July 2008Jessica Mulligan1 Virtual Worlds A Brief Tutorial Presenter: Jessica Mulligan [email protected] [email protected]

July 2008July 2008 Jessica MulliganJessica Mulligan 11

Virtual Worlds

A Brief Tutorial

Presenter: Jessica Mulligan

[email protected]@gmail.com


TODAY’S AGENDATODAY’S AGENDA

DefinitionsDefinitions

Some HistorySome History

Numbers and TrendsNumbers and Trends

Q&AQ&A


WHO AM I?WHO AM I? EXPERIENCE:EXPERIENCE:

22 years in Online Entertainment22 years in Online Entertainment 50+ online products, 12+ MMOs50+ online products, 12+ MMOs

CURRENT POSITION:CURRENT POSITION: COO, ImaginVenture SACOO, ImaginVenture SA

AUTHOR and COLUMNISTAUTHOR and COLUMNIST Developing Online Games: An Insider’s GuideDeveloping Online Games: An Insider’s Guide

co-authored co-authored wwith Bridgette Patrovskyith Bridgette Patrovsky

A Royal PITAA Royal PITA



Virtual World (VW)Virtual World (VW)

A computer-based simulated A computer-based simulated environment intended for its users environment intended for its users to inhabit and interact via avatars.to inhabit and interact via avatars.


Second LifeSecond Life



VWs normally have the following:VWs normally have the following:

Persistent Environment: Persistent Environment: The terrain and objects are the The terrain and objects are the same for all viewers.same for all viewers.

Persistent Effects: Persistent Effects: When one person changes When one person changes something, others perceive the change.something, others perceive the change.

Persistent Avatars: Persistent Avatars: Avatars can have their data changed Avatars can have their data changed and reflected throughout the world. Example: Inventory and reflected throughout the world. Example: Inventory items, skills, attributes.items, skills, attributes.



Types of VWsTypes of VWs

Social World: Social World: The main purpose is the social interaction The main purpose is the social interaction of the inhabitants.of the inhabitants. EXAMPLE: Habbo Hotel, Second Life, Club PenguinEXAMPLE: Habbo Hotel, Second Life, Club Penguin

Game World: Game World: The main purpose is to experience and The main purpose is to experience and advance within the context of the game rules.advance within the context of the game rules. EXAMPLES: Runescape, World of WarcraftEXAMPLES: Runescape, World of Warcraft



Types of VWsTypes of VWs

Workspace World: Workspace World: Used for internal corporate, Used for internal corporate, government or NGO communications, meetings and government or NGO communications, meetings and collaboration.collaboration.

EXAMPLE: Sun’s MPK20, IBM’s Bluegrass ProjectEXAMPLE: Sun’s MPK20, IBM’s Bluegrass Project



The Park AnalogyThe Park Analogy

Social World: Social World: The Neighborhood ParkThe Neighborhood Park

Game World: Game World: A Theme Park A Theme Park

Workspace World:Workspace World: An Industrial Park An Industrial Park



AVATAR: AVATAR: The representation of the players in the virtual The representation of the players in the virtual world.world.

MMOG: MMOG: Massively-Multiplayer Online GameMassively-Multiplayer Online Game

MMORPG: MMORPG: Massively-Multiplayer Online Role-Playing Massively-Multiplayer Online Role-Playing GameGame


Some HistorySome History


Generation I:Generation I:1969-19781969-1978

Connecting more than Connecting more than 2 people to play 2 people to play simultaneouslysimultaneously

Proprietary networksProprietary networks PLATO PLATO NovaStarNovaStar

Mainframes used to Mainframes used to play simple text play simple text gamesgames Original EmpireOriginal Empire


1978:1978:The Universe ChangesThe Universe Changes

Professor Roy Trubshaw at Essex University asks Professor Roy Trubshaw at Essex University asks his students a question:his students a question:

““Can we use UNIX to create many-user Can we use UNIX to create many-user programs?”programs?”

The answer:The answer:


Generation II:Generation II: 1978 to 1995 1978 to 1995

The Multi-User Dimension, a.k.a.The Multi-User Dimension, a.k.a.

