Virtual Worlds Are So Hot Right Now: $345 Million Invested So Far This Year
  • 82 Comments
by Erick Schonfeld on July 8, 2008

I feel like today is Virtual World Day. We started off the morning covering the public beta launch of Vivaty, then Second Life and IBM announced that they bridged two virtual worlds, and Google launched its own version of virtual worlds with Lively.

If it seems like everybody is starting their own virtual world, it is because they are. A report put out today by Virtual Worlds Management tracks $161 million put into 14 virtual-world investments during the second quarter of 2008. In the first quarter there was even more activity, with $184 million put into 23 virtual worlds and supporting technology companies. That brings the total this year alone to $345 million across 37 deals. Some notable deals (you can see the full lists by clicking on the last two links above):

Second Quarter 2008

Grockit——————-MMO Learning Game——-$8 million——-Integral Capital and Benchmark

Nurien Software——–3D social networking——-$15 million——-Northern Light, Globespan, NEA

PrimeSense————-Gestural Interface———-$20.4 million—–Led by Canaan Partners

Realtime Worlds———-MMOG Developer———$50 million——–Maverick Capital, NEA

Stanford Parallel —-Parallel Processing————–$6 million——-Sun Microsystems, AMD, Nvidia, IBM,
Processing Lab for Virtual Worlds HP, and Intel

Turbine———————-MMOG——————-$40 million————–Time Warner and GGV Capital

First Quarter 2008

9You———–Virtual World/Casual Games——$100 million——–Temasek Holdings

Dizzywood —————Youth World————— $1 million——-Shelby Bonnie, Charles River Ventures

EveryScape————— Mirror World————–$7 million——–Dace, Draper Fisher Jurvetson

Fix8 ———————- Avatar Content————$2 million ——–SK Telecom

Gizmoz ——————- Avatar Creation ———- $6.5 million——-DoCoMo Capital, ngi group

iOpener ——————–Mixed Reality ————-$6 million———Triangle Venture Capital

Sparkplay Media——Casual MMO with Games—–$4.25 million—–Redpoint, Prism Ventureworks

Unisfair ——————–Virtual Events Platform—–$10 million——-Norwest, Sequoia Capital

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  • So many virtual worlds for me to go to. What a shame. My spare time is mostly spent on gardening, baby sitting and BBQ. I am just too busy to be virtual.

  • but,i really don’t like the virtual worlds.i even never went to there anytimes.

  • Erick,

    Do another post on how much money these virtual worlds are actually making..I would love to know that

  • House of cards. I was at the conference in San Jose built and got told to invest in one of the many companies doing this.

    It got me thinking about demographics. The greatest percentage of the population is still the older age group and they have the most money. Selling this group on social sites is one thing but a virtual world is another completely. I am a net geek and I don’t want to spend my time in a fake world when the real world is so spectacular. I can’t get past this point. Your still on a computer, no matter how amazing the graphics, it can’t compare to the physical and emotional stimulus of real world interaction.

    Can a virtual world ever match the feeling of having a pretty girl smiling at me and the answer is always no…. I can’t get past that…

    That said gaming sites do well online so there must be a market but how big is that market. Also how long till 2nd and 3rd world countries have the net speed to handle virtual worlds.

    I guess you can say I am undecided but I tell you this, I hope my kids have better things to do than live on a computer. Has life become so pathetic that virtual worlds are the answer?

  • Seriously. If I wake up one day and the internet is “The Sims” I will shut off my computer and never look back.

  • Do you mean the V-Worlds are so hot or the virtual women… The pic makes me wonder ;-)

  • this is really helpful research. it would be great if you covered other hot areas in web technology. product reviews for instance, many wouldn’t have guessed how much has/is being invested..powerreviews 22+ million, bazaarvoice just raised their 4th round, summize used to be product reviews focused.., wize, retrevo, etc.

  • Erick, you forgot Metaversum GmbH with twinity.com. Balderton Capital invested several millions in this company in april 08.

  • OVERATED…..clap.clap….clap.clap.clap

  • {seesmic_video:{“url_thumbnail”:{“value”:”http://t.seesmic.com/thumbnail/d2kacotIYU_th1.jpg”}”title”:{“value”:” ”}”videoUri”:{“value”:”http://www.seesmic.com/video/ALCBkCX2sz”}}}

  • wow. reading some of these responses reminds me how email was a fad that would never catch on, at least according to my gramma. its an infant technology, and there is a lot of fluff that will eventually be seen as a cash sinkhole the same way so many dot coms were. but its a vibrant technology and in 15 years you will see it being ubiquitous. picture the internets in the early 90’s. its the future baby. adapt or become a fossil. btw, i earn a living as an independent developer for second life, so im a bit biased.

  • People seem to be liking reality less and less. It’s not that bad is it? I enjoy my video games but also enjoy the real world. An entire virtual “world” is just too much.

    PS: Nice video comment Mike, heh :P

  • Don’t forget Vastpark, Blink3D(big big potential with lowest barrier to entry), Multiverse, Activeworlds, Twinity, and now Vivaty and Lively. There are 2D virtual worlds as well, like Metaplace.

  • This might go down as the most asinine, near-sighted comment in history, but I really do feel like these virtual worlds are a passing fad. I don’t see myself ever participating in one.

  • leweb! {seesmic_video:{“url_thumbnail”:{“value”:”http://t.seesmic.com/thumbnail/Pg33quJi4h_th1.jpg”}”title”:{“value”:”leweb! ”}”videoUri”:{“value”:”http://www.seesmic.com/video/Q3Q4oPaWT8″}}}

  • Mike, Loic, & Steve Gillmor are Qik’ing while drinking Stella Artois {seesmic_video:{“url_thumbnail”:{“value”:”http://t.seesmic.com/thumbnail/oWoIyRyioh_th1.jpg”}”title”:{“value”:”Mike, Loic, & Steve Gillmor are Qik’ing while drinking Stella Artois ”}”videoUri”:{“value”:”http://www.seesmic.com/video/S54UbyS1Pk”}}}

  • It’s not a fad, this is REALLY late in the game… http://www.dipity.com/user/xantherus/timeline/Virtual_Worlds

  • Eric, nice… table?

  • Those investors might as well of lit all that money on fire. Pretty much none of these companies will prosper. The don’t provide a real solution to a real problem. Simple entertainment but that only goes so far.

  • But what about Hansel… isn’t he hot right now too?

  • Techcrunch doesn’t have Excel?

  • I prefer activeworlds.com
    I seem it is more simple than others. But I like for this : it remains little more than a game.

  • There is a tonne of money to be made in this field, apparently World of Warcraft is raking in 120 million usd a month, that has to be more than any other sort of entertainment product out there…

  • Internet is something virtual originally , so I think it’s just some problem how we could combine the real and the virtual. After all, we’re not robot.

  • LeWeb is also hot right now. {seesmic_video:{“url_thumbnail”:{“value”:”http://t.seesmic.com/thumbnail/AYlda1b4fL_th1.jpg”}”title”:{“value”:”LeWeb is also hot right now. ”}”videoUri”:{“value”:”http://www.seesmic.com/video/TXaEFprSh2″}}}

  • And don’t forget Sony has Home coming out soon too…

  • Many of these are very similar. We’ve decided to go for a 2D mixed reality approach that we think is unique and also provides a more efficient interface for communication.

  • Crap the what?

    I know the kids love ‘em, but has anyone shown a VW business model that works?

  • will we all finish to have sex virtually lol ??

    Nath
    http://www.themostpowerfulcompany.com

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