the ride; non-game, avatar-driven virtual communities are just as popular, if not by more, and we’re not just talking Second Life here.

So in an effort to cut through the hype and glean some context, here are the most popular MMOs in terms of active users or subscribers, based on publicly available data. These titles may or may not be games, but the medium has expanded far beyond Tolkienesque fantasy worlds. They all are Mac-friendly/Web-based with exception of Guild Wars.

1. World of Warcraft, released 2004 - 8.5 million subscribers. While Habbo is giving Blizzard a run, the numbers generally support WoW as the biggest MMO in the world. Important qualification, though: only 4 million are based in the West and monthly subscribers, while its 4 million Chinese players only pay roughly 4 cents an hour to play it in Internet cafes.

2. Habbo Hotel, released 2000 - 7.5 million active users. The Finland-based “social game” MMO popular with teens and growing fast. Look out, Horde!

3. RuneScape, released 2001 - 5 million active users. A Java-based MMORPG operated by Jagex Ltd. with over nine million active free accounts. Boasts one million paying customers. Fancy that.

4. Club Penguin, released 2006 - 4 million active users. MMO for the kiddies developed by New Horizon Interactive. The game shares similarities with other social environments like Habbo Hotel.

5. Webkinz, released 2005 - 3.8 million active users. Here’s a novel idea: create beanie baby like stuffed animals, assign them a unique ID, then create an MMO portal in which kids can spend even more time using your product. When kids graduate from Club Penguin, they go to Webkinz (or so I’m told.)

6. Gaia Online, released 2003 - 2 million active users. Not quite an MMO, not quite a social site, but founder Derek Liu has openly stated the networks desire to focus on social gaming. Forums make up 30% of the current site activity.

7. Guild Wars, released 2005 - 2 million active users. Another MMORPG made by the popular NCsoft out of South Korea. No Mac love here, but a lot of active users.

8. Puzzle Pirates, released 2003 - 1.5 million active users. Published by Ubisoft and developed by indy king Three Rings, Puzzle Pirates merges casual games with a rising interest in pirate culture. Puffy shirt aside, it’s working like a charm.

9. Lineage I/II, released 1998 - 1 million subscribers. Published by South Koreas NCsoft, Lineage was once the most popular MMO of its day. At one point total active users peaked at 3 million. A Western release in 2002 mostly fizzled.

10. Second Life, released 2003 - 500,000 active users. No introduction needed here. Created by Linden Labs, this virtual world features a rabid fan base, inflated numbers, a high influx of corporate doppelgangers, and lots of digital genitals. First life optional.

Other popular MMOs are sure to exist, particularly new-comers and non-localized Asian games that are sure to grow. Also, this list reflects popularity alone, not necessarily revenue models, though World of Warcraft is performing well on both counts.

For all intents and purposes, the most popular MMOs represent an estimated 50-75% of the total MMO market (30-60 million active users.) Is that enough attention to justify MMO’s recent surge of attention? Maybe not all of the hype, but definitely a large portion of it. And who wouldn’t want a piece of Blizzard’s reoccurring pie or another revenue model with a similar install base?

Interestingly, however, it’s apparent that no single business model is winning out. Subscriptions work well for MMORPG games like WoW that are more akin to crack cocaine than mere entertainment. But what about other non-game MMOs? How will companies bank on consumer attention in those areas? One thing’s for certain: with all the popularity surrounding MMOs several new business models are sure to flourish in the coming years, as it’s not just about games anymore.

*Of Western origin or with a localized presence here. “Active users” based on most recent monthly log-in figures when available. Subscriber numbers are not necessarily a reflection of active users. Figures compiled from Wikipedia (excluding, to the best of my knowledge, free trials, beta users, and web visitors without accounts.) Virtual Worlds News also referenced; Habbo figures taken from company spokeswoman, Second Life figures from most recent published stats. Special attention was given to notable MMOs in terms of where they stack up when looking at the numbers in addition to their popularity and/or high profile (i.e. Second Life.) Amendments and additions welcome.

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Inside the YouTube of Games

from GigaOM by Blake Snow

Casual Flash games generate monthly pageviews in the hundreds of millions, but the game industry has been painfully slow to capitalize on this massive audience—the chief exception being Pogo.com, which Electronic Arts acquired for about $50 million in 2001. Today some 1.4 million “Club Pogo” subscribers pay $40/year - another nice $50 million in annual business.

Jim Greer, former Technical Director Pogo, like EV thinks that there is a big business to be made out of casual games, and raised a million dollars for his new start-up, Kongregate, which aims to be the YouTube of games, offering free, ad-supported Flash games and an online community to increase the site’s stickiness. After the break, Greer talks revenue model and numbers.