MUD IMUD I


Generation II:Generation II:1978 to 19951978 to 1995

The Trubshaw/Bartle text MUD kicked off the online The Trubshaw/Bartle text MUD kicked off the online VW revolutionVW revolution

First game world to allow more than 100 simultaneous First game world to allow more than 100 simultaneous playersplayers

The source was distributed to other schools and, The source was distributed to other schools and, eventually, was used to build Internet MUDseventually, was used to build Internet MUDs

Trained a generation of online designersTrained a generation of online designers


Generation IIGeneration II Over 20 Major VWsOver 20 Major VWs

1978: MUD I1978: MUD I 1982: MegaWars I1982: MegaWars I 1984: Islands of Kesmai1984: Islands of Kesmai 1986: Air Warrior1986: Air Warrior 1986: Habitat1986: Habitat 1991: AD&D NeverWinter 1991: AD&D NeverWinter

Nights (AOL)Nights (AOL) 1993: Multiplayer BattleTech1993: Multiplayer BattleTech

Air Warrior by Kesmai, 1987

The Realm by Sierra Online, 1995

Multiplayer BattleTech, 1992AD&D: NWN on AOL, 1991


Generation III:Generation III:1996-Present1996-Present

The Internet & flat-The Internet & flat-rate fees take over.rate fees take over.

Meridian 59 becomes Meridian 59 becomes 1st Internet-capable 1st Internet-capable VW at a flat-rate, VW at a flat-rate, kicking off this kicking off this generation.generation.

Ultima Online by EA, 1997

Meridian 59 by 3DO, 1996


Generation III:Generation III:1996-Present1996-Present

Online in Asia is Online in Asia is BIG by 2001BIG by 2001

60 million players!60 million players!CHINA: Fantasy Westward Journey by

Netease, 2004

1 million simultaneous players!

KOREA: Lineage by NCsoft, 1999


Generation IIIGeneration III

Over 100 VWs launched so farOver 100 VWs launched so far 1996: M59, AD&D Dark Sun 1996: M59, AD&D Dark Sun 1997: Ultima Online1997: Ultima Online 1999: EverQuest, Runescape1999: EverQuest, Runescape 2000: Habbo Hotel2000: Habbo Hotel 2003: Second Life, There.com2003: Second Life, There.com 2004: World of Warcraft2004: World of Warcraft

Habbo Hotel, 2001

World of Warcraft by Blizzard, 2004

Runescape, 1999


NumbersNumbers

AndAnd

TrendsTrends


The Current VW UserThe Current VW User


The VW UserThe VW User

Hard CoreHard Core: No time or price sensitivity: No time or price sensitivity

ModerateModerate: No price sensitivity, lots of time : No price sensitivity, lots of time sensitivitysensitivity

CasualCasual: Both price and time sensitive: Both price and time sensitive



0

1

2

3

4

5

6

7

8

9

10

Mass Moderate Hardcore

Player Time & Price Sensitivity

Time Price



Movement Movement downdown the pyramid is easy the pyramid is easyThe Hard Core player will try all types of gamesThe Hard Core player will try all types of gamesThe Moderate gamer The Moderate gamer wantswants to find a good MMO, to find a good MMO,

but is comfortable with Casual gamesbut is comfortable with Casual games

Movement Movement upup the pyramid is hard the pyramid is hardThe Casual player is price and time sensitiveThe Casual player is price and time sensitiveThe Moderate player is time sensitiveThe Moderate player is time sensitive


MarketsMarkets

Kids (Age 5-17): Kids (Age 5-17): A combination of Social and Game A combination of Social and Game WorldsWorlds Habbo Hotel Club Penguin Runescape

Adults (Age 18 to 42): Adults (Age 18 to 42): Mainly Game WorldsMainly Game Worlds World of WarcraftWorld of Warcraft Eve OnlineEve Online Age of ConanAge of Conan


MarketsMarkets

Workplace: Workplace: 33rdrd Parties building corporate, government Parties building corporate, government and NGO VW spacesand NGO VW spaces Rivers Run Red Millions of Us

