Subscribe to our monthly report/news updates
and Virtual Reality News Weekly

Filter Post Format:


Competition Thematic for VWs and MMOs

Later this week we’ll be publishing the Q1 2013 Radar Chart. In the meantime, here’s a thematic visual showing the levels of competion (companies) by genre and age for the virtual world and MMO sectors.

The dominance of the Kids and Tweens age group can be clearly observed below, especially in the Casual Gaming, Existing IP and Education/Development sectors.

This thematic looks at the number of operational companies (as opposed to the size of user bases) and marks each genre and age range into High, Medium, Low and Zero competition. The upcoming Radar Chart will be naming the actual companies in the market and indicating their operational phase.

That is all (for now).

KZero Services

KZero Reports

Q1 2013 Radar Chart Coming This Week

Later this week we’ll be released the Q1 2013 Radar chart. The Radar chart shows Virtual Worlds and MMOs by genre and status (live, in-development, closed) and is a great tool to assess sector competitiveness.

In addition, we’ll also be publishing a thematic chart visualising the hot (and not so hot) spots – useful for companies trying to understand the underserved segments.

If you’re currently working on a VW/MMO that’s coming out of stealth mode, or one that didn’t make our Q1 2012 release (which you can order here), please let us know asap!

KZero Services

KZero Reports

 

Universe Chart for Q4 2012 Now Ready to Order

Back by popular demand, we’ve been busy bees over Xmas getting the KZero Universe chart ready. Shown below is an extract from the Universe chart showing virtual worlds and MMOs with an average user age between five and 10.

As per usual, high res versions of the Universe chart presentation can be ordered here, Also included within this report is our forecast for Active Users as at Q4 2012 as well as Market Penetration rates and the Usage Multiplier.

Here’s the chart for the five to 10 year old segment.

Poptropica remains the dominant player in this segment both in terms of their overall user base size as well as forging into new business development efforts such as licensing – a strategy becoming increasingly popular amonst the larger worlds as well as the more aggresive smaller players, such as Fight My Monster.

Founded in the UK, Fight My Monster used (and continues to use) TV advertising very early after launch. The company has also inked several licensing deals which is quite unique considering their relatively small (compared to other UK VWs such as Moshi Monsters and Bin Weevils) user base of circa 2m.

Neo Geo’s Animal Jam continues to expand in line with year one growth, closing Q4 with circa 9m registered users. Another property with ties back to TV is Toonix from Turner. Toonix has pushed through 1m registered accounts in just over a year.

For the full high-res set of Universe charts as well as other data-sets such as Active Users and Market Penetration rates, order here,

The KZero Universe chart is sponsored by Dubit.

Extracts from this report as well as other KZero insight will be presented at the upcoming Digital Kids conference in New York City next month.

KZero Services

KZero Reports

 

 

 

Branded Virtual Goods, Q3 2012 update

Branded Virtual Goods is a category we love at KZero and also one we helped create back in 2007. Here’s the Q3 2012 update of the much-viewed Slideshare presentation containing the virtually definitive A to Z.

KZero Services

KZero Reports

Lessons in Launching Virtual Worlds. Mistake #3: We’re Going With a Monthly Subscription

This is number three in our series explaining common mistakes made by companies launching virtual worlds.

In the first post we discussed the need for market (or rather user acquisition) budget and the target market range was explored in the second post.

Now the focus switches towards the monetization strategy – the pricing method that users will be encouraged to use.

Most virtual worlds targeting the KT&T marketplace opt for a monthly subscription pricing method – charge users a fixed monthly fee and provide them with enhanced/premium features. These premium items take the form of access to special areas, bundles of virtual goods, additional features and the like.

Worryingly, the pricing decision for a lot of virtual worlds and MMOs in the sector isn’t a decision at all. Instead, worlds just opt for a monthly subscription based on the following thinking:

  • If it works for Club Penguin then it will work for us
  • It provides parents with peace of mind – no unexpected charges
  • Having a recurring monthly subscription is less hassle

You get the picture.

And in principle the arguments above are sound. And indeed, virtual worlds such as Moshi Monsters, Jumpstart, Club Penguin and Wizard 101 all have monthly subscriptions. But, these worlds have become ‘brands’ in the space helped a great deal by spending sizable amounts on user acquisition (see mistake number 1).

