Oct. 11, 2007 Virtual Worlds 3

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On October 10th and 11th 2007 in San Jose, SDForum participated in the Virtual Worlds 2007 Conference and Expo. Here is my take on what I saw at this event.Virtual Worlds Grow Up

For two days VR business and academia experts from around the world gathered to meet in person. VR has made great progress over the years but it seems to be where personal computers were in the 1970s. It required dedicated hobbyists to spend lots of time and money to learn and use the technology. VR seemed to be in a state of adolescence with younger users spending more and more time “in world” and less time watching traditional media or even browsing the Internet.

Just as video games drove early PC development, entertainment drives VR. Television producer Anthony Zuiker of CBS-TV’s CSI is encouraging viewers to go into Second Life and solve a mystery. Disney’s Paul Yanover explained his company’s history in creating virtual experiences for the whole family. Turner Broadcasting’s Blake Lewin wants to leverage his company’s huge library of content available to VR. Matt Bostwick of MTV Music Group wants to go beyond music videos.

Virtual Worlds At Work

VR is growing up and going to work with the entrance of larger players like IBM, which has its own presence in Second Life and large booth at the Expo. Cisco’s Christian Renaud gave a keynote speech on how they will be benefit from all the bandwidth VR will require. Microsoft’s Stephen Lawler demonstrated Virtual Earth with a detailed tour of San Jose that left many dizzy and impressed.

Beyond the big names are the rising fortunes of companies like Electric Sheep that had its own flock of fans. Linden Lab’s Second Life was everywhere at the show. Reuben Steiger showed hundreds of us how to advertise to Millions of Us. Icarus Studios demonstrated how a human model’s movements are digitized into VR wearing a special suit covered with lights to track her every movement. Forterra showed how it could simulate terrorist attacks and medical emergencies, as well as an ordinary unhappy customer at a surf shop.

Virtual Worlds Investing

VR looks like a promising new country to invest in, but how do you get your money out? Susan Lucas-Conwell moderated a panel on investing in virtual worlds with Boris Karadogan of ComVentures, Scott Raney of Redpoint Ventures, Yesha Sivan of Microsoft, Sharon Weinbar of Scale Venture Partners and Susan Wu of Charles River Ventures.

VCs have done well with virtual gaming, social media and currency with growth potential in mobile and wireless technology. The panel invests in very early stage companies and looks kindly toward operations that are up and running. They are reluctant to invest in the more lurid parts of VR as it moves into mainstream society.

Facebook is an example where users create content by talking about their lives. In some ways they become content. They have a stake in their virtual communities. Good models attract users and keep them. Lower barriers of entry will attract more people. No downloads, no difficult setups, just clicking and starting will draw users. This combination of community, creation and commerce in a three-dimensional environment will revolutionize the way people interact with each other and the world.

The successful revenue models provide content and use advertising or selling virtual goods. Subscription models only work up to a point. Users are spending an hour per day with lots of opportunity for advertising. Product placement and tie-ins with other media add to the immersive experience of engaging with a brand. VR will gradually become the dominant platform for consuming mainstream media content. Concurrency increases stickiness by an order of magnitude. There are opportunities for easy-to-use tools for users to create and manage their content.

Beyond creating goods or content, Companies can make money by building infrastructure, offering services to connect between environments and specific consulting to those environments.

Virtual Worlds in Collision

There are many challenges ahead. The technology to have large numbers of people in one virtual world simultaneously is not quite there yet. There are no recognized industry standards for moving avatars or related data from one platform to another. People who spend too much time online will probably spend too much time in VR.

The real world is encroaching on virtual worlds. The increase in commerce will bring fraud and the headaches of policing it. In July 2007, Linden Labs shut down gambling, stopping forty percent of user-to-user transactions. They stopped selling Linden dollars for three weeks and later determined that gambling was only three percent of their money supply.

In case you are wondering, Linden Dollars are not currency but limited license rights based out of a bank in Sweden. Despite this rather esoteric definition, money laundering is a concern.

The EU is already trying to collect a Value Added Tax (VAT) for the selling of imaginary objects. You know something is real when it can be taxed. If a user creates a virtual good do they have the right to take it with them to another platform?

