Leveraging Virtual Worlds for Real World Results Dr. Robin
Teigland, aka Karinda Rhode in SL Stockholm School of Economics
www.knowledgenetworking.org www.slideshare.net/eteigland Serdar
Temiz Royal Institute of Technology Photo: Lundholm, Metro
September 2009
Slide 2
Todays discussion Some facts and figures on virtual worldsSome
facts and figures on virtual worlds A look at virtual
entrepreneurshipA look at virtual entrepreneurship Some real life
benefits of virtual worldsSome real life benefits of virtual worlds
BreakBreak A look at some of my virtual world activitiesA look at
some of my virtual world activities A tour of Second LifeA tour of
Second Life
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History tends to repeat itself. Innovation, financial crisis,
industrial revolution, Steam engine Internal combustion engine
Microelectronics Late 18 th C Late 19 th C Late 20 th C Schn 2008
Third industrial revolution?
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Towards 3D Internet Level of Interaction Time Individual - Web
1.0 Thinking Mosaic, Prodigy, Compuserve, AOL, Netscape Connected
Web 2.0 Thinking Facebook, Friendster, Yahoo, Blogger, Wikipedia,
eBay, Typepad, LinkedIn. Amazon, MySpace, Textamerica, Delicious,
HubPages SENSORY 3D Internet Thinking SecondLife, Active Worlds,
There, SimsOnline, Club Penguin, World of Warcraft, 3D planets,
ToonTown, Habbo, VSlide, Protosphere Hamilton 2008
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A growing universe of Virtual Worlds
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What are Virtual Worlds? Persistent, computer-simulated,
immersive environments Persistent, computer-simulated, immersive
environments Shared space/co-presence with possibility for
socialization and community Shared space/co-presence with
possibility for socialization and community In some cases, ability
to manipulate/create content In some cases, ability to
manipulate/create content In some cases, virtual economy and
currency In some cases, virtual economy and currency
http://www.youtube.com/watch?v=0CijdlYOSPc
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Virtual Worlds Open-endedbuilt by residents Open-endedbuilt by
residents Social environment, affinity groups Social environment,
affinity groups Boundaries for access and building Boundaries for
access and building Commerce, education, innovation, and? Commerce,
education, innovation, and?MMORPGs Scripted narrative created by
game designers Scripted narrative created by game designers Goals
and objectives, ranking systems Goals and objectives, ranking
systems Rules for gameplay, winners and losers Rules for gameplay,
winners and losers Entertainment only? Entertainment only?
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What financial crisis? Increasing membersIncreasing members
Increasing salesIncreasing sales Increasing companiesIncreasing
companies Wonderland
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Why VWs ? Is there any market? Today around 150 virtual
worldsToday around 150 virtual worlds Q1 2009: US$68 million
invested in 13 virtual worlds-related companiesQ1 2009: US$68
million invested in 13 virtual worlds-related companies Q2 2009:
Total number of accounts at 579 million, 39% increase from Q1
2009Q2 2009: Total number of accounts at 579 million, 39% increase
from Q1 2009 End 2009 US$ 2bln revenues from subscriptions,
marketing, and microtransactionsEnd 2009 US$ 2bln revenues from
subscriptions, marketing, and microtransactions Virtual Worlds
News, KZERO
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Around 150 virtual worlds Q1 2009: $68 mln invested in 13
virtual world companies
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Number of Accounts-Age (Cumulative) 39% increase from Q1
2009
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40 mln members40 mln members 135 mln members135 mln members Two
popular Kids & Tweens worlds
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Building skills in virtual environments My CV Leading a virtual
team of 30 individuals from across the globeLeading a virtual team
of 30 individuals from across the globe Creating and successfully
executing strategies under pressureCreating and successfully
executing strategies under pressure Managing cross-cultural
conflict without face-to-face communicationManaging cross-cultural
conflict without face-to-face communication
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Clearly if social activity migrates to synthetic worlds,
economic activity will go there as well. Castranova
http://www.youtube.com/watch?v=-ahqjBeknT0
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Gartners hype cycle
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Virtual World revenues USD 2bln in 2009
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Microtransactions business model Zynga: - Majority revenues
comes from 2% to 10% of users who pay $1 an hour to play premium
games or buy virtual goods - Annual sales of about USD 100 mln
Playdom: - Estimated USD 50 mln in sales per year from virtual