However, there’s a much bigger picture that many virtual worlds completely miss.

Firstly, switching costs.

What many virtual worlds do not realize is that users who are most likely to be monetized are already being monetized somewhere else, i.e. a competitor virtual world. In this instance, the new virtual world has to shift the user’s attention away from their existing world and move them to their world. It’s important to bear in mind that the propensity for KT&T to have monthly subscriptions in more than one world is virtually zero, due to the issue of switching costs and an unwillingness for parents to be paying for two at the same time.

Another issue is brand awareness and reputation.

When a new virtual world launches, brand awareness and more importantly brand reputation is zero. Nobody knows and nobody cares. Yet worlds think parents will willingly pull out their credit cards and commit to a monthly subscription. If only it was that easy.

A far better pricing strategy is using microtransactions (MTX) at lower price points than a typically monthly subscription (which, surprise surprise is usually $5.95). Allowing users to purchase a virtual currency (which can be used to buy all the elements that a typical monthly subscription offers in smaller chunks) makes the payment decision much easier for parents.

Not only is the paying amount lower (read: cheaper) but also less riskier than a monthly subscription. This neatly side-steps the concern parents have that their child will get bored playing in world X and move onto to another one (whilst still paying for the first).

Implementing lower -priced MTX has an additional benefit of widening the paying user catchment. In other words, for a lot of users, paying $6ish a month is simply not an option. Whereas paying as low as $1 for a ‘taste of the good life’ is much easier to swallow. You just have to look at the app market for evidence of this. By lowering the paying entry threshold you can go after those users that haven’t been monetized by other worlds.

The bottom line is that pushing users over the monetization line is about showing KT&T whats on the other side of the fence. If you have a great VW then users will want to stay as paying users – give them a really low hurdle to jump over, then focus on raising it once they’re over it.

As a closing PS, another point missed by many virtual worlds is that by having a monthly subscription – a take it or leave it fixed price for premium content, you’re actually setting the upper limit of what users can pay. This means that the really engaged paying power users that reside within KT&T worlds can’t get anymore out of their world over and above the monthly subscription level and benefits. This is a poor longer-term strategy.

PPS: KT&T virtual worlds and MMOs with virtual currency based MTX convert three times as many users as subscription-only worlds and have a monthly ARRPU on average 20% higher.

KZero Services

KZero Reports

How Minecraft Gave Virtual Worlds a Second Life

A blog post from New World Notes today announced that Minecraft is now the popular game on XBOX Live. And in fact it’s more popular than Call of Duty. That’s kinda cool.

Minecraft has been an incredible success in a very short period of time by offering users the ability to create. Millions of users (we’ll call them that for now) are spending long periods of time crafting (creating) digital objects. Why? Just because they can. It’s Lego 2.0 with added zest.

The secret sauce is the interaction with these objects, other users and the environment. New digital worlds are being created and entire ecosystems of interaction are taking place.

What has really assisted in the growth of Minecraft is the passionate audience of fans behind it. And, in particular the videos of user creations and activities inside the world. This ‘Machinima’ enjoys multi-million views in really short periods of time. In turn, virality grows off the back of widespread exploitation of social graphs.

It’s interesting to see the different ways that users play / engage with Minecraft. Some re-create real world places – these are known as mirror worlds. Others create race tracks, space stations and even environments from other games such as World of Warcraft. Pop culture is also prevalent. Combining this and the viral element, here’s a video on YouTube that was released four day ago. It’s just about to hit 5m views. Not bad.

Minecraft is enjoying explosive growth and 2012 has seen them move from circa 28m registered accounts right up to 45m. This is the largest proportional increase in the entire sector, including the kids, tween and teen markets. The Universe chart extract below shows the Q1 2012 position (we’ll be releasing Q3 numbers soon).

 

Minecraft has become a global brand in around two years and the great thing is that due to the nature of the platform (user generated content), the community is in total control of its destiny – where it goes from here.

But hang on a minute.

Haven’t we been here before with Second Life?

Millions of users. Media awareness. Content creation. Communities.

All of these elements were (and still are) in Second Life. This has been the case for many years. The funny thing is that Second Life is still a great business. It’s just that the media got bored and moved on. People think that Second Life has closed, just because no-one really writes about it anymore. But the community didn’t get that memo and still enjoy being inside Second Life.

