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Overview

The Virtual Worlds Management Industry Forecast 2009 collects responses from over 60 industry executives, analysts, observers, and thought leaders on what the coming year holds for the virtual worlds industry. The answers below have been edited only lightly for formatting and a consistent style. Otherwise they've been left untouched, providing a snapshot of the industry's status, mindset, and goals regarding 2009.

Questions Asked and Answered

We asked Virtual Worlds Management Industry Forecast 2009 participants the following questions:

1. What are your top 3 trend predictions for the virtual worlds industry in 2009?
2. What business and product goals have you set for 2009?
3. What challenges do you expect 2009 to bring for the virtual worlds industry?
4. How will you adjust to the economic changes of the recent months and coming year?
5. What was the most significant evolution of your company over 2008?

The Economy

The sliding and skidding economic environment is on the top of most respondents minds, both when asked about the challenges of 2009 and the opportunities.

While investments in the virtual world space will likely go down in 2009, innovation can still be rewarded. In effect, the recession may lead to something of a culling of the herd, but still promote some virtual worlds and developers to greater success than before.

"In this spirit, I fully expect to see many innovative improvements made on existing platforms and technologies," wrote Jeffrey Pope, Executive Vice President, ngi US. " All at a price point that is increasingly in the buyer and/or users favor. [...] For companies starting out in this space, I would offer that the most compelling business cases are those where cost and revenue projections are in line with a realistic growth scenario based on discussions with potential customers for the technology, rather than broad assumptions."

Enterprise

Many vendors promoting enterprise-targeted virtual worlds view the economic slowdown as a double-edged sword. Discretionary and experimental budgets are being slashed to cut costs, but travel dollars seem to be running out just as quickly.

"This is a perfect opportunity for our industry. Enterprise virtual worlds have clear business advantages in this economic downturn and the industry has to convey these advantages just as aggressively as the social software/web 2.0 market did in the last 3 years," wrote Rivers Run Red CEO Justin Bovington.

Others, many outside of the direct enterprise space, are more skeptical, seeing the economic climate pop the enterprise bubble for good. Others, like The Electric Sheep Company CEO Sibley Verbeck, see the enterprise market in state of stagnation so that the end of 2009 will look much the same as the beginning.

Advertising and Virtual Goods

While advertising growth was the big trend for virtual worlds through even the end of 2008 and many publishers are still signing new deals and partnerships, speculation in and outside of the industry is that growth is, at the best, slowing and, at the worst, ad dollars are drying up. That's partly due to the general economy, but also due to specific concerns in virtual worlds. While attempts have been made to find a common language for discussing ad sales and metrics, that's an ongoing challenge for 2009.

"Hybrid models are emerging, and the lines between avatar providers, social networks, gaming and virtual world environments are often blurred," wrote WeeWorld General Manager Lauren Bigelow. "It is extremely difficult to compare environments that are so strikingly distinct. Currently, it is often an apples to oranges comparison."

Virtual goods, while not always easier to measure, allow for both branding opportunities and direct monetization from users. After the economy's direct effects of potential bankruptcies, mergers, or acquisitions, the single largest trend in responses is the increase of virtual goods as a business model.

"Even as online advertising gets choppy, the biggest virtual economies are flourishing. And now Facebook, MySpace, and Bebo are all getting into virtual gifts - a pretty strong vote of confidence that the market is out there in North America, and not just with teens," wrote Michael J. Griffin, Creative Director, Leap In Entertainment. "Here's a chance to show that virtual worlds aren't the ugly sister of social networks, but really Cinderella in disguise."

Technology: Downloads, Browsers, and Dimensions

Another discussion carried over from the last year is what place different technologies and visions have in the virtual worlds space.

"3D on the Web will continue to be a bit disappointing, but will become far more commonplace through Unity and Flash-based engines like Papervision," wrote VastPark CEO Bruce Joy. "This suggests 2010 may be the watershed year where 3D on the Web goes mainstream. That's when we all become rock stars and live large, right?"

Predictions on this note are just about equally divided, though. Many see the same trends, to a greater or lesser extent, as Joy. Many others still see any sort of plugin or download as a prohibitively high barrier to entry.

"True Web-embedded 3D still looks like it is a ways away," counters Metaplace CEO Raph Koster. "All the solutions today require plugin installs or downloads, which remains a significant barrier to mass market adoption. It may be that we will see one plugin or another gain enough traction to really become ubiquitous and thence a standard, but right now, it still looks like the install bases for any 3D Web solution are too small to make a dent in the real mass market. So I think that wide adoption of 3D on the Web is still at least a year away, unless some killer app comes along that upends the apple cart."

In general, though, the consensus is that the Web is the way for 2009. Whether that's larger integration with Web apps for downloadable, thick-client virtual worlds or simply the proliferation of browser-based worlds in any dimension, contributors are recognizing that consumers want to keep their existing services and habits.

For more detailed thoughts on these topics and many, many more browse through the responses below.

To receive a copy of the report please send an email to
vw2009forecast @ showinitiative.com
A You will be emailed a link where you can download the 1 MB PDF 45-page report.
We promise not to spam you we simply want to know who's reading the report.