goods - Estimated USD 50 mln in sales per year from virtual goods
Social Gaming Network: - Estimated USD 50 mln sales mainly from
virtual goods - Estimated USD 50 mln sales mainly from virtual
goods Weeworld: - Estimated 2008 revenue USD 10 mln+ mainly from
virtual goods Habbo: - Estimated 2008 revenue USD 50 mln from
virtual goods - 10% monthly players pay $10.30/month
http://www.businessweek.com/technology/content/apr2009/tc20090429_963394_page_2.htm
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780,000 users USD 420 mln turnover 2008
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Entropia Universe by MindArk Ability to develop skills and sell
virtual goods Island sold for USD 26,500 in 2004 Asteroid space
resort sold for USD 100,000 in 2005 Clothes Against Violence
limited edition virtual jackets sold for more than same model of
real world jackets Virtual universe with real cash economy Fixed
exchange rate to US Dollar, 1 USD = 10 PED Five banks auctioned for
USD 404,000 in 2007 Real life bank license granted by Swedish
Government to MindArk Bank in March 2009 A business model like the
real world Raw materials and skills required to build / create
Goods deteriorate and need to be replenished
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Jon Neverdie Jacobs in Entropia
http://www.youtube.com/watch?v=Mg4TwOqVprw&feature=related USD
100,000 for asteroid space resort USD 90,000 for bank license
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Entropia uniquely positioned
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Virtual currency and a virtual economy 1.4 million residents
logged in/60 day period 1.4 million residents logged in/60 day
period 70,500 logged on Sunday, Sept 20 70,500 logged on Sunday,
Sept 20 Average age=32, 43% female, 55% non-US Average age=32, 43%
female, 55% non-US 270 Linden dollars USD 1 270 Linden dollars USD
1 350,000 hours of use per day 350,000 hours of use per day 87,500
hours devt time/day 87,500 hours devt time/day $1.6 bln worth of
free work / year $1.6 bln worth of free work / year 68,000 people
making profit 68,000 people making profit Joe Miller, Linden Lab,
2009
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What do these virtual entrepreneurs sell? Real estate &
land rentals Real estate & land rentals Simulation &
training environments, games Simulation & training
environments, games Clothing, accessories, skins, animations
Clothing, accessories, skins, animations Art, design, furniture
Art, design, furniture SL, Sep 2009 Total of 593 Number of
individuals Monthly USD profit
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Redgrave
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SLs first millionaire Started with < USD 10Started with <
USD 10 Buys and develops virtual real-estate in Linden DollarsBuys
and develops virtual real-estate in Linden Dollars Develops
communities in SLDevelops communities in SL Develops 3D copies of
real life buildings e.g. Dresden GalleryDevelops 3D copies of real
life buildings e.g. Dresden Gallery Employs almost 80 people in
real lifeEmploys almost 80 people in real life Bank owner in
Entropia UniverseBank owner in Entropia Universe
http://acs.anshechung.com/index.php
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Virtual Things for Real Money
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New Citizens Inc A successful non-profit Provides services for
SL residentsProvides services for SL residents Est. 2005Est. 2005
Staff of 150Staff of 150 Raises more than USD 13,000 / year to
cover costsRaises more than USD 13,000 / year to cover costs Its
instructors and event hosts paidIts instructors and event hosts
paid
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Todays Discussion Some facts and figures on virtual worldsSome
facts and figures on virtual worlds A look at virtual
entrepreneurshipA look at virtual entrepreneurship Some real life
benefits of virtual worldsSome real life benefits of virtual worlds
BreakBreak A look at some of my virtual world activitiesA look at
some of my virtual world activities A tour of Second LifeA tour of
Second Life
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Showcasing current products IBMs Green Data Center
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Developing new products The Innovision Awards by
Electrolux
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Co-creating solutions Philips Design Group Lead-user innovation
workshops
Facilitating the virtual workforce Completely private virtual
business worlds offering tools to conduct business and
collaborateCompletely private virtual business worlds offering
tools to conduct business and collaborate Fortune 500: IBM, Intel,
Johnson & Johnson, Motorola, Novartis, UnileverFortune 500:
IBM, Intel, Johnson & Johnson, Motorola, Novartis,
Unilever
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Finding and recruiting talent globally Amazon.com job
fairAmazon.com job fair Benelux job fairBenelux job fair Accenture
islandAccenture island IBM islandIBM island
