Posts Tagged ‘virtual worlds’
Entropia Universe opens up a new financial dimension on virtual worlds
March 23rd, 2009
I’ve just had to pinch myself very hard … on hearing that sci-fi virtual world environment Entropia Universe has been granted a banking licence.
The game’s developer, MindArk, has received preliminary approval from Finansinspektionen, the Swedish Financial Supervisory Authority which allows the company’s Mind Bank, which serves as a central bank for all of the different virtual worlds within the Entropia Universe, to function fully as a commercial bank.
Entropia Universe has a cash-based economy and players can exchange real money for game currency at an exchange rate of 10:1 (ten in-game dollars to one US dollar). Last year, the virtual economy generated nearly £290 million across hundreds of worlds on Entropia.
It’s an extraordinary time to be launching any new banking institution, let alone one that is virtual and real - at the same time. This conjunction is slightly bewildering and leaves me feeling more than a little dizzy. In one respect, it’s not that much more different than any online banking offering, but in another it’s very weird indeed, in that the goods and services being bought and sold are just code - zeros and ones. They exist virtually - and in transaction records.
Deposits made into the Entropia central bank will be under strict European banking regulation with continuous monitoring and audit by financial authorities. Customers will be backed by Sweden’s £41,000 deposit insurance and the Mind Bank will offer interest-bearing accounts have direct deposit options and let players pay bills online. The company will also be able to offer loans to customers and issue bank cards.
I’m not suggesting that there is anything amiss here, simply that a financial institution supporting economies that work in the virtual space is a little mind-boggling.
But I suppose that when players can reverse out of an in-game economy and exchange their virtual wealth for cash in the real world, the threat of inflation from lack of controls is present – but maybe not as much as in hermetically sealed virtual worlds, where we’ve seen hyper-inflation and serious economic malpractice by players. MindArk believes the bank will help to control inflation by regulating the economy.
I hope the instruments they use will be more acutely tuned to the changing needs of the economy than those we’ve seen deployed in the real crunched up world. It’s good to know that while Sweden is in recession too, the country’s banking system and financial leaders are considered very sound. President Obama cites Sweden as a potential model for resolving the current banking crisis, based on its highly successful handling of the previous crisis in the early 1990s.
If Mind Bank replicates the sound financial judgements that have helped to keep the Swedish banking system away from the worst excesses we’ve watched unravel, then Entropia should be a sound investment environment - certainly more appealing than the current crop of banks.
And it also underlines again for us in PR the need to keep pace with the rapidly maturing and economically significant virtual spaces where people will be buying, selling, investing and engaging.
Google Lively shuts as there is no second life for flat virtual worlds
November 25th, 2008
So farewell, then, Google Lively. Six months into development and soon (December 31) the virtual world is to be no more.
A deluge of news and opinion, and not a few blogs, have followed the announcement this week and from my scattered reading focussed on the economics and cultural reasons for the search company’s decision.
Google has made so many good calls in its 10 years that it’s weird to think it could make a bad one. But in the case of Lively, it does appear to have burnt considerable cash and resources on the construction of a useless product.
In the few times I ventured into Lively, there was an overpowering sense of pointlessness, which I’m pretty sure wasn’t a manifestation of mid-life crisis because my mood lifted as soon as I exited the virtual world.
Maybe at the root of this is an indication of what virtual worlds must have to thrive – a sense of belonging, of purpose, of achievement and, whisper it quietly, a sense of fun. I don’t think that these are easy elements to conjure up in a virtual world (and I did try to build one commercially some time ago) but without them, there really is no point in construction.
The knives are out now for Second Life but at least that environment does offer some of these key elements, albeit in a clunky, steam-punk style (without the Gothic class). We can watch SL fight for survival and keep an eye out for Sony’s Home - and gaze with mild disenchantment at the XBox Experience… but also remember that virtual worlds are still very little to do with state-of-the-art 3D and much more about a gentle ecstasy, joy or something close to that.
Second Life and second coming for virtual worlds
November 17th, 2008
I was trolling around a couple of old-fashioned virtual reality worlds over the weekend – the print versions of Guardian and Observer newspapers. Sometimes I really enjoy the different pace and mindset of reading print. I’ll be careful not to stretch the virtual world simile too far with these newspapers, though it did feel a little like that, wandering through editorial constructions of the worlds we live in.
Anyway, virtuality has surfaced again in press agendas with the Second Life divorce story that Mark Lawson commented on in Saturday’s Guardian. and Victor Keegan’s full-page Observer Focus on the “virtual revolution” the next day. Lawson warned about the emotional damage that could be caused in the real world from actions taken in a fantasy environment. Keegan wrote on the explosion of virtual worlds and the potential impact on real economies.
It was good to have the views of these two significant commentators so close together, with Lawson’s edgy assertion that popular culture needed to come to terms with the fact that fantasy actions have real emotional consequences balanced with Keegan’s economic perspective. Keegan warned that developing economies, particularly China, were building truly massive online 3D environments with the aim of luring customers in the developed economies to try then buy goods cheaply at source – collapse of middleman markets. A scary prospect but one that still has to wrestle with the realities of sub-prime service delivery, leading to lag, crashes and “unforeseen effects” (hardly conducive to making a sale, or for that matter, a “positive brand experience”) .