How do investors research and understand growing youth markets without seeming creepy? Responsible parents tell their children not to download software onto their computers. Most VR software requires it. Therefore some less invasive lower bar needs to be created so users can access VR through a browser. Managing multiple identities and being able to move them from one platform to another still need to be worked out.

Metaversatility’s Adrienne Haik discussed work issues with Studio SFO’s Bob Ketner. Apparently an employee avatar is company property just like an employee’s email address. What happens when a sales executive leaves for another company? Does the virtual likeness of that person have to change at the new company? Do all the social networking contacts have to be re-established?

All of these issues will have to be addressed in the real world.

Copyright 2007 DJ Cline All rights reserved.

Featured Speakers:

Joakim Achren, Chief Executive Officer, Ironstar Helsinki
Kevin Alderman (aka Stroker Serpentine), CEO, EROS, LLC
Motty Alon, CEO, Memex Technologies
Brent Arslaner, VP of Marketing, Unisfair
Linda Ban, Client and Program Strategy Executive, 3DInternet and Digital
Convergence, IBM Research
Jeff Barr, Senior Web Services Evangelist, Amazon Web Services
John Bates, Evangelist, Entropia Universe
Michael Bellavia, Managing Director, Animax Entertainment
Betsy Book, Director of Product Management, Makena Technologies
Ken Brady, Director, International Strategies, Centric Agency of Change
Erik Bethke, CEO, GoPets
Matt Bostwick, SVP, Franchise Development, MTV Music Group
Dr. James Bower, CEO, Numedeon Inc / Whyville.net
Corey Bridges, Co-founder, Executive Producer, & Marketing Director,
The Multiverse Network
Ron Burns, President, ProtonMedia
Yuanzhe (Michael) Cai, Director, Broadband & Gaming, Parks Associates
Chris Carella, Creative Director, The Electric Sheep Company
Dorcas Casey, VP of Project Strategy & Development, FunWebProduct
Edward Castronova, Associate Professor, Indiana University
Rafhael Cedeno, CTO and co-founder, Multiverse
Beth Coleman, Professor of New Media, MIT
Jonathan Collins, Executive Producer, The Electric Sheep Company
Giff Constable, GM, ESC Software, The Electric Sheep Company
Susan Lucas-Conwell, CEO, SDForum
Aaron Delwiche, Co-founder, Metaversatility, Inc.
Mike Dowdle, Vice President of Business Development, Kaneva
Jeska Dzwigalski, Product and Community Wrangler, Linden Lab
Nevin Fouts, Associate Dean for Information Technology, Duke University’s
Fuqua School of Business
David Gardner, Executive Vice President, Icarus Studios
Robert Gehorsam, President, Forterra Systems
Rick Giolito, President, Trilogy Studios
Ben Goertzel, CEO, Novamente LLC
Mary Ellen Gordon, Owner, Market Truths Limited
Guntram Graef, Co-Founder, Anshe Chung Studios, Ltd., China
Joel Greenberg, VP, Marketing Innovation, The Electric Sheep Company
T. J. Gentle, President, SmartFurniture.com
Karl Haberl, Director, Sun Microsystems Laboratories
Adrienne Haik, Co-Founder, Metaversatility, Inc.
Robin Harper, Vice President, Marketing & Community Development, Linden Lab
Erik Hauser, Founder/Executive Creative Director, Swivel Media
Ian Hughes, Metaverse Evangelist, IBM
Teemu Huuhtanen, President, N.A. & EVP Bus. Dev., Sulake Corp. Ltd.
Nabeel Hyatt, Founder & CEO, Conduit Labs
Joe Hyrkin, Vice President, Sales & Business Development, Gaia Online
John Jainschigg, Director, Online Technology and New Business,
CMP Technology, LLC
Ben James, Communications Strategy Director, Rivers Run Red
Daniel James, CEO, Three Rings
