(c) Artesia ltd., 2008

Introduction to virtual worlds

Artesia whitepaper, September 2008

Examples of Second Life avatars

Training of emergency personnel in Fortrerra OLIVE

Business impact of virtual worlds"Public virtual worlds, which are suffering from disillusionment

after their peak of hype in 2007, will in the long term represent an important media channel to support and build broader communities of interest."

-- “Hype Cycle for Emerging Technologies, 2008”, Gartner Research, August 2008

Virtual worlds are computer simulated environments that are inhabited by multiple users in form of customizable avatars (graphical representations), who can interact with the simulated textual or graphical environment and other users. Virtual worlds are often seen just as 3D multiplayer games or chat rooms, but are in fact also an increasingly powerful education and business tool. The sense of immersion and the depth of connection to other virtual world users make them perfect for such diverse activities as training medical, emergency and military personnel, hiring employees, distance learning and world-wide collaboration.

The number of personal and enterprise virtual world users grows daily, with over 300 million users world-wide in 2008. Analytics forecast 2 to five years for mass market adoption and 1 billion users in 2017, and new virtual worlds are constantly being developed.

This whitepaper will introduce you to different types of virtual worlds, provide examples and recommend steps to help you and your company use virtual worlds to improve your external and internal business processes and get in touch with your target users.

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“Within five years, the 3-D Internet will be as important for work as the Web is today. Information and

knowledge management professionals should begin to investigate and experiment with virtual worlds.” *

*Source: Getting Real Work Done In Virtual Worlds, Forrester Research, January 2008

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Club Penguin is a virtual world for kids aged 6 - 14 that has over 700 000 paying subscribers and was bought

by Disney for 700 million USD

Google Lively

Club Penguin

Virtual worlds types

Virtual world developers combine a variety of tools and approaches to create engaging virtual environments. For example, all virtual worlds allow users to communicate with each other (usually through text, but voice is becoming common too) and users can usually present themselves through profiles that often feature information about a user’s reputation within the virtual world.

However, not all virtual worlds enable players to own and manage their own virtual land, although many include virtual goods that players can buy or sell with an in-world virtual currency. A few worlds allow users to create their own content, while most focus on providing a limited set of professionally developed content for users to consume. Another distinction among virtual world is that they can be modeled to resemble the real world or made to look like imaginary non-existing worlds.

Therefore it is no surprise that there are many different types of virtual worlds on the market that serve a different purpose and are made to appeal to different types of users. These are some of the basic types of virtual worlds based on their main purpose:

• Social virtual worlds focus on enabling conversation among users and are often compared to 3D chatroooms. They often include virtual goods that users can buy, and some enable users to create and customize their own virtual rooms or spaces. Examples: Kaneva, There, Lively, Vivaty, IMVU.

• Casual gaming virtual worlds are very similar to social virtual worlds with the difference that they also focus on users playing smaller, casual games within the virtual world. Examples: Club Penguin, Habbo, Neopets, Dizzyworld.

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World of Warcraft

Creating content in Second Life

vSide

Twinity

• Role-playing virtual worlds or MMORPGs (Massively multiplayer online role-playing games) encourage players to assume a role in a themed world and progress through the game by competing with or against other players in a variety of quests in the fictional environment. MMORPGs also include some sort of in-game culture and provide different tools for players’ social interaction and even team work. MMORPGs often have a living economy that is based on virtual goods that can be bought and sold with an in-game currency. Examples: World of Warcarft, Age of Conan (fantasy themed); EVE Online, Ultima Online (science fiction themed); Gaia Online.

• Virtual worlds for content creation enable users to create their own content and in some cases also sell it to other users. Due to the user generated content, these worlds can be used for a variety of purposes - from chat and gaming to education and even business. Examples: Second Life, HiPiHi.

• Educational virtual worlds aim to educate their users about a certain topic. Most often these worlds are targeted at children and offer similar features as the casual gaming virtual worlds. Examples: Whyville, Handipoints HandiLand, MinyanLand.

• Interest focused virtual worlds are focused around users’ real world interests, such as sports, fashion, music etc.. Examples: vSide, Stardoll.

