geekycoder 's List: challenge of Virtual World

• The new Sony BMG building has rooms devoted to popular musicians like Justin Timberlake and DMX, allowing fans to mingle, listen to tunes or watch videos. Sony BMG is also toying with renting residences in the complex, as well as selling music downloads that people can listen to throughout the simulated world.
• The spread of these worlds, however, is limited by access to high-speed Internet connections and, in Second Life’s case, software that is challenging to master and only runs on certain models of computers.

• In Second Life, a company like Nissan or its advertising agency could buy an “island” for a one-time fee of $1,250 and a monthly rate of $195 a month. For its new campaign built around its Sentra car, the company then needed to hire some computer programmers to create a gigantic driving course and design digital cars that people “in world” could actually drive, as well as some billboards and other promotional spots throughout the virtual world that would encourage people to visit Nissan Island.
• Virtual world proponents — including a roster of Linden Labs investors that includes Jeffrey P. Bezos, the founder of Amazon.com; Mitchell D. Kapor, the software pioneer; and Pierre Omidyar, the eBay founder

• Media conglomerates in particular think these sites — part online role-playing game and part social scene — can deliver quick growth, help keep movie franchises alive and instill brand loyalty in a generation of new customers.
• By contrast, Disney last month introduced a “Pirates of the Caribbean” world aimed at children 10 and older, and it has worlds on the way for “Cars” and Tinker Bell, among others.
• Operators shrug off worries about fads and competition. “Are features like creating an avatar a long-term advantage for anyone? Probably not,” Mr. Yanover said. “The viability and sustainability of this business comes from the shifting behavior of kids and how they spend their leisure time.”

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• COCA-COLA lovers will have a new place to hang out starting today, and it is an island on the Internet that is shaped like a Coke bottle.
• Coke is introducing its online island within a larger virtual world site called there.com that tries to filter out unsavory content. The company that operates there.com, Makena Technologies, uses software to censor user postings for foul language and employs a team of people to filter out content that might infringe on copyrights or fall outside a PG-13 rating. Makena, of San Mateo, Calif., says that these practices make its site desirable to advertisers.

• At CC Metro, Coca-Cola customers can buy clothing and accessories for their avatars using reward points culled from codes on Coke bottle caps, which can also be used at mycokerewards.com. Customers can dress up their avatars as they move them around the island.

  “It’s really bringing the offline world, where you’re drinking our products, and the online worlds together,” said Carol Kruse, vice president for global interactive marketing at the Coca-Cola Company.

• A number of consumer brands are designing virtual worlds that may resemble Coke’s new island, said Reuben Steiger, the chief executive of Millions of Us, an advertising agency that focuses on virtual worlds.

  “The ones that are going to prosper are going to be the ones that don’t feel like advertising. No one really wants to go hang out in an ad,” Mr. Steiger said.

  Several advertisers have approached there.com about purchasing virtual billboards on the site, but the site has turned them down to avoid irritating its users, said Michael Wilson, chief executive for Makena Technologies.
• n addition to building there.com, Makena Technologies has created seven virtual world sites for MTV Networks, a unit of Viacom. MTV hired a market research firm, MauroNewMedia, to study the behavior of half a million avatar users over six months (using only their avatar names, not their real names) and determined that there was value in collecting the data and using it for targeted marketing

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• However, Linden also makes money from monthly subscriptions and micropayments using its Linden Dollar currency. He's also talking about all the Second Life users who are making money within the world, from creating content, or offering services - the companies making Second Life zones for brands or events, as well as companies using it for business and training purposes.

