A Virtual Worlds Primer

Introduction

This section of the Virtual Worlds Primer provides an overview  – what virtual worlds are, what they are used for and who uses them.

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Primer: What are virtual worlds?

Everyone who talks about virtual worlds seems to mean something different by the term, so we’ll start out this Primer by outlining what we mean by the term. We’ll also lay out the taxonomic system we use when making distinctions between the different kinds of virtual worlds.

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Primer: Who Uses Virtual Worlds?

Virtual worlds are used by people from every demographic around the globe. Game worlds are generally more popular than social worlds and have become a thriving part of the culture in some East Asian countries like South Korea. User demographics in specific virtual worlds can vary widely, but there are a few marked trends. This section features a summary of information expanded on further in the Statistics section of this Virtual Worlds Primer.

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Primer: What types of virtual world are there?

For clarity and the sake of comparison, our Primer splits virtual worlds into three types: game, social and tools. This section looks in detail at each of these types of virtual world.

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Primer: Publisher’s Business Models

Revenues of virtual world publishers range from the negative, for hobbyist worlds, to the hundreds of millions of USD per annum. For example Korea’s Nexon reported  2005 revenues of $230 million (primarily generated from micro-transactions). This section of tVPN’s Virtual World Primer gives an overview of the various business model approaches publishers use.

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Primer: Virtual World User Business Models

This section of the Virtual Worlds Primer takes a look at the emergent economy connecting virtual world to physical world currencies. Often this economy is generated by the two extremes of user types – those who are cash poor but time rich, and those who are time poor but cash rich. Add to this the fact that many elements of virtual worlds require a great deal of time to achieve, then the emergence of an economy becomes almost inevitable.

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Primer: Amateur-to-Amateur Business Models

Virtual worlds act as catalysts for so-called “gift economies” – that is, structures where creators give things to individuals or the community for no direct, or even sometimes indirect, reward. Such structures, also known as Amateur-to-Amateur (A2A), can be very similar and indeed an extension of the OpenSource community model.  This section of the Primer identifies the specific ways these gift economies emerge in virtual worlds.

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Primer: Statistics: Lies, Damn Lies & Registered Users

There are no broadly agreed upon metrics for virtual world use. Nor are there any recognized independent bodies that audit figures as is common in industries such as publishing. What’s more, the range of business models (other posts in this Primer go into detail about these business models) used by virtual worlds means it is not possible to compare some figures against others. This causes wide confusion both for advertisers and policy-makers as it is unclear how many people are actively using virtual worlds, hence what their impacts are.

This Primer section seeks to clarify the terms used and outline the methods for approximate comparisons.

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Primer: What The Future Holds

This Primer can’t encompass every bit of wild speculation about the future of virtual worlds, but we’ll lay out the trends that have moment.

One thing about the future of virtual worlds seems certain: The number of people using virtual worlds will continue expanding. Today we see that as one virtual world closes, another seems to take its place, setting new benchmarks in terms of size and revenue. And if we compare virtual worlds with social networking sites – as they have many fundamentals in common – it looks as if we will see yet more expansion in their adoption.

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To download the Primer as a .pdf click here.