• Branded virtual worlds are created around a certain real life brand and can include elements of other types of virtual worlds. Some branded virtual worlds require or encourage users to purchase a real world product to be able to enter the branded virtual world. Examples: vMTV, Webkinz, Barbie Girls.

• Mirror worlds are built to mirror the real world. They can be used as 3D maps or to promote tourism. Examples: Unype, Twinity, Amazing Worlds.

• Virtual worlds platforms are software frameworks that enable users to create their own virtual worlds. Some (mainly open-source) platforms even enable users to host virtual worlds on their own servers. Examples: Active Words, Croquet, Multiverse, Project Darkstar, OLIVE, WebFlock, Metaplace, OpenSim.

Habbo - a virtual world for teenagers that works in a browser

Second Life - users must be over 18 and download the Second Life client

The OpenSimulator project can be used to create and host a Second Life like enviornment on your own servers

Other virtual world distinctionsVirtual worlds also have different revenue models. Some virtual worlds require users to pay a subscription (e.g. World of Warcraft), while others are free to play and make revenue by selling virtual currency that can be used to buy virtual goods (e.g. Habbo), by selling virtual land (e.g. Second Life) or any other premium virtual services.

We can also classify virtual worlds by the age of their users. An increasing number of virtual worlds are targeted at children (examples: Club Penguin, Whyville), and many social worlds are made for teenagers (examples: Habbo, There, Kaneva, vSide). There are also virtual worlds that appeal more to an adult audience or might even have age limits (for example, Second Life users must be over 18, the average age is 33).

We should also keep in mind that virtual worlds have different technological requirements. Some virtual worlds that do not have full 3D graphics can be accessed through a standard web browser by installing a plugin (a lot of virtual worlds use the popular Flash plugin), while fully 3D virtual worlds usually require better computer hardware and the installation of a standalone software client (application). Most advanced virtual worlds also require a broadband internet connection on the user’s side.

Intellectual property rights are not treated equally, either. Second Life is the only major virtual world that explicitly states that content creators keep the IP rights to their content; in the rest, all content belongs to the virtual world creators.

The final distinction is the hosting. Currently, most virtual worlds are hosted on servers that are owned by private companies, which poses some questions regarding data confidentiality. However, there are already some (usually open source) virtual world platforms that allow companies and users to host their own servers (even behind the firewall). Examples: ActiveWorlds, OpenSim.

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Sony Home

Showtime organizes regular events for fans of The L Word in Second Life

Luxembourg job fair

External business opportunities: connect with others

The level of immersion and the possibility of forging deep relationships enable companies to successfully use virtual worlds to connect with their users, customers and business partners. Virtual worlds can be used in:

• Sales and marketing: Virtual worlds enable promotion of sales of real life products and services, creation of virtual world versions of real life products and services or even of branded virtual worlds. Also, promotional virtual events can be organized or sponsored within virtual worlds. For example, users of Sony Playstation 3 Home will be able to dress their avatars in Nike, Puma and other branded virtual clothes.

• External relations: Virtual worlds provide new places where companies can interact with their users in a more effective way and expand their business network by connecting with new and existing business partners. They can be used to provide support, foster better relationships, and build communities. For example, Showtime’s hit TV series The L Words has a thriving fan community in Second Life.

• Recruiting: Virtual worlds attract many highly skilled workers from different fields. Companies can use the virtual world to connect with potential employees, and conduct virtual job interviews or collect resumes to select the most promising candidates. For example, Cisco organized a Virtual Career Fair in Second Life for engineers interested in working for Cisco’s real world partners, and Luxembourg’s Virtual job fair in November of 2007 drew 800 candidates from 45 nations.

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"There have been some folks who questioned why we would choose to participate in Second Life and I always go back to this; before Cisco had presence in Second Life a

Cisco User Group existed...so the ‘go where your audience is’ adage seems to ring true."

