The Evolution of Virtual Worlds, Part Four. Branded Virtual Reality

This is the fourth article in our series exploring the evolution of virtual worlds. The first post laid out the foundations of popular virtual worlds moving from 2.5D into 3D environments, what we call VW1.0 and 2.0. Part two explores a key growth area for the virtual worlds sector away from the gaming genre – Social Virtual Reality. Our previous post (part three) explained the power and popularity of ‘building stuff’ in virtual worlds, a concept called User Generated Spaces.

In this post, we move away from sandbox environments and socialising and focus on how companies will leverage virtual worlds to create Branded Virtual Reality experiences.

Brands in Second Life

The idea of brands using virtual worlds is not a new one. From an older demographic perspective many brands have dipped their toes into virtual worlds. This activity was activated primarily by the popularity of Second Life from 2007 – 2009 with over 100 brands launching campaigns. In many cases brands created islands in Second Life and in the vast majority of cases these destinations struggled to generate visitors. Why? Because the residents of Second Life tended to hang-out on the main islands and didn’t want to teleport away from ‘the masses’ and check-out an empty branded island.

We adopted a different approach with our campaign for L’Oreal Paris in Second Life. Instead of creating an island and dragging users from the mainland to an island, instead we partnered with existing retailers of virtual goods with shops on the mainland and asked them to stock the products we created.

These products were virtual goods in the form of ‘skins’ based on real-world cosmetics. We also utlised a popular location in Second Life called the Greenies Kitchen – a supersized room allowing visitors to explore a massively scaled kitchen. Inside the kitchen we placed an enlarged handbag containing photorealistic replicas of L’Oreal products. The virtual ‘skins’ were also distributed when users clicked on the products.

The key point to make here is that brands have to create experiences in virtual worlds that the users actually want to engage with. And, if a brand can provide a virtual world user with a product (i.e. a virtual good) that enhances their experience then all the better. The idea that ‘if you build it they will come’ is not necessarily true.

Existing Branded Virtual Worlds

Shifting to a younger demographic, the kids and tween sectors have adopted virtual worlds in their millions. As shown in the graphic below from the KZero Universe Chart, VWs such as Moshi Monsters, Monkey Quest, Moviestar Planet and Poptropica command significant online audiences.

This is turn has facilitated offline revenue streams in the form of merchandising, movies and other forms of branded entertainment.

The way that branded virtual worlds resonate with this age range presents a interesting opportunity to brand owners when the virtual reality market penetrates this demographic.

Branded Virtual Reality

From an experience perspective, the current state of the virtual reality market is being driven by independent developers, enthusiasts and in a small number of cases, larger studios creating games in liaison with headset manufacturers.

Brands haven’t completely ignored the emerging popularity of virtual reality though. As this presentation shows, some companies and IP’s have already dabbled with VR demos. Expect to see more of these types of applications used for expos, product launches and the like.

But once the number of headset owners starts to ramp-up (from early 2015 onwards) with products such as the Oculus Rift (CV1), Sony Project Morpheus and others coming to market, this will be the catalyst for brands to enter the VR space. Here are some examples of how this will happen….

Gaming Brand Extension

For some brands, virtual reality fits very nicely into their existing brand values. A great example is Red Bull. Red Bull works hard to extend their brand into categories and experiences outside of their actual product, with Red Bull Racing being a perfect example.

This company already ‘has previous’ in the virtual space with a gaming experience inside Playstation Home and it’s easy to envisage this type of VR application being created. But this isn’t just a gaming opportunity for Red Bull – imagine experiencing a real-life real-time Red Bull race streamed from a stereoscopic 3D camera (from a company such as Jaunt ).

Music, Movies and TV

Wider product opportunities are also presented to brands over and above VR gaming. Take the music category for example. Music is already a powerful experience in virtual worlds and becomes even more compelling with virtual reality. Branded VR experiences from musicians and bands would allow fans to get even closer to their favourite artists with concepts such as virtual concerts. So, record labels should examine VR as closely as they currently user social media channels.

Movies and TV is another branded virtual reality opportunity. Re-creating sets and places from iconic movie-sets and TV shows has already proven to be popular in VR. Unofficial (i.e. not endorsed or created by the IP owner) examples of this concept include Jerry’s Place, the bridge from the Starship Enterprise , the ‘Trench Run‘ from Star Wars and the Bat Cave. On an official basis, a Game of Thrones VR experience was also created recently.

Proving this genre is coming our way, recent reports indicate movie companies are already exploring the use of virtual reality in movies. Maybe soon you will be able to be Iron Man.

Character-Driven VR

Younger users of VR headsets (expected to be a part of the market from mid 2015 onwards) are a valuable piece of the future marketplace. Just as we’ve seen branded virtual worlds already prove popular and more recent developments linking on and off line product (Skylanders and Disney Infinity), we should expect VR environments driven by stories and characters.

These types of experiences will allow the players to be part of a narrative-led VR world, immersed alongside their favourite characters and stories. This could be part exploratory, allowing the players to roam around their favourite worlds as well as have RPG-elements enabling them to quest and play as these characters.

In Summary

Being placed inside a virtual reality environment on your own is compelling but when you’re sharing this ‘virtual space’ with others it becomes a completely different experience.

As the virtual reality market gathers pace, the essence and attributes associated with virtual worlds will be a key driver for adoption and this take-up will take place in several different areas.

Social Virtual Reality – interacting with your friends in a social setting is an area Facebook will be looking to exploit. User Generated Spaces – being able to build your own worlds and explore them with friends is another sweetspot. And not to left behind, as we’ve indicated in this article, Brands and IP owners will also want to leverage the presence of virtual reality. Exciting times!

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