Virtual Worlds Get A Dose Of Reality At Engage
Posted by meredith on 03-12-2009
Yesterday I stopped by the second half of the Engage! Expo conference here in New York at the Javits Center. With the industry quickly approaching its saturation point (more than 200 worlds and counting) and the major front-runners firmly in place, the challenge for newer, smaller worlds to stand out has never been more formidable. Even for worlds currently in the middle of the road, with a major pullback expected from advertisers this year, there is a considerable degree of uncertainty, which was reflected by the sober tone of the event.
It wasn't surprising then that the first panel I attended, "Tap Into Emotional Triggers of Tweens," focused on those who have already nailed down their formula. Sally Schmidt of Circle 1 Network laid out the five worlds with the deepest engagement (based on cross-referencing the list of top 150 tween worlds with various metrics including repeat visitors) as Club Penguin, Neopets, Stardoll, Cartoon Doll Emporium and Zwinktopia (WebKinz didn't qualify). She then broke down the five key strategic points into the 5 Cs: Creativity (dressing up avatars, decorating homes, designing clothes), Collection (free goods, paid goods, points), Caring (feeding a virtual pet, charity), Community (chat, events, message boards), and last but not least Competition (levels, comparing points wit other players). Her conclusion was that each of the big sites encompass all five key points, but only strongly emphasize a few. For instance, on Stardoll the draw is obviously in the creativity of designing your own clothes and styling your avatar. On Neopets, your role as pet owner promotes caring.
The question this raised for me, and which seemed to be echoed in the murmurings of the crowd was how do you cover this territory then without appearing to be a knock-off of one of the heavy hitters? How does one world's combination of Cs differentiate it from the next? Are there new triggers that have yet to be explored? Or, will different online spaces just have to converge in order to both become more complex formulas as with Stardoll's recent takeover of the teen social site Piczo. The merger added an extra dose of Community and also expanded the mainly tween site's demo to incorporate older teens as well. Not to mention the economic reasons behind the move.
And clearly, as is universally the case these days, economical strategies are in high demand for virtual worlds. With advertisers' scaling back, more sites have concentrated their efforts on monetizing worlds through microtransactions of virtual goods and subscriptions. But when it comes to younger players who often don't have a credit card, this process can become complicated.
In a presentation by Rixty not coincidentally a company that provides alternative online payment options for teens and young adults, the situation was laid out simply. Currently, there are 25.6 million teens between the ages of 12 and 17 and teen spending, as we know, is a billion dollar industry. However, the majority of teens do not having access to a credit card or a bank account (less than 50% of teens have savings accounts, while less than 13% have checking accounts). While parents explanation for this trend was predictable — the idea of handing kids"free money" in the form of a debit or credit card made them nervous — I found teens' aversion to credit cards — with 72% saying "I don't want to be in debt" — an interesting reflection of the times.
Ideally, what teens wanted, according to the surveys conducted by Rixty, was to have the same independence online that they had in real life: when your parents hand you twenty bucks, and you can spend it as you see fit. This, of course, was where the sales pitch came in.
On the one hand I see their point, and by extension teens' point of how frustrating it must be to ask permission when you've reached an age where you feel you've proven yourself worthy of making unsupervised purchases. But then I think that there is a big difference online with the blinder between customer and seller. The online seller can't see how old the tween or teen purchaser is, and we already know that kids lie about their ages online so they could use these cards to purchase stuff their parents might not be happy about. I was also informed by another attendee that these prepaid cards can end up being expensive for the sites that provide them.
And yet, with a few tweaks and a smaller price tag I think this alternative model for teen spending in the online world makes a lot of sense. As does the idea to offer one. With the way things are going my feeling is that it will be these service-providing, problem-solving companies that work across different virtual worlds such as Rixty, that will be the next wave of virtual worlds enterprise.
But I'm curious to hear what Ypulse readers think. Or if anyone gleaned any additional insights from Engage that they'd like to share. Feel free to leave both in comments.