- Dannette Veale on the Cisco Virtual Worlds blog

A meeting in Forterra OLIVE

A conference in Second Life

SkyTran prototype in Second Life

Internal business opportunities: connect your employees

Virtual worlds can also be successfully used internally in:

• Meetings, collaboration and remote work: Virtual worlds provide a col laborat ive immers ive environment that can be used to host meetings and enable remote workers to keep in touch. Using virtual worlds for meetings can be more cost-effective than videoconferencing systems, can save traveling costs and also provide an engaging environment for informal social interactions within the company. For example, IBM uses ActiveWorlds as an internal virtual world for collaboration and also holds informal and formal meetings in Second Life.

• Education and training: Virtual worlds can also be used for highly realistic and cost-effective training. Employees can also benefit by attending virtual conferences that are less time and money consuming than real ones, but still provide the benefits of informal interaction and networking. For example, Language Lab is a company that offers immersive language classes in Second Life.

• Research and development: Virtual worlds can provide a cost effective way for product prototyping, testing and development. For example, Unimodal has improved prototypes of SkyTran (a public personal train transport system) by building and testing a virtual model in Second Life.

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“(Virtual worlds are important) because they provide a level of human interaction and experience that is

increasing important in this disconnected world we live in; plus they provide a platform for enhanced learning

and collaboration.” - Zain Naboulsi, Microsoft

Four steps to a virtual world strategySo how should your company get started with virtual worlds?

Identify the most important business opportunity in virtual worlds for your company. What goals can they help you achieve? Are you a large multinational company that can cut down travel costs by collaborating and meeting in a virtual world? Do you want to reach your consumers that are already using virtual worlds? Think about what virtual worlds can do for you, and what value you can offer to virtual worlds users.

Identify the right virtual world(s) for you. Consider your target audience and your needs. Do you want to reach your business partners or your end consumers? What kind of environment do you need to reach your goals?

Find the right people in your company to get involved. Maybe some of your employees are already using virtual worlds and they can help you get started. Or maybe you can find employees that are willing to learn and explore this new area. If you can’t find the right people inside your company, consider hiring some outside help to help you focus your efforts.

Do something! The important thing is to get a feeling for virtual worlds - start thinking about where your company could fit in. Start by exploring virtual worlds or set up a small presence. There is no need to invest big money in your own Second Life island; you can start by joining a dedicated business environment like the B2P business park, get to know other enterprise participants of virtual worlds and exchange experiences. Once you get familiar with a virtual world, you can start thinking about bigger projects.

Contact us for more information about using virtual worlds!

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About ArtesiaArtesia is a start-up company, focusing on the enterprise use of social media, user communities and virtual worlds. We firmly believe that in the inter-connected business world of today and tomorrow, the successful companies will be the ones that will use the evolving social media and virtual world technologies to improve dialogue and add value to their customers, business partners and employees.

Artesia is present in virtual worlds since the early 2007. Our projects include helping Slovenia’s public broadcaster establish a Second Life presence and build a community, helping with new user orientation, organization of dozens of virtual events and management of virtual counterparts of academic conferences. We have forged strong ties with some of the premier virtual world content, knowledge and service providers including Beta technologies, B2P business park, and Metanomics.

Making sense of the jungle of social technologies can be hard. Our Artesia SocialMatch™ methodology helps our clients define potential value for the users and the company - which parts of the business processes to enhance using social tools, define the best tools for the project based on target users’ social profiles, develop the custom software, if needed, train the company employees in the usage of the new tools and help them in the crucial first months of the project. We were invited to present the SocialMatch™ methodology at the Mindtrek 2008 conference in Finland.

Our consulting services are completely adaptable to your needs - we have worked on projects ranging from a few brainstorming sessions and a recommendation document to year-long engagements with development of custom software. We’d be glad to help your company, too.

Jan Isakovic, CEO:

jan@artesia.si, LinkedIn Profile, Skype: artesia-jan, SL: IYan Writer

Alja Sulcic, platform expert:

alja@artesia.si, LinkedIn profile, Skype: alja-skype, SL iAlja Writer

Artesia ltd., Iztokova 16, 1215 Medvode, Slovenia, office: +386 590 64-063

Visit our office in Second Life:http://slurl.com/secondlife/Beta%20Technologies/213/148/29

Other Artesia Whitepapers:

Business use of online communities

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Artesia SocialMatch™ is a trademark of Artesia ltd. All other trademarks and trade names are properties of their respective owners.