While Lawson confined his view to Second Life and reality TV, hooked around the suicide of an X Factor contestant in the US, Keegan named the usual suspects (SL, Entropia, Runescape) in his top picks, along with newcomers Twinity and Football Superstars. Keegan also made much of the European innovation and entrepreneurial spirit embodied in all the above, with the exception of SL and also doffed his cap to the Euro brilliance of Habbo, even stretching the Eurozone to include World of Warcraft (owned by French company Vivendi!)
At the risk of being unpatriotic, I could also mention Metaplace. I think this virtual space has everything – except an opening for me as a beta tester! It’s an open platform (world first?) that people can use to build their own virtual environments. The vision is to build a network of worlds, an ecosystem of business, education and pleasure. And the visionaries are Raph Koster, who you may know as former Sony Online Chief Creative Officer and author of one of my favourite manuals, “A Theory of Fun for Games”. He has easily completed his 10,000 hours required to become a Master in a given discipline (Malcolm Gladwell). Co-founder John Donham (also qualifying as a 10,000-hours Master) has helped to bring to fruition, among others, Everquest and Star Wars Galaxies. And investors include Mark Andreesson – another of my heroes. To cap it all, one of the advisors is Dr Richard Bartle, one of the most astute commentators on virtuality I’ve met.
I just begin to sense that the virtual universe has expanded again and moved out of the darker side that saw SL sign-ups fade away and investors lose their taste for these types of projects. And that is going to be good news for brands who want to find more routes to engaging with customers – and great news for those of us who love the sheer joy of a virtual world that connects and clicks.
July 28th, 2008
I picked up on a podcast interview and NMA profile of Habbo’s regional MD Europe, Phil Guest on the re-emergence of virtual worlds. It was for me a timely reminder that “it’s all about the kids”. While I’ve struggled with the adult vworlds, out there are more than 100 child-friendly worlds – and Phil said there were many more on the way as leading brands piled in to create playful spaces to build connections and trust with their young customers. Maybe that’s it – there’s a point to these places FUN!) and users who know how to connect, cluster and make the most of their time there. Phil had no doubts that worlds like Habbo sat on the blurring line between real and virtual that young people understood – and that these worlds were a next step in the development of social networks because they were immersive, playful spaces with meaning beyond connections and self-reference. Look forward to the Feast of the Avatars, coming to a social network near you soon.
Pulic Relations in Virtual Worlds
May 27th, 2008
As part of the social media mix, how do PR agencies engage in virtual worlds?
Text100’s optimistic, if slightly aged, view is that virtual worlds are an essential part of the social network – and will grow in importance over the next few years.
A more sanguine views from brand communications agency Cow suggests there are opportunities but also current issues that make engagement in virtual worlds like Second Life problematic for agencies.
We’ve seen a few PR companies working in SL including: Text 100, Leo Burnett, crayon, Edelman, GSD&M, Lewis PR and Press Dispensary. Measuring the effectiveness of their engagement is a fuzzy process.
Recently, senior Second Life residents voted to ban PR from their environment (over-zealous marketers) but are still discussing exactly how to do that!
However, management consulting firm McKinsey & Company reports that virtual worlds are on the cusp of a major expansion - particularly as a way to reach younger customers - and that companies were “ignoring them at their peril.”
I wonder if there will be a second coming for worlds like Second Life – and with that, opportunities for PR agencies to engage. My experience of them has been largely negative – and recent upgrades in Second Life have not changed that view. But Second Life’s in-world economy is growing at 15 percent annually with user hours, concurrency, and economic transactions all showed robust growth.
Against that there’s been a recent slowing in Second Life new account sign-ups. In March only 408,000 new accounts were created, the smallest gain in absolute numbers since September 2007, and the smallest monthly percent gain since Second Life’s debut in April 2001. Second Life shed 1,656 paid accounts in March, the fourth month in a row more people got out of the land trade than entered it. Total premium accounts stand at 89,875, below last summer’s 94,607 peak.
Estimates of active users also vary from 500,000 to 11.7 million (total accounts: 13million).
Right now, there may be up to 20 virtual world companies developing in stealth mode. They may see the light in the Autumn at the Virtual Worlds shows in San Francisco and London. Multiverse has just released a platform upgrade that gives developers the choice to build worlds in 3D or 2D Flash.
And Apple’s iPhone games initiative opens up the potential for 2D/3D mobile social spaces.
At the younger end of the market, Habbo Hotel remains the benchmark. There are currently Habbo communities in 32 countries on six continents. To date, more than 94 million Habbo characters have been created globally and 9.5 million unique users worldwide visit Habbo each month (source: Google Analytics). The average Habbo user spends nearly 40 minutes on the site per visit.
In-game advertising company Double Fusion signed up recently to manage interactive brand campaigns with retail, fashion and sports companies in US. Over 200 advertisers have used Habbo globally - in-game billboards, contests, interstitials and instant-console messaging, customized brand rooms, sponsored quests.
Right now, I think that my advice to brands would be to watch and wait for Web 3.0, where hopefully the current technical and cultural dislocations in virtual worlds will have been resolved. Meanwhile, we could be thinking through exactly how to advise and engage when the time is right.