But is was never cool in a way that could be interpreted by a wide age range. Who, in turn could tell their friends. Maybe the avatars looked too real, and at the same time too weird. Maybe it was the brands that swept in and mainly left a bad-taste in users mouths. We were fortunate to create one of the best performing campaigns in Second Life, with our L’Oreal Paris campaign. Or perhaps it was the age limit of having to be at least 17 to register for Second Life. Sure, these was a ‘Teen Grid’ for slightly younger users but that’s not cool. You always wanted to go to your older brothers party.

Minecraft has a user base that spans a wide age range. We estimate the average user age to be 14 but that hides a spread from eight right through to 98. Minecraft is UGC (user generated content) for the masses. So, the users are kids, tweens, teens and adults.  The power-house of user base growth has come from the teenage market, with YouTube boosting K-Factors and brand awareness and other community-led channels such as Facebook have made virtual worlds cool again. In fact, the Minecraft Facebook fan page has just reached 5m fans.

Shown below is a google trends chart comparing Second Life and Minecraft.

Minecraft is the red line and totally over-shadows Second Life in blue, which is remarkable because the media  interest in Second Life was intense in 2007 – 2008. It’s just that Minecraft has become more popular by an order of magnitudes.

The bottom line here is that fundemantally. giving the people the power to create whilst socializing is one of the most compelling features of virtual worlds. It may even be the most important aspect. Second Life provided one of the first platforms for people to do this. But the growth of Second Life was ultimately hampered by some brick walls. The younger audience has propelled usage of UGC and Minecraft and  and in many cases it serves as the ‘graduation destination’ for the millions of kids and tweens that migrate from the highly successful younger virtual worlds such as Moshi Monsters, Club Penguin, Stardoll and others.

This sector is in good hands and promises much. As consumers and businesses, we will continue to use virtual content creation and engage with virtual social networks. Drawing from a previous point and closing this article, the ability to create and share will be the driving force in the future of the sector and virtual worlds like Minecraft give us glimpse into where we are heading. Albeit currently in large pixel format……but that’s cool.

Further information:

And the most popular European country for virtual worlds is……

Here’s some analysis showing what we call ‘The Virtual World Multiplier’. This is a metric that compares the total number of cumulative registered accounts against the total addressable market of virtual world users and potential users. We have data on a per age and per country basis for both these variables.

The Multiplier can be used to assess the relative popularity of virtual worlds between countries and the individual ages of users within them. A high multiplier is created by a combination of factors such as:

  • High proportion of the addressable market already playing in virtual worlds
  • Users having accounts in more than virtual world
  • Users having more than one account in a virtual world

Users creating accounts in more than world can indicate a high awareness of virtual worlds in general and a willingness to explore new ones. Users having more than one account in a virtual world is an indication of retention and repeat visits. These three factors combined produce a score that indicates the relative popularity.

The Multiplier is a tool we use when assisting our clients with territory planning – deciding which markets to focus user acquisition into. It’s particularly useful for assessing emerging markets such as South America and Asia.

The full dataset (30+ countries and individual age-centric datapoints from the ages of 4 to 13) can be requested via .

Here’s a sample chart showing the European multiplier for the combined ages of five to 13. Interestingly (and surprisingly for some), Sweden has the highest Multiplier in Europe – assisted strongly by Stardoll, as well as good take-up from non-Swedish worlds such as Moshi Monsters and Club Penguin.

Perhaps unsurprinsgly the UK comes in at second place. Moshi obviously assists this metric, as do other companies such as Fight My Monsters and Bin Weevils. Multiplier aside, the UK has one of the highest country ARPPU’s in the world as well as well above average paying user converison rates.

KZero Services

KZero Reports

US Kids and Gaming Devices report

Here’s an interesting Slideshare report from Dubit. The presentation relates to US kids and their usage of game devices.

 

View more presentations from Dubit

KZero Services

KZero Reports

6 Jan

Universe Chart Slideshare presentation

KZero Universe Q4 2011

View more presentations from KZero Worldswide

KZero Services

KZero Reports

Quick stat: Top 15 Virtual Worlds

Yesterday we released the Q4 2011 Universe chart along with updated market numbers. Extracted from this analysis, here are the top 15 virtual worlds for under 25’s by total cumulative registered accounts.

KZero Services

KZero Reports

 

Elevate gaming with exclusive casino rewards.

online casino usa real money