Gartner Says 50 Million in Virtual Worlds by 2011

Posted on May 31, 2007

Gartner is predicting that by 2011 80% of Internet users will have a "second life" or a presence in a virtual world. A GigaOm article puts the figure in the 50-60 million range. The press release also lists these five laws for companies trying to participate in the virtual world..

First Law: Virtual worlds are not games, but neither are they a parallel universe (yet). The initial reaction of many business leaders when faced with virtual worlds is to dismiss them as a mere "game" of no benefit to the enterprise and something to be banned for wasting compute resources and time. Many of those that see beyond the gaming elements immediately veer toward questions such as "How do we exploit this as a sales channel?" This reaction is equally incorrect and potentially even more damaging to the enterprise. "Growth in virtual worlds is significant but lower than it appears; the overall population of non-game virtual worlds is still small compared to massively multi-user online games (MMOGs) and the totality of community-oriented and niche-targeted environments," Mr. Prentice said.

Second Law: Behind every avatar is a real person. Gartner said people can't be fooled by the fantasy elements in the virtual world. There are unwritten rules and expectations for behavior and culture are developing. Enterprise users must consider their corporate reputations.

Third Law: Be relevant and add value. Many commercial companies have established a virtual world presence, but none have converted it into an effective, profitable sales channel. There has been criticism of early corporate entries into the virtual world, Second Life, related to the showrooms usually being empty and lacking atmosphere. While there have been a limited number of individuals who have earned more than $5,000 per year from their virtual world businesses, most corporations will see minimal revenue gains in the market at this time. "Do not expect to undertake profitable commercial activities inside most virtual worlds in the next three years," Mr. Prentice said.

Fourth Law: Understand and contain the downside. Enterprises face serious questions, such as "Could activities in the virtual world undermine or influence my organization/brand in the real world?" With significant portions of the virtual economy based on adult oriented activities, questions of appropriate behavior and ethics also arrive. In-world behavior can be a problem in public areas; annoying interruptions can range from unintentional arrivals and erratic behavior from new residents whose avatar control is still suspect to misdemeanors such as graffiti, to more-concerted protest activities designed to disrupt.

Fifth Law: This is a long haul. Today's multiplicity of virtual environments has developed through the convergence of social networking, simulation and online gaming. There are many new entrants, whose stability and scalability are not yet established. There is significant probability that, over time, market pressures will lead to a merging of current virtual worlds into a smaller number of open-sourced environments that support the free transfer of assets and avatars from one to another with the use of a single, universal client.

So there is not much profitability there yet for businesses but it is important for corporations to start building a presence in some of these virtual worlds because they could become a serious profit sources down the road. The second law mentioned by Gartner "behind every avatar is a real person" may turn out to be incorrect. Complex programming may make for some very realistic non-player characters in these virtual worlds that people may enjoy interacting with as long as they are not being misled into thinking it is a human. These is something very significant going in the virtual kingdom and new computing technologies like Microsoft's surface computing could make them even more exciting and significant.