Virtual Worlds, Real Potential – Imaginary Numbers?

Comment

On Tuesday night I attended the The Music: Ally Debate Virtual Worlds, Real Potential event on the commercial potential of virtual worlds. Keynote talk was from Justin Bovington, CEO of Rivers Run Red, and panelists were:

Barney Wragg, global head of digital, EMI Music

Daniel Heaf, interactive editor, BBC Radio 1

Roo Reynolds, metaverse evangelist, IBM Labs

Paul Van Gerven, founder, PVG Virtual Concerts

Christian Batist, regional director Europe, Sulake / Habbo Hote

The event was chaired by Toby Lewis, Editorial Director, Music Ally.

Justin gave a talk and demonstration of some of his work on Second Life. I had seen some of this before (see the TechCrunch UK article here for example) but some new factoids emerged.

There are now some 1.7 million 2nd Life users (though I don’t think I’ve ever seen more than about 10,000 online at a time – it wasn’t clear if this was real users or Avatars)

Anshe Chung (the first 2nd Life real life (R/L) millionairess) uses 50 people in China to build habitats (is this sweatshop software?), and over 10,000 people are making real money trading on the site.

He estimates c 900,000 of the 2nd Life users are pure mass market, with very different expectations from the early adopters

It was also interesting to hear some of Justin’s views on future trends, most high impact I think were that:

– Second Life is becoming a media channel – from launch the 2nd Life TV station VirtualLifeTV has had c 475,000 people view it. YouTube videos and music are heavily streamed into 2nd Life.

– The backlash against Big Brands advertising is real, but every time there is anti-brand buzz, more people visit and the sales go up. Brands are also learning the lessons that they have to contribute to 2nd Life to really resonate, since behind every avatar is a person – and these people are some of the most net literate out there and are highly vocal, for good and ill.

– Tax (and contract) implications are still a muddle, he does not see that area being sorted out within 3 years at earliest.

It’s also worth noting some of Christian Batist’s thoughts about Habbo Hotel and Virtual Worlds in general. Habbo is a much less “free form” model, the world is pre-constructed for the Habbos (avatars) to inhabit and they mainly get to furnish their room in the Habbo Hotel as their form of creative expression (like a 3D Profile really). It is significantly bigger than Second Life, with some 7m users, and is mainly aimed at teens. Interesting commonalities between Habbo and 2nd Life are:

– They both find the “newbies” dress up their avatars initially but return closer to the “real person” over time

– Both have business models largely based on a tradeable currency – Linden dollars and Habbo credits – which allow 2nd Life and Habbo to monetize the businesses. Habbo rents rooms and sells hotel furniture, Linden rents land and sells virtual goodies.

– High levels of female participation – near 50% – which is unusual in standard gaming.

– Both have problems if too many people are in a small space, so need to control access at times.

I thought Toby Lewis compered the panel discussion rather well, asking some very sharp questions rather than letting the panel members give prepared talks. I loved his point that these were all just glorified chat rooms – the sound of heresy being spoken ;)

This approach did lead to some very instructive conversations, some I have noted here.

Barney Wragg noted that from an EMI point of view, although much of the material in 2nd life was copied (which was morally and ethically unsound of course – no word of the EMI / Yahoo trial announced that day), the major labels were still looking at how best to use these media as there are interplays between the commercial and promotional value, and this differs by label and artist type. There seems to be considerable latitude for interpretation (aka confusion) as to whether 2nd Life is a common carrier or a content hoster, and if its is covered by WIPO “safe harbour” rules – and if so, under which country’s rules.

Roo Reynolds was put on the spot about the downsides of virtual worlds. Issues with 2nd Life are that it takes time to master, and it is hard to find people in such a vast place until you are plugged into the social network. (Christian Batist noted his real life 2nd Life experience when a huge apartment block was erected between his carefully chosen and constructed habitat and his view of the ocean.). Issues with simpler worlds like Habbo are stickiness – what do you do when you have mastered it?

Hans Timmerman noted that to do a virtual concert performance in 2nd Life it took a similar crew to that in a real concert – even down to the bar staff. He also reflected that it was now much harder for independent music to make an early splash, given the hundreds of thousands of pounds big brands were spending on getting themselves known ( One event mentioned apparently cost c £100k for about 5,000 participants – £ 20 per customer captured)

Daniel Heaf talked a little more about the BBC Radio 1 event, big learning was that it is a global event that runs 24 x 7 and this has to be planned for, as do the details like “virtual bouncers” if you want to have a 2nd Life event of the same quality as a real life event – and you also need to think about what to do with your 2nd Life building once the show is over.

I also caught up with Adam Reuter (Real Life name Adam Pasick) again to get his take on 2nd Life over the last 3 months since we last met. I think he made a good point which is that the world is so vast (apparently you cannot now visit it all in one lifetime) so one could avoid all the commercial hoopla very easily if one wanted to.

In the Q&A sessions there was quite a lot of testing of the numbers – how many people as opposed to Avatars, how many were live and not dormant, how long anyone stayed etc etc – no real conclusions but I suspect the real active user base is quite a bit smaller than the topline numbers. I asked about interim approaches, i.e. something between a Second Life and a Habbo in complexity. That brought the discussion on to the Role Playing “Sword and Sorcery” worlds such as World of Warcraft and RuneScape, which overall still have many more users than either Second Life or Habbo Hotel. I picked up this discussion later with Roo Reynolds, and I have blogged a bit more about my further thoughts on the next evolution of virtual worlds over at our blog at broadstuff.

All in all, a very interesting evening.

More TechCrunch

Tags

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

5 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?