EntrepreneursEntrepreneurs MicroemployeesMicroemployees
Slide 36
Todays Discussion Some facts and figures on virtual worldsSome
facts and figures on virtual worlds A look at virtual
entrepreneurshipA look at virtual entrepreneurship Some real life
benefits of virtual worldsSome real life benefits of virtual worlds
BreakBreak A look at some of my virtual world activitiesA look at
some of my virtual world activities A tour of Second LifeA tour of
Second Life
Slide 37
In-house training and education IFL at SSE and Duke Corporate
Education Co-developing and running a virtual team building
exercise
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Our innovation workshops bring together users from across the
globe Partners Utrecht UniversityUtrecht University University of
InnsbruckUniversity of Innsbruck
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Creating a new fashion brand With Florida State University
fashion designWith Florida State University fashion design New
brand designed and showcased on catwalk during annual pageant on
Planet CalypsoNew brand designed and showcased on catwalk during
annual pageant on Planet Calypso Users / players vote on
designsUsers / players vote on designs Potentially produced in real
lifePotentially produced in real life
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Pros & Cons +Low entry barriers, software often free +VWs
humanize technology +Young generation already there, grown virtual
+Microtransactions +Microemployees +International reach Some
hardware requirements User friendliness Not regulated Real world
skepticism Creating attraction Which world?
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Increasing effectiveness in traditional industries Soon all
fashion designers will be originating their designs and managing
the production in virtual worlds.Why such a dramatic change?
Economics, pure and simple. Shenlei Winkler, Director Fashion
Research Institute Learn how to become an SL Fashion Designer at
Fashiontech.wordpress.com/
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Revolutionizing professions
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Four scenarios for 2015 Fragmentatedworlds Integratedworlds
Advancedusage Less-advancedusage Digital Divide Ease of
mobilityEase of mobility Self-governanceSelf-governance Dominance
by gaming generationDominance by gaming generation Traditional vs
virtual businessTraditional vs virtual business One Converged
Universe High penetrationHigh penetration Easy avatar & asset
mobilityEasy avatar & asset mobility High scalability &
securityHigh scalability & security Business
transformationBusiness transformation Wild Wests Individual MMOGs
dominantIndividual MMOGs dominant Virtual vandalismVirtual
vandalism Security problemsSecurity problems RetreatRetreat Virtual
Silos Many competing, limited worldsMany competing, limited worlds
Difficult avatar & asset mobilityDifficult avatar & asset
mobility Limited scalabilityLimited scalability High securityHigh
security New business modelsNew business models
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The future of 3D internet Before the first plate of aluminum is
even bent for production, the passengers will have flown the plane,
the crew will have serviced the plane, and the pilots will have
flown the plane. CEO of Boeing supplier
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China is making efforts in virtual worlds The real China is
only a piece of land. We believe that there must be a China in the
virtual world and the real world. Robert Lai, Chief Scientist, CRD
Here in China the value of such items is taking off as teens cant
afford the real world items and are compensating by getting a
virtual item that has more online status. -KZERO blogger
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We digitized audio and video, why cant we just digitize, you
know, Earth Philip Rosedale, Chairman Linden Lab
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47 Thanks and see you in world! Karinda Rhode aka Robin
Teigland
robin.teigland@hhs.sewww.knowledgenetworking.orgwww.slideshare.net/eteigland
Slide 48
LPSO.com Littlest Pet Shop Online Littlest Pet Shop
OnlineLittlest Pet Shop OnlineLittlest Pet Shop Online
http://www.youtube.com/watch?v=1DwL1JIv Ghc
http://www.youtube.com/watch?v=1DwL1JIv Ghc
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Connect the World Through Games Connect the World Through Games
Company makes money by Selling Virtual GoodsCompany makes money by
Selling Virtual Goods FarmVille:"Grow delicious fruits and
vegetables and raise adorable animals on your very own
farm!"FarmVille:"Grow delicious fruits and vegetables and raise
adorable animals on your very own farm!" If you don't visit your
farm, your vegetables, animals will die.If you don't visit your
farm, your vegetables, animals will die. Relased in July 2009 and
till the end of August 2009:(In 2 months)33 million people played
it.Relased in July 2009 and till the end of August 2009:(In 2
months)33 million people played it.