Greg Johnson, Chief Marketing Officer, GGL Global Gaming
Sean Kane, Attorney, Drakeford & Kane LLC
Sampo Karjalainen, Chief Creative Officer, Sulake Corporation
Darius Kazemi, President, Orbus Gameworks
Bob Ketner, Creative Director, Studio SFO
Sandy Kearney, IBM Global Director, IBM 3D Internet and Virtual Business
Rita J. King, CEO and Creative Director, Dancing Ink Productions LLC
Christopher Klaus, Founder and Chief Executive Officer, Kaneva
Raph Koster, President, Areae, Inc.
Stephen Lawler, General Manager of Virtual Earth, Microsoft
Christian Lassonde, President, Millions of Us Inc.
ø‡éuÁãÅiChi Tai Robert Lai), Chief Scientist, Beijing China Recreation District
Blake Lewin, Vice President Product Development, Turner Broadcasting Inc.
Brad Lineberger, CTO, Icarus Studios
Peter Marx, Managing Partner, Analog Protocol
Steve Metzger, CEO, VT&T
Jean-Ann Mills, Events Producer, The Electric Sheep Company
Mattias Miksche, CEO, Stardoll
Nic Mitham, Managing Director, K Zero
Mike Monello, Partner / Creative Director, Campfire
Randal Moss, Manager of Futuring and Innovation Center, American Cancer
Paco Nathan, Technical Director, HeadCase Humanufacturing, Inc.
Greg Nuyens, CEO, Qwaq
Ryan Olson, Marketing Coordinator, Outspark
Bryan O’Sullivan, Hacker, Linden Lab
Tony O’Driscoll, Professor of the Practice in the College of Management,
North Carolina State University
Jerry Paffendorf, CEO, Wello Horld
David Peck, New Media Consultant, Britney Mason Productions
Peter Phillips, Technical Director, Millions of Us
Jeffrey Pope, Senior Manager, Far East Region, Sun Microsystems
Scott Raney, Venture Capitalist, Redpoint Ventures
Christian Renaud, Chief Architect, Networked Virtual Environments, Cisco
Kyra E. Reppen, Senior Vice President & General Manager, NeoPets
Ben Richardson, VP Business Development, Makena Technologies
Eric Rice, Executive Producer, Slackstreet Entertainment
Ren Reynolds, writer, philosopher and consultant
Jason Root, Senior Vice President, Digital, Nick.com and Nickatnite.com
Yuki Saeki, International Coordinator, Centric – Agency of Change
Daniel Schiappa, GM, Strategy Entertainment and Devices Division, Microsoft
Stefanie Schwartz, Vice President of Marking and Operations, NeoPets
Joey Seiler, Reporter, VirtualWorldsNews.com
Christopher V. Sherman, Executive Director, Virtual Worlds Management
Craig Sherman, CEO, Gaia Online
Naoyoshi Shimaya, CEO, Metabirds
Art Sindlinger, VP, Activation Director – Social Media & Gaming, Starcom
Yesha Sivan, EIR – Metaverse, JVP Studio Ventures
Trevor F. Smith, Founder, Transmutable
Timo Soininen, Chief Executive Officer, Sulake Corporation
Michael Solomon, Professor, Saint Joseph’s University
Paul Steinberg, Intel Software Network, Intel Software Solutions Group
Tim Stevens, President & CEO, Doppelganger
Reuben Steiger, CEO, Millions of Us
Matthew Sunkin, Network Engineer, Intel Corporation
John Swords, The Electric Sheep Company
Jodi Turton, Community Manager, Makena Technologies
Sibley Verbeck, CEO, The Electric Sheep Company
Mark Wallace, blogger, 3pointD.com
Rich Weil, Commuity Relations Director, Cartoon Network
Sharon Weinbar, Managing Director, Scale Venture Partners
Valerie Williamson, VP of Marketing and Business Development,
The Electric Sheep Company
Michael Wilson, CEO, Makena Technologies
Susan Wu, Principal , Charles River Ventures
Hui Xu, Founder & CEO, HiPiHi Co., Ltd
Paul Yanover, Executive Vice President & Managing Director, Disney Online
John Zdanowski, Chief Financial Officer, Linden Lab
Mark Zohar, Founder and Senior Vice Presiden, SceneCaster

Copyright 2007 DJ Cline All rights reserved.