Virtual Worlds

GP Bullhound have released a research note (pdf) on Virtual Worlds.

The key findings are:

  • Experts predicting that 80% of internet users will become members of virtual worlds by 2011.
  • Virtual Worlds increasingly segmented by demographics and hobbies.
  • In 2007, 24% of US child and teen internet users will visit virtual worlds. By 2011, an estimated 53% will do so.
  • Multiple revenue streams are emerging in the virtual world space. The main business models identified are:
    • The sale of virtual goods.
      • It is key for virtual worlds to have multiple payment methods ranging from credit cards, to Paypal or SMS in order to be able to process micro payments efficiently and to allow users to pay conveniently.
    • Subscription and premium subscription.
    • In-world advertising and product licensing.
      • In June 2007, Parks Associates estimated that US$15m was spent on virtual world advertising in the US in 2006 and projected that it would rise tenfold to US$150m in 2012.
  • Given the competitive environment the virtual worlds operate in, they forecast that subscriptions and premium subscriptions for virtual worlds will decrease in prominence by 2010.
  • Virtual worlds will instead benefit from the growth of advertising and the purchase of virtual goods.

You can download the full research note (pdf) from their website.

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