• First Jess. There's as little as 10% crossover between online games and social spaces (e.g. World of Warcraft vs Second Life), so they're really separate areas - despite the fact that many people who don't use either confuse the two.
• Each type gets frequent content updates. In something like Second Life, that's created by users, whereas for games, it's the game developer making that content. Games are mainly paid for by monthly subscription fees and the price of the original game, while social spaces are more about item sales, and land renting or purchasing.
• copyright/trademarks, taxation, the high cost of developing and running virtual worlds -
• Companies also see virtual worlds as a hotbed for new business models and community engagement, and it's not too expensive to get involved. Apparently Coca-Cola has spent $500,000-1,000,000 in Second Life, which sounds a lot, but is small beans compared with a big TV ad campaign.

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• interoperability mean for virtual worlds? There's several elements, the first of which is universal registered names and avatars, so you can keep the same name and avatar across different virtual worlds.

• 1. HiPiHi (link)

    

  It's pronounced High-Pee-High by the way, and has been tagged as 'the Chinese Second Life', being based in Beijing. "Previously, there's been no virtual world that's really catered for the Chinese market and targeted their language barriers," says presenter Bjorn Lee. "Our vision is to create a virtual world and virtual economy."
• Business model: they're starting with land sales, but looking at advertising models and talking to people about this already. And then eventually want to make money from people selling virtual goods in the world.

• Entropia Universe. This straddles the boundaries between virtual worlds and MMORPGS, and is one of the most well-established and groundbreaking examples, particularly for its work on using micropayments to fund... well, pretty much everything you do in the world. It's also created headlines with some expensive purchases of virtual properties with real-world dollars, while earlier this year, Entropia introduced virtual banks
• 7. Club Penguin. Remember that huge acquisition I mentioned in the intro to this post? Well, that was Club Penguin. Aimed at children aged 6-14, it sees people waddling around as, yes, penguin avatars (which, if you think about it, is pretty safe - no giving away details of your real-world physical appearance). Anyway, Disney snapped it up for $350 million in August this year, with a further $350 million promised if it hits all its profit targets. The House Of Mouse is clearly expecting big things from the world in the near future. Check it out

• Virtual Worlds Management, the leading media company   tracking the virtual worlds industry, has announced findings from a   comprehensive study of accountable transactions that venture capital,   technology and media firms have invested more than $1 billion dollars   in 35 virtual worlds companies in the past 12 months, from October   2006 to October 2007. The announcement comes just prior to the   Virtual   Worlds Conference and Expo taking place October 10-11, 2007, at the   San Jose Convention Center in San Jose, California. The investment   numbers and the future of the industry will be discussed in depth at   the conference.

   

  Of the $1 billion, $196.8 Million was invested in  33 companies. Significant investors in the space include Redpoint Ventures,  Charles River Ventures, Intel, and Rustic Canyon Partners. Media companies are  also making sizable investments, including Disney, CBS, Time Warner, and GE/NBC  Universal's Peacock Equity Fund. The remaining $810 million went to two  acquisitions: Walt Disney's $700 million acquisition of Club Penguin and Intel's  $110 million acquisition of 3D virtual worlds graphics technology company Havok. 

   

  "Investors are not just venture capital firms,  but also include major technology, media and entertainment companies," said  Christopher Sherman, Executive Director of Virtual Worlds Management. "The  amount of money invested in this period of time is staggering. We don't see any  slowing in the market adoption of virtual worlds technologies and expect  investment in the space to continue. In fact the market is growing  significantly, with the rate of adoption of virtual worlds increasing as the  technology matures and has more to offer both consumers and enterprise  customers."

