Growth areas in 2009 for virtual worlds: 5 to 15
Following the Virtual Worlds London Expo earlier this week, as promised I’m going into greater detail in terms of offering my thoughts on growth areas. This post covers virtual worlds with average age ranges between 5 and 15 years old. The actual presentation delivered can be seen here. Also, the K Zero Universe charts how have a permanent home, here.
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Learning 2.0 / P2P
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The majority of effort to date in this space in terms of proposition has focussed on casual gaming, socialising and play. Whilst this is all well and good, from a parental perspective this raises the issue of ‘value’ – what is my child actually gaining from interacting with this virtual world? This issue is becomes further compounded when considering the propensity for users to be converted into premium accounts.
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An area which is currently under-served and in my opinion ripe for growth are educational virtual world platforms. For example, curriculum-based initiatives could work very well. In this context, environments could be created to allow children to explore history-based topics – ancient cities, historical buildings and events – a really engaging idea. This flows over to geography as well – sure, real-world field trips are great and will always be the best way to ‘show’ but a virtual world alternative has obvious benefits. Problem-solving and team work are two other outputs from this concept.
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This approach may also prompt support and even funding/investment from governments and authorities. ITC is a key focus for all national educational bodies so an evolution into virtual worlds makes plenty of sense.
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Another aspect of education is peer-to-peer – kids teaching kids. The argument here is that children are more likely to listen to and want to learn from their peers more than from teachers. Grockit is a company to watch in this space.
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Integration of real-world brands
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Despite the economic slow-down and the various discussions about marketers cutting back on non-traditional advertising/brandinginitiatives, I firmly believe we’ll continue to see real world KT&T brands creating their own virtual worlds. There’s several reasons….
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Companies like Barbie Girls and vMTV have had major success leveraging their audiences/customers into the virtual space and creating longer, more intimate relationships. Monetisation plays a key role here – how do companies extract more revenue from their customers (harsh but true). Virtual worlds expanding on brand relationships and values are the latest paths for enhanced monetisation. They’ll also be a me-to element to this as brands see their competitors deploying strategies and having to follow in order to keep up. The launch of Lego Universe next year will further speed up this movement.
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Vertical Worlds
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This is a term and concept created by K Zero last year – virtual worlds themed by genre or interest. I see vertical worlds being a key driver in advanced penetration and usage. The key here is relevance. In the real-world kids have favourite hobbies and interests. Vertical worlds quite simply are platforms taking these interests and creating virtual experiences based around them. The following section explains this in more detail.
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Digitised play-times
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Above all other areas in this age category I see digitised play-times having major success in 2009. Probably the best example to date is Stardoll. Girls from an extremely early age play with and dress up dolls. Stardoll is the digital version of this. It’s an extremely simply proposition that doesn’t have to be explained to users when they first join – this is key. This specific play-pattern proposition has other companies in the space alongside Stardoll such as goSupermodel and Frenzoo. And we’re now seeing other companies entering the digitised play-time space such as Digital Dollhouse and Club Pony Pals.
Virtual goods
Underpinning the business models in the KT&T space now and even more in 2009 is virtual goods. The reason why this is a key growth area for kids is due to perceived value. Paying real money for virtual items is still a difficult concept for mainstream adults to get their heads around – the perceived value is very low. Children however associate much higher levels of perceived value to virtual items – they make them look cooler, stand-out and assign more importance in some cases against their peers and fellow members in virtual worlds. This presents a growth opportunity for real-world brands wanting to leverage equity and produce new revenue streams in virtual worlds. Platforms offering revenue-share possibilities for brands will do very well.
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Aggregation / theme-park models
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This is an opportunity created from a threat. The majority of KT&T virtual worlds are currently relying on the premium subscription model as their primary revenue driver. The question is, how many kids have more than one premium subscription? Answer: not many. So, virtual worlds have a problem here trying to steal premium members from other worlds.
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One answer might be the creation of a destination/platform which offers kids premium subscription benefits in multiple worlds for a single fee. For example, pay $7 a month and be given premium access to five worlds. This is based on the premise that if worlds are really struggling to convince kids to pay $5 a month then would the world prefer a smaller fee (say $1) or nothing. A dedicated post on this topic is here.
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More localisation
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Virtual worlds are attract global interest regardless of where the company is based. This is demonstrated first-hand to virtual world operators when they look at there user bases. North America typically comes out top but high up the list is the UK, France, Germany, Australia and even Turkey (there’s a dedicated post about the Turkish phenomena coming soon).
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Bear in mind that most virtual worlds have English language interfaces and this builds the case even further for localisation. Habbo and Stardoll have both strongly committed to localisation and newer virtual worlds have to consider this as a key strategic element.
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Next up, the 15 to 25 age group.
