Open platforms, more flexible graphics, cheaper storage, faster connections, more 'socially educated' consumers, and more international audiences are enabling a next-generation virtual landscape. Rather than proving that virtual reality is technically possible, these new competitiors to the space are expanding virtual worlds into a traditional consumer technology segmentation. This sampling of virtual businesses showcased at Under the Radar provides an illustration:
1. The mass-market brand. Kaneva bills its virtual reality as '3D for the masses,' and is combining a social network with entertainment and casual gaming. In its first three months of public beta (launched in April 2007), the company attracted 350,000 registered members. By targeting 18-34 year olds from the mass market rather than early adopters, Kaneva sees itself competing with traditional entertainment such as TV and movies. Revenue comes from (a) sale of virtual items, (b) sponsors integrating their products and brands into virtual stores, and (c) games. The most telling evidence that the company is reaching the mass market? Target will start selling Kaneva game cards at retail this fall.
2. The portable widget. Meez leverages a core concept, portable identity, and enables users to build avatars that can be exported and used in non-Meez environments. This bridge between 2D Flash and 3D clients works cross-platform and supports key 3D features like item attachment poinrs, texturing particle effects, and multiple camera angles. Since the browser 3D can be exported into 2D, users are able to keep the same avatar across all virtual worlds, rather than setting up a new one each time. While the service appeals to a strong female demographic, the company is maintaining a user base that is 65% female/35% male (interest has proven to be more sustainable with sexual tension), mostly US, and an average age of 18. In its first year, the company has amassed 2 million registered users and is enjoying a fat swing on the hockey stick, adding 425,ooo new users/month currently.
Like most in the space, Meez plans to monetize the service through brand advertising, virtual item sales, gaming, and mobile fees. Given its young shopper demographic, the company's ads earn 4X the CPM of social media sites, and fashion sites such as Glam.com are selling Meez media.
3. The content network. Multiverse has developed an open platform for virtual world development, which it hopes will become the new medium for MMOG entertainment and virtual simulation. The network is distributed, and the company distributes the SDK but does not provide hosting. The open standards platform is designed to facilitate a network of virtual worlds, and this group of ex-Netscapers envisions that their 'worlds browser' will become the first descendant of the web browser. This has huge ramifications - on today's web, sites have the flexibility of being developed standalone, with application or data integration, or networked. Games and virtual worlds don't do that today - but if they did, there would be much less friction in the system for both users and developers. Unlike most, Multiverse has an ad-free business model: it's free to use their technology up front, but once you start charging others to use what you've built, you owe the company a percentage.
4. The corporate theme park. Doppelganger works with entertainment companies to create immersive entertainment experiences for fans. (Tyra Banks, Maroon 5, and DJ AM are all examples of properties in Doppelganger.) If Second Life is an aggregation of individual experiences upon a shared platform, then Doppelganger could be considered a community of indviduals personalizing a shared experience. The company's business model is based upon its virtual economy, leveraging both the existing brands being promoted inside the environment and the homegrown brands. Translation: The income stream is 2/3 interactive ad revenue, and 1/3 virtual goods revenue.
This market expansion brings up some long-term questions: Will virtual worlds technology (note that this may be a distinct concept from virtual reality) become the successor to Web technology? If virtuality does become prevalent, how will our current Web interaction layers, workflow systems, and basic human behaviors be influenced, or superseded, in 5, 10, 20 years by these visual and spatial systems?
