Monday, September 13, 2010

Virtual worlds: is this where real life is heading?

Things have been quite for a while concering virtual worlds, now that the hype around Second Life has more or less died down....anyway, this recent post from The Guardian has some useful recent overviews, such as concerning apps like Farmville:

Recently a man bought a space station for $330,000, while last month Small Planet Foods, a subsidiary of General Foods, introduced a new brand of organic blueberries. What have these two products got in common? Neither actually exist. Well, not except as pixels in the virtual worlds where they are traded. Only the money is real.

The space station was sold in the virtual world Entropia Universe, which has its own economy and currency. The buyer, who converted his $300,000 into 3.3m PED (Project Entropia dollars), is convinced that virtual shops on his virtual space station will produce virtual profits that can be converted back into real dollars. The blueberries represent a "brand extension" of a product that exists in the real world as US company General Foods aims to establish a presence in FarmVille, a game which exists as an application on Facebook and which at its peak has had nearly 80 million players. It is a classic example of a new genre.

Farmers in FarmVille buy cartoon-like virtual farm animals, which have to be regularly fed, or crops that require fertiliser (virtual, of course) to help them grow, in order to be more successful than their friends. The real-time game has its own virtual currency that makes it easier for members to trade and for the game's makers to profit. Parent company Zynga has revenues of more than $600m a year which come mainly from FarmVille, despite competition from half a dozen other farm games on Facebook. Zynga is reckoned to be worth between $4bn and $5bn, based on the value of investment stakes that have been taken in it.

To many, this seems crazy: why spend real money to buy a virtual currency to purchase food in order to stop a pig that doesn't exist from dying through lack of food? The easy answer is why not – if that's what you want to do. It is arguably a lot more "real" – whatever that means these days – than, say, sitting like a couch potato watching a soap on television.

This might still seem the stuff of fantasy but it's where real life seems to be heading: according to some analysts, we are in the midst of a virtual revolution that might one day be considered as important as the industrial revolution. Nic Mitham, founder of KZero, a Cambridge-based consultancy, says that there are 175 virtual worlds that are live or in live beta and that the number of registered users to them has risen from 880 million in the fourth quarter of 2009 to 1.1 billion today, a 25% increase within six months in the middle of a recession. The registered population of virtual worlds (even if this is not the same as active users) is greater than the populations of the US and Europe combined.

Read more at - 'Virtual worlds: is this where real life is heading?'


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