Categorized under: Web
March 13th, 2009 at 9:02 am
As to not "copying" other players…
Cube3– C3 -creativity, community, and commerce
Ss in Starbase C3:) the virtual worlds mantra for us since 1996.
If anyone is interested in how we solve things today, 13 years after we figure out the 3 or 5? C's of virtual worlds..
drop us an email
:)
March 13th, 2009 at 1:04 pm
I was at Engage Expo as and had some similar questions about the 5 "C" and about the sober mood.
I for example would add various "C's" that I think are what is going to take the virtual world space through to its next [or second] big wave.
The 6th "C" that is missing, for example, is "C"ultural, as in more than one [and not simply skin color] in order to be relevant today. Not to be confused with "community" either.
One-size-fits-all is not going to cut it anymore. Just look at Nickelodeon and Mattel fumbling over themselves trying to crank out a Tween Dora and you will see what I mean [but that's another story].
The 7th "C" that I fel was missing is "C"ontent, as in a narrative, a story that guides the virtual world but goes beyond it, allowing the producer or publisher to monetize the brand via other media platforms like animation, or books, or comics, or music.
You need something more than just social and casual gaming if you are going to sustain a brand. How far can Disney take a Penguin, for example, before there are diminishing returns on their investment.
The 8th "C" that is missing is "C"haracters that enrich the narrative and the player as role models to Tweens [in our case Tween girls] playing on these sites and interacting with what right now are often valueless and have few redeeming qualities.
These are real emotional triggers. This is what we will see happen to the virtual world and moreso the media environment as the technology becomes more commoditized [virtual world platforms, for example] and story tellers begin to add creativity to the medium beyond the technology.
As for the assertion that virtual worlds may be reaching a saturation point, I would state it as more; the first wave of virtual worlds is saturated.
I think that [World of War excluded], the second and more sustainable narrative-based wave of virtual worlds has just begun.
Lastly, as regards the lack of certainty that some at the show felt, I think that the $30+ million of investments into virtual worlds that were announced yesterday in GigaOm and NYTimes are probably a better measure of certainty in this sector.
Thanks and… Be Hip!
Laz Fuentes,
CEO
http://www.hipchicas.com
March 13th, 2009 at 2:52 pm
the problem with vitual reality sites such as neopets and club penguin is they lack a economy, scince you get points not items (that are of any use) is a draw back. as for club penguin, theres not much to do once you've got everything, it dosn't set goals and for most players witch wont pay to play its a waste of time.
March 20th, 2009 at 6:26 am
[...] Virtual Worlds Get A Dose Of Reality At Engage by Meredith at the indispensable Ypulse. Includes a recap of "the 5 Cs" of VWs for youth: Creativity, Collection, Caring, Community and Competition. [...]
March 22nd, 2009 at 10:15 pm
"the idea of handing kids"free money" in the form of a debit or credit card made them nervous — I found teens' aversion to credit cards — with 72% saying "I don't want to be in debt" — an interesting reflection of the times."
what a difference a year( and a depression) makes. There may be some hope for virtual worlds if we build them in a 1939, not 1969 style.
A few did suggest this "mode of thinking" over 3 years ago too many of the vr world speakers at these shows who are now out of work;) or firing half there staffs after the last 2 years hyperbole.
If the companies getting invested in to build vr worlds wont/cant offer real value to their viewsers, its good to hear that the viewsers may demand it themselves.
Credit being rejected by teens, who in 2007 would have thunk it:)
April 23rd, 2009 at 6:50 am
[...] Schmidt laid out what it takes to make virtual worlds successful – the 5 Cs. She then broke down the five key strategic points into the 5 Cs: Creativity (dressing [...]
June 23rd, 2009 at 7:26 am
[...] what it takes to make a virtual world successful – Sally Schmidt of Circle 1 Network laid it out at the recent Engage! Expo. And with that virtual worlds loses some of the excitement and enthusiasm which sprung forth after [...]