• 9. Is it an online game or a virtual world, or both? One of the most interesting trends highlighted at the conference was the blurring of the boundaries between virtual worlds and online games. Until now, they've usually been treated as two separate areas by those in the know (e.g. World of Warcraft versus Second Life), and confused by those who've never tried either. However, that's changing now, as the crop of teen-focused virtual worlds include casual games as a key ingredient, while set-piece events within Second Life like the current CSI project take on several features of games. Meanwhile, even in pure online games, more players are effectively just hanging out and chatting as much as they're slaughtering monsters.
• Social networking convergence. People are starting to think about how virtual worlds fit / don't fit with the likes of Facebook and MySpace, in terms of users' digital identities, and crossover features.
• social networks could become rivals to virtual worlds for brands' marketing budgets: if you're a record label for example, do you put your money into branded Facebook applications or Second Life?
• Different approaches to graphical realism. You've got Habbo's pixel-tastic isometric look, Second Life's 3D animation, and a bunch of new worlds that graft actual photos onto avatars for an even more realistic look. Three separate approaches, with any amount of mixing and splicing between them too. It's going to be hugely interesting to see which approaches prosper, and wh
• And what about cigarette firms, of whom little was said during the conference? Who sets the moral boundaries for in-world branding, how issues like age-legislation come into play (can you ban under-18 users from visiting an alcohol-themed zone?), and how will governments and advertising watchdogs have an impact?

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• There are already a number of popular virtual worlds such as Second Life, There and Entropia Universe. In addition there are games worlds such as World of Warcraft (WOW).  

   Most of these require a person to download specialist software or buy a game and there are no links between the different universes.

• ore competent visitors to the site can build a world from scratch using the tool's own programming language known as metamarkup.  

   The language is "platform agnostic", according to Mr Koster, which means that it can be used to create worlds which can run on anything from a powerful PC to a mobile handset.

• But unlike 3D games, Second Life isn't about winning. There are no goals or levels. It's a place where you live, yes, a second life. You don't sword-fight or blow things up—unless you want to. You walk around. You chat with people. You go dancing, skiing, scuba diving, or shopping. Second Life has its own economy, based on virtual "Linden dollars," letting you buy and sell virtual goods—from shirts, shoes, and trinkets to cars, houses, and real estate. There's an open market where you can trade real American money for Linden dollars, but as you buy and sell goods "in-world," you can also find ways of generating virtual currency from scratch.

    

  The trick is that, in Second Life, you're free to create your own virtual objects. There's a limited amount of virtual land, but with Linden Labs supplying the modeling tools, you can build almost anything else. And whatever you create, you own—even in the real world. Intellectual property rights belong to the builder. Once you build an object, you can keep it for yourself or sell it to someone else. That means you have free rein to personalize your digital avatar or your own digital home, but you can also open your own digital boutique, selling anything from handbags to hairdos.

• "We're at the beginning of the next evolution of the Internet—the 3D Internet, as we like to call it," says IBM's Michael Rowe, whose official title is senior manager, 3D Internet and Virtual Worlds. "If Web 2.0 is a place where everyone becomes a producer, everyone becomes a content creator, the 3D Internet gives us a whole new level of social interaction in this collaborative space."
• So many companies are entering Second Life because it's the thing to do, because the press gives virtual worlds so much attention. "The biggest benefit of Second Life—for companies—is the media attention," says Heather McConnell, an account executive with the international PR firm Hill & Knowlton, who's become the in-house virtual worlds expert, educating clients on these new age services. "The media is generating so many stories about companies entering Second Life, and that's a real advantage." But this sort of press coverage lasts for only so long. In the end, virtual worlds aren't viable business tools unless they offer something more, and whatever the claims of Cisco, IBM, or Fortune, it's hard to tell if they actually will.

• The reason they shut down seems to be that they had a poor revenue model. They didn’t charge for memberships or run any advertisements, but only sold very cheap virtual items for display on user profiles. Contrast this with what Club Penguin does to raise most of its money (the sale of paid memberships) and the prospect of turning WhuddleWorld around doesn’t seem unreasonable.

• Darren, amazon hosting does NOT save that much when you have users that return which requires massive amounts of data access, unless you are generating reasonable returns per user the cost is equally as prohibitive as most hosting solutions (when you consider data transfer cost, backup, server time).

   

  What amazon does save you is staffing costs for maintaining your own infrastructure. It allows you to scale fast should you achieve any instant success.
• ; unscalable/expensive hosting and underfunding. Both are definitely fixable.