Research and Education: Research and Education: The short end of the stickThe short end of the stick Few of themFew of them Needs to be more support hereNeeds to be more support here


Virtual Worlds TodayVirtual Worlds Today

WoW, Blizzard/US – 10.5m subscribersWoW, Blizzard/US – 10.5m subscribers Habbo Hotel, Sulake/Finland – 9.5 million Habbo Hotel, Sulake/Finland – 9.5 million

Unique/ActiveUnique/Active Runescape by Jagex/UK – 6m ActiveRunescape by Jagex/UK – 6m Active Club Penguin, Disney – 1m activeClub Penguin, Disney – 1m active Age of Conan, Funcom/Norway – 700k subscribersAge of Conan, Funcom/Norway – 700k subscribers Second Life, Linden/US – 500k+/- activeSecond Life, Linden/US – 500k+/- active EverQuest II, Sony/US – 400k subscribersEverQuest II, Sony/US – 400k subscribers Eve Online, CCP/Iceland – 250k subscribersEve Online, CCP/Iceland – 250k subscribers






BehaviorBehavior

Complex Simple

Hardcore

Casual


Club PenguinClub Penguin


Second LifeSecond Life


There.comThere.com


Habbo HotelHabbo Hotel


World of WarcraftWorld of Warcraft


Business ModelsBusiness Models

Monthly SubscriptionsMonthly Subscriptions

Free-to-Play (FTP) with Adverts/Upgrade Free-to-Play (FTP) with Adverts/Upgrade to Monthly Subsc.to Monthly Subsc.

FTP w/adverts and Virtual Item SalesFTP w/adverts and Virtual Item Sales


The TrendsThe Trends

Revenue continues to be from Game WorldsRevenue continues to be from Game Worlds

More movement to free-to-playMore movement to free-to-play Supported by adverts, virtual item sales and an up-sell to premium Supported by adverts, virtual item sales and an up-sell to premium

statusstatus

More Browser-based productsMore Browser-based products

Social Worlds at critical growth stageSocial Worlds at critical growth stage Millions use themMillions use them The revenue model is still fragileThe revenue model is still fragile


Which Governments are Which Governments are Investing in VWs?Investing in VWs?

China: $2 billion USD commitmentChina: $2 billion USD commitment Equivalent to $14B USD for local COLEquivalent to $14B USD for local COL UniversitiesUniversities Private CompaniesPrivate Companies Government R&D CentersGovernment R&D Centers

South Korea: About $1B USD so farSouth Korea: About $1B USD so far Subsidies for VW developersSubsidies for VW developers Tax BreaksTax Breaks Middleware InitiativeMiddleware Initiative Paid to bring fiber to 70%+ of homesPaid to bring fiber to 70%+ of homes

CanadaCanada Provinces setting good tax incentivesProvinces setting good tax incentives


SummarySummary

Virtual Worlds are mainly Social Worlds, Game Virtual Worlds are mainly Social Worlds, Game Worlds and Workspace Worlds.Worlds and Workspace Worlds.

Game Worlds are the revenue leaders todayGame Worlds are the revenue leaders today

Social Worlds are Social Worlds are potentiallypotentially the revenue the revenue leader in the futureleader in the future

The business model is trending to Free To The business model is trending to Free To Play/UsePlay/Use


SummarySummary

Free To Play/Use is supported by various Free To Play/Use is supported by various revenue, including Adverts, Virtual Item Sales revenue, including Adverts, Virtual Item Sales and up-sells to subscriptionsand up-sells to subscriptions

The West is not investing adequately in The West is not investing adequately in Education and R&DEducation and R&D

China and Korea want to own VWs, so are China and Korea want to own VWs, so are investing billions in education and R&Dinvesting billions in education and R&D


Thank you for listening!Thank you for listening!

Question and AnswerQuestion and Answer

PeriodPeriod

Documents

July 2008Jessica Mulligan1 Virtual Worlds A Brief Tutorial Presenter: Jessica Mulligan [email protected] [email protected]