11

Higher education in Virtual Worlds- Industry and Competitor Analysis in Europe/US

Group 3a February 7, 2011

22

Higher Education in VWs

Case Study VWET

Industry Analysis

Conclusions, thoughts and recommendations

References

Contents

44

Higher Education in VWs - General Information

• Higher Education in Virtual 3D Worlds

• Higher Education in Virtual World’s can be divided into two main strategies based on the platforms:

Virtual Worlds with optional eLearning

possibilities

Virtual Worlds that have eLearning as their single

purpose

e.g. Second Life e.g. OLIVE

Non-specialized Specialized

Sponsor interviews

Higher Education in VWs - Value chain

Internet Server

Software

3D VW Platforms

Org with education

and/or training

Recipients

5

• Second Life• Active Worlds• OLIVE

• OpenSimulator• Croquet Consortium

• Universities• Governments• Organizations

• Students• Employees

“Support-centered companies focused on helping universities, organizations and other institutions for educational and business usage of virtual 3D environments”

• ReactionGrid• 3rd Rock• VWET

3D VW and

education consultants

Warburtson, S, 2009; OpenSim Grids; 3D Virtual Worlds List

6

Case Study: Virtual World Education Technologies (VWET)

“Virtual Worlds are still new, they are still developing, people are still not comfortable with it” (quote J.F.)

“ESMG/VWET offers the kind of service and support that makes thetransition from real life to virtual life almost effortless”

• Support-centered company

• Use SL as one of their environments

• Designed own platform as well, making them a VR provider

• Currently support some of the most forward thinking institutions in SL

• Biggest competitive advantage: “Clients are still acquired face-to-face, not only

virtually”

• Committed to providing the highest quality environment and support for

educators working to provide educators with a viable option to current platforms

Sponsor interviews, http://www.virtualworlded.com/

7

Industry Analysis – Porter’s Five Forces

7

Buyers• Universities• Organizations• Governmental

institutions

Bargaining Power of Buyers(-) More buyers than sellers(-) Quality vital for the buyer(-) High switching cost(-) Seldom negotiate(+) Possibility of backward integration (create own

platforms)(+) Complementary element (Change in the future)

Suppliers• VW Platforms• Open source

frameworks

ME

DIU

M

Bargaining Power of Supplier(-) High ability by industry buyers to do backward

vertical integration (create own platforms)(-) Supplied products (platforms) are

undifferentiated(-) Many suppliers

LOW

Sponsor interviews, Porter (2008)

8

Industry Analysis – Porter’s Five Forces

8

Substitutes• 2D-platforms• E-learning

(-) Low capital requirements(+) High switching cost for buyers(-) Low product differentiation(-) No legal/regulatory Barriers(+) A few companies have a first mover

advantage likely to change

Threat of Substitutes(+) Similar functions(+) Socio-cultural beliefs

(Traditionalism)

Barriers to Entry• Relationships• Knowledge/

know how

HIG

HM

ED

IUM

Sponsor interviews, Porter (2008)

9

Industry Analysis – Porter’s Five Forces

9

Rivalry (+) Equally balanced competitors(-) High industry growth(-) Low fixed costs low exit barrier(-) Possibility of strategic

differentiation in strategy(-) High profit potential

LOW

:Sponsor interviews, Porter (2008)

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Industry Analysis – Overview

11

Bargaining Power of Suppliers

Threat of Potential Entrants

Bargaining Power of Buyers

Threat of Substitutes

Rivalry Between Competitors

Political

Economic

Socio-cultural Traditionalism

Technological

Environmental

Legal

Bargaining Power of Suppliers

Threat of Potential Entrants

Bargaining Power of Buyers

Threat of Substitutes

Rivalry Between Competitors

Socio-cultural Social media integration new types of competitors

Large accep-tance for VW and distance learning

Improved attitute for VW interaction /social media int.

Industry growth make room for more players

Technological Higher demand for suppliers’ high-tech

Tech dev. will make it more accessible and attractive

Higher user requirements on prestanda, mobility, etc

Lower demand for substitutes mentioned

Newtypes of competitors, wide-spread usage of tech

Economic Somewhat affected by national GDP

Tuition fees rising

Unsure effect

Environmental Increasing environmental consciousness

Promotes industry growth

Political EU-wide investments in R&D

Joint effort within EU on bandwidthLower barriers

More competitive landscape

Sponsor interviews, Internet sources; STEEP

12

Industry Analysis – Key Success Factors

12

What do users want? How do we survive competition?

KEY SUCCESS FACTORS

- Good understanding of institution/organization

- Ease of use- Adaptability- Proximity to IRL

relationships to peers, teachers etc.

- Social media/ OER integration- Good use of mobile internet devices- Relevant contacts/ networking- On LT, develop a strategic focus

Sponsor interviews, http://www.pjb.co.uk/npl/bp34.htm

- Technical functionality- Training of/

communication with buyers

- Acknowledgement among institutions for higher education

13

Industry Analysis – Future Predictions

Learning, social interaction and entertainment´become integrated

Growing share of user-generated content and platforms where educators

can build their own environment

Freemium models/ larger proportion of free material

http://www.googleartproject.com, Sponsor interviews

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Conclusions

- Applying Porter’s 5 Forces and a STEEP analysis on the industry for Higher Education in Virtual Worlds reveals its rising importance and potential of growth

- While the threat of substitutes is high, the bargaining power of buyers and the barriers to entry can be categorized as medium

- Rivalry within the industry and the bargaining power of suppliers (VW platforms) on the other hand, appear to be relatively low indicating potential for companies involved

- This is supported by the STEEP analysis which reveals support amongst all factors (e.g. future technological developments and social acceptance of VW:s)

- Therefore it can be concluded that Higher Education in Virtual Worlds will play an important role in future learning and – as an industry – offers opportunities of profitability

1515

Sources

• Warburtson, S; Second Life in higher education: Assessing the potential for and the barriers to deploying virtual worlds in learning and teaching, British Journal of Educational Technology, Vol 40 No 3, 2009

• Interview John Fennessy, 2011-01-31• Interview Jeroen van Veen, 2011-01-28• Interview Steve Mahaley, 2011-02-04• Interview Erik Wallin, 2011-02-02• http://www.virtualworlded.com• OpenSim Grids, http://arianeb.wordpress.com/2010/04/11/open-sim-grids/, 2011-02-05 • 3D Virtual Worlds List, http://arianeb.com/more3Dworlds.htm, 2011-02-05• http://www.pjb.co.uk/npl/bp34.htm• Porter, M.E., “The Five Competitive Forces that Shape Competitive Strategy”, HBR, 2008.

STEEP• http://www.pjb.co.uk/npl/bp34.htm 2011-02-05 • http://www.budde.com.au/Research/European-Telecommunications-Infrastructure-and-NGNs.html 2011-

02-05 • http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-10-050/EN/KS-QA-10-050-EN.PDF 2011-

02-05 • http://www.reuters.com/article/2009/08/31/us-europe-mobile-idUSTRE57U1IQ20090831 2011-02-05 • http://www.eua.be/fileadmin/user_upload/files/Newsletter_new/economic_crisis_19052010_FINAL.pdf

2011-02-05 • http://ec.europa.eu/public_opinion/archives/ebs/ebs_313_en.pdf 2011-02-05 • http://ec.europa.eu/public_opinion/archives/ebs/ebs_313_en.pdf 2011-02-05 • http://www.siliconrepublic.com/innovation/item/17956-eu-makes-massive-780m-inve 2011-02-05