What’s so YouTube about Kongregate

‘YouTube for games’ is really just the attention-getter for people who don’t know that much about the space. What we really are is a community for web gamers and developers. Current web game sites don’t do community right, if at all. If I beat a game on Miniclip or AddictingGames, I don’t take anything with me and can’t even see the other people who are playing it as well.

Kongregate by the numbers

Page views for March were 2.4 million. That’s up from 400K in February. Registered users are in the low five figures - until recently the only incentive to register was to socialize. Now that we have persistent rewards for playing games, we’re seeing much better registration rates. Right now we have 483 games, and they’re coming in at a rate of 40-50 per week. Those are from 224 developers.

Leveraging Ad Revenue

The participation rate for YouTube is somewhere around 2%. That means 98% of the users came there to view videos, not upload them. If our participation rate is around .05%, it doesn’t really kill us. Good games are something you play for hours. A good viral video you watch for two minutes. So we can have a lot fewer games and have plenty of entertainment value…

(To encourage user-generated content), most other sites pay developers a small one-time license fee. They make a lot of money and they don’t share it. We think we can inspire love from our developers, both because they like our community, and because we treat them well… By default, all developers receive 25% of the ad revenue generated from their games… [But] it’s possible for a game to earn 25%, 35%, 40%, or 50% of ad revenue (depending on performance).

Unlike YouTube, users can’t share games on other sites and blogs (yet), but this is something Greer believes is “less of a blockbuster strategy than it was for video.”

All this sounds promising, but unlike other proven online communities, making a enjoyable Flash game takes a lot more time and talent than, say, uploading a funny video, and that barrier limits Kongregate’s content stream. So what’s it going to take for Kongregate to become the number one online game destination? “Much better virality than we have right now,” says Greer. “I’m very happy with where we’ve come in the six months since we founded the company. I think we can do a lot in the next six to twelve.”

You can follow Kongregate’s saga on Greer’s blog.

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Virtual World Population: 50 million by 2011

from GigaOM by Wagner James Au

When technology analyst group Gartner recently asserted that “80 percent of active Internet users (and Fortune 500 companies) will have a ‘second life’, but not necessarily in Second Life” by 2011, a lot of people jumped the gun and assumed 8 out of 10 of all Net users would be in a virtual world in four short years. Not exactly, Gartner Chief of Research Steve Prentice tells us. “Firstly,” says Prentice, “this statement refers to ‘active’ Internet users– a subtlety missed in much of the subsequent reporting.”

Their actual estimate, as it turns out, is decidedly less expansive, but about as impressive, and that’s by conscious choice. The statement was meant, says Prentice, as “a wake-up call to the CIO and CEOS out there that this is not a game, just sort of messing around. It’s interesting [and] we think it’s going to big.” By “active”, Gartner is referring to “people who are heavyweight Net users.” And by their definition, all of them are broadband users. “They’re my kids, to be honest, back from school, right onto MySpace.” That in mind, the estimate is actually that 50-60 million Net users will participate in a virtual world by 2011. “Doesn’t seem totally outrageous to me,” says Prentice.

Considering the largest existing worlds, including South Korea’s Cyworld, and its 20 million uniques, World of Warcraft with its 8 million subscribers, and Europe’s Habbo Hotel with its own 7 million regular users, that guess is actually on the conservative side. (While researching another story, Lisa Cosmas Hanson of Chinese game market analyst Niko Partners told me she estimates 26 million online world users by 2011 in China alone.)

To arrive at that figure, Prentice considered numerous variables, chief among them these five:

• Upward growth rates of existing worlds and social networks like MySpace.
• Usage patterns of current online world users (“Especially in the teen and young adult area…”)
• General computer game usage (Gartner cites a recent Entertainment Software Association report indicating that 69% of US head of households already play computer games.)
• Penetration and growth of Internet-enabled notebooks in this generation and spread of easily accessible wireless Internet.
• Involvement by major firms like IBM in virtual worlds, coupled to metaverse consulting groups to serve them there. (“[T]his reflects both a growing interest from their client base, and will result in growing pressures (and competencies) to accelerate the move by corporate users into the virtual worlds space.”)

Surprising to me at least, Prentice believes most virtual worlds of 2011 will not be console-based, and that they’ll primarily remain a PC-centric platform. But he thinks it’s possible we’ll see metaverses accessible through phones and PDAs by then. (”Never say never: people said they’d never watch movies on a phone, and they do.”)

Another surprise is that Prentice thinks none of the existing virtual worlds will dominate four years from now– hence the “‘second life’, but not necessarily in Second Life” qualification. At this point, he says, “Linden is [like] the AOL of the early Internet. The biggest ones don’t even exist yet.”

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