Interoperability, virtual goods and forced migration

The idea of avatars being able to move freely between different virtual worlds (known as Interoperability) is a topic always near the top of technology-led discussions about the ‘metaverse’.

Companies such as IBM, Cisco and Linden Lab have had discussions and laid early groundwork down into this area (Read a background to Interoperability here), with the broad objective of freeing up the walled gardens between individual virtual worlds and allowing free avatar passage.

In principle, a great idea.

But wait.

Who’s asking for Interoperability?

I don’t see forum posts, blogs or in-world groups of consumers (avatars) calling on their world operators to ‘let them out’.

Is it a classic case of creating a solution to a problem that doesn’t exist?

Perhaps. Maybe it’s too soon. Early adopters in virtual worlds have more than likely tested and explored different worlds and ultimately found one (or found none) suitable for them. They’re happy. And they stay. And they’ll stay until something new comes along that’s more suitable for them.

Then and only then will they consider spending more time in their new world.Now, this might not mean they close down their account at their first virtual world. It could just mean they have separate accounts in different worlds. However, as virtual cash balances increase and engagement grows in virtual assets (friend lists, inventory items etc) then at this point there may be a strong case for requiring an account port. We’re not there yet though and perhaps in this instance it’s not Interoperability but instead Outeroperability that becomes most likely.

To summarise: at this moment in time, consumer avatars are not requesting or requiring Interoperability.

What about the companies operating the existing virtual worlds? Are they pushing for Interoperability?

Not really. And why should they? – an open door means avatars can enter AND leave.

With many/most/all virtual world business models relying heavily on top line registered accounts growth, active users and in-world transactions, allowing precious avatars the opportunity to discover the grass actually is greener elsewhere, you start to realise that worlds don’t really want migration.

So in a consumer avatar scenario, does Interoperability actually have a role to play and a demand?

Pretty soon YES.

And we would have got away with it if it wasn’t for those pesky kids. We’re entering an age of kids, tween and teenage virtual worlds attracting millions of new accounts. And in these worlds, virtual goods and gifting will become the dominant revenue stream for world owners. More so in fact that income derived from premium accounts – a revenue stream with a ticking clock I think. Why? Because as new worlds enter the marketplace they will struggle with differentiation in some cases and then have to compete on price with worlds with premium subs models. In other words, they’ll have to provide for free the services provided at a price by existing worlds. Virtual trade will replace premium subs.

As this begins to happen, the concept of an avatar lifetime value will become of paramount importance to world owners. Buying items in-world with the owner taking all or a % of the transaction fee will increase the focus on looking after your customers. Also worth remembering is the fact that as worlds shift from premium subs to virtual goods are their primary income streams then they lose total and grip over their accounts. This is because the consumers are not buying annual or monthly (contracted) memberships to enjoy premium services – these are now offered for free. So without the comfort of regular revenue coming from premium subs they will have to focus even harder on CRM.

To draw an analogy here, it’s similar to the difference between line rental revenue and usage (traffic) revenue for Telco’s. Smart Telecoms companies realise long ago that relying on line rental income was a short-term strategy – encouraging customers to use their phones more was the superior option. The irony here though is that although younger worlds will drive forward the acceptance and usage levels of virtual goods, thus generating highly profitable avatar lifetime values, these avatars will actually have fixed length lifetimes.This is because younger worlds will have maximum age limits for members – once you hit 16 (for example) you’re no longer allowed access to the world.

The main driver for upper age limits will be to reduce the threat and risk of unsavory adults sneaking in for grooming, stalking etc. A sad but true fact. Another less important driver for having maximum age limits will be when worlds are created to address specific genres or ‘lifestyle group’ – the obvious example being virtual worlds catering for school types (middle school, primary school etc). Either way, expect more worlds with maximum age limits.

So the irony is that worlds will work hard to attract new accounts and retain them in order to derive lifetime values and then force them to migrate elsewhere once they reach a certain age.

So perhaps this is the problem that Interoperability is the solution for.

As avatars reach their upper age limit in a world, they’ll be well customed to using real money (their’s or their parent’s) to purchase virtual goods. They’re also likely to have a well stocked wardrobe of virtual clothes and probably a positive cash balance as well. In other words, they have a value – a value to a virtual world that the avatar in question is now (or shortly) eligible to join. It’s likely that these newly available (by age) virtual worlds would actually pay a fee to the existing world to allow the avatar to port themselves and their assets into their world – and hopefully carry on spending.

In this scenario, Interoperability is absolutely required for both the avatar and the world owners. The old world wants the ability to sell their outgoing avatar to the new world. The new world wants the process of porting to be smooth. The avatar (the consumer) wants the ability to take their assets smoothly into their new world. Using the Telecoms analogy again, this process is similar to Number Portability – with the exception that in this instance both parties want the port to happen.

So, Interoperability could start to take place between selected virtual worlds. I say selected virtual worlds because I’m sure what will happen is worlds will start to select suitable partners as next steps for their avatars and we’ll start to see different migration paths opening up. But if this does happen, would it be the likes of Cisco or IBM creating the Interoperability solution or instead cross-company development teams from the old and new worlds combining? I’d place my money on the latter.

So, you never know, pretty soon we may see the selling of avatars from one world to another as they reach the maximum age limit and therefore Interoperability being a solution required by multiple parties.

Virtual human trafficking?