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• In the August issue of Wired, media writer Frank Rose dissects the disastrous failure of corporate advertising in Second Life, as major brands used to measuring audiences in the millions find themselves lucky to count their Second Life audience in the hundreds.
• Wired, meanwhile exposes the real reason why big brands are on Second Life:

  "It had a lot to do with hype," admits [Coca-Cola's worldwide head of interactive marketing] Michael Donnelly.

• “We were quick. We got into Second Life and put up a big building with repurposed Web content. It was a ghost town. Digital tumbleweeds,” said Christian Renaud, head of Cisco’s networked virtual environments
• It turned out people wanted to log on to Second Life to hang out with friends and play casual games, not visit a 3-D version of a corporate Web site.

• The buzz around virtual worlds now is shifting from simply building a virtual headquarters to how companies can help employees work together or with customers more effectively.

   

  Instead of declaring virtual worlds a failed experiment and pulling out, companies are rethinking their approach, much as they did on the Web a decade ago, when sites began evolving from little more than a few pages with brochure-style photos and information.

   

  Some $200 million in investment has flowed to virtual world companies over the past year, and many of the three dozen or so efforts are focusing on corporate uses.

   

  “We know enterprise (corporations) folks are looking at this primarily as a communication medium,” said Chris Sherman, director of the Virtual World Conference that kicked off on Wednesday.

• “The first iteration of virtual worlds saw Second Life as a platform of choice, for experimental purposes. Now in the second iteration we’re seeing new platforms as well,” Sherman said referring to other virtual worlds.

   

  “These are very closed platforms so they can create a virtual world that is not shared,” Sherman said.

   

  The conference schedule reflects the shift, with sessions focusing on what went wrong with initial corporate forays into virtual worlds, what uses make sense for large businesses, and how to manage employee behavior in a digital world.

• Examples of companies focused on the corporate aspect of virtual worlds include Forterra Systems, Millions of Us, The Electric Sheep Co, and Unisfair.

   

  “If you create an island in a virtual world, you have to allocate a representative amount of money to drive people there. If not, there will be cobwebs in your space,” said Brent Arslaner, head of marketing for Unisfair, which sets up virtual rooms for corporate meetings, conferences and training events.

   

  “Cool designers are not going to get you very far.”

   

  The entertainment industry is also adapting, drawing up complex storylines that flit across television, computer and mobile phone screens.

   

  The hit CBS show “CSI: Crime Scene Investigations” plans an episode later this month where a killer is pursued into Second Life. Viewers can continue the chase from within the world, or try a few other games related to the show.

   

  “There’s been a lot of negative press about Second Life lately,” said “CSI” creator Anthony Zuiker. “I think that’s because a lot of companies are cutting big checks into Second Life and there’s no real application in mind.”

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• Cory makes it very clear that Second Life is not “a game”, but much closer to a realization of “the Metaverse” or, perhaps more closely, the “Otherverse” from the Vernor Vinge short novel “True Names”. Rather than solving quests or killing monsters as they do in massively multiplayer online games like World of Warcraft, Second Lifers build homes, businesses, complex avatars, toys and games in a shared, detailed 3-D environment. Then people chat with each other using avatars, explore each other’s buildings and creations and work together to build new parts of the world.
• The world requires 1600 CPUs to model - each 250m x 250m “cell” is served by a single machine. Cory didn’t get too far into technical details, but it sounds like aspects of the world - textures, text files perhaps - are served from Apache web servers, while other aspects - the wireframes and their movement - come from a custom server which talks to the client running on a user’s PC or Mac. The system backends to a MySQL database which keeps track of the properties of all objects, their place in the space, etc. Unlike many multiplayer online games, which have different servers - shards - for different groups of players, Linden Labs has two, one for adults and another for teens. On the adult server, spaces are PG or Mature, and include areas where your character can be “harmed” as well as areas where you’re immune to ill-effects.