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Fad or Future -Fad or Future -What Do Virtual Worlds Have to What Do Virtual Worlds Have to
Offer?Offer?
Dr. Robin TeiglandDr. Robin TeiglandStockholm School of EconomicsStockholm School of Economics
[email protected]@hhs.sewww.knowledgenetworking.orgwww.knowledgenetworking.orgwww.slideshare.net/eteigland www.slideshare.net/eteigland
Second Life & Virtual Worlds March 2008
[email protected] 2008
Today’s discussionToday’s discussion
IntroductionIntroductionWhat are organizations doing in virtual What are organizations doing in virtual
worlds?worlds?−Second LifeSecond Life−Other worldsOther worlds
The future The future −Four scenarios for 2012Four scenarios for 2012−What should you do? What should you do?
[email protected] 2008
A world of rapidly growing knowledge A world of rapidly growing knowledge ….….
>A person’s lifetime
18th centuryOne week
2007
Fischbowl 2007
[email protected] 2008
……that becomes quickly outdated ….that becomes quickly outdated ….
50%knowledge
relevant
50%knowledgeoutdated
First year of technical-based
education Third yearof education
Fischbowl 2007
[email protected] 20085
Growth
Time
Output of information and knowledge
Human absorptive capacity
..making it more difficult to keep up..making it more difficult to keep up
Junks 1989
[email protected] 2008
Increasing pace of change!Increasing pace of change!
Spread of Technology (Penetration rates years after introduction, Year I =Year Invented)
[email protected] 2008
””No one knows everything, No one knows everything, everyone knows something, everyone knows something,
all knowledge resides in humanity.”all knowledge resides in humanity.”
networks.networks.
Lévy 1997
[email protected] 2008
The number of virtual worlds is The number of virtual worlds is growinggrowing
[email protected] 2008
Second Life – one example of a virtual Second Life – one example of a virtual worldworld
Film by Duke CEFilm by Duke CE
http://www.youtube.com/watch?http://www.youtube.com/watch?v=Bi5i3UwVvbgv=Bi5i3UwVvbg
[email protected] 2008
The number of unique users in Second Life The number of unique users in Second Life has increased exponentially within one has increased exponentially within one
yearyear
0
1000000
2000000
3000000
4000000
5000000
6000000
June 2006 June 2007
SL, September 3, 2007
[email protected] 2008
US avatars spend the most hours in US avatars spend the most hours in world world
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
United S
tates
German
y
Franc
e
United K
ingdom
Netherlan
dsJa
pan
Italy
Spain
Brazil
Canada
SL, September 3, 2007
Total number
of hours
in world
Sweden is #17
[email protected] 2008
Who’s in world in Second Life?Who’s in world in Second Life?
0
20000
40000
60000
80000
100000
120000
140000
United S
tates
German
yBraz
il
United K
ingdom
Franc
eJa
pan
Italy
Spain
Netherlan
ds
Austra
lia
Canada
Number of
activeavatars
SL, September 3, 2007
Sweden is #17
[email protected] 2008
25-34 year olds spend most time in 25-34 year olds spend most time in worldworld
SL, September 3, 2007
Total number of hours in world
~40% Female
[email protected] 2008
Why should we be interested?Why should we be interested?Second Life as an example (March 2008):Second Life as an example (March 2008):~~50,00050,000 people online at any one time people online at any one time~~1,350,0001,350,000 people logged on during past 60 people logged on during past 60
daysdays~~1,500,000 USD1,500,000 USD spent every day on virtual spent every day on virtual
goods and servicesgoods and services>>Numerous multinationalsNumerous multinationals with a presence with a presence
[email protected] 2008
Today’s discussionToday’s discussion
IntroductionIntroductionWhat are organizations doing in virtual What are organizations doing in virtual
worlds?worlds?−Second LifeSecond Life−Other worldsOther worlds
The future The future −Four scenarios for 2012Four scenarios for 2012−What should you do? What should you do?
[email protected] 2008
What are real world organizations What are real world organizations doing in Second Life?doing in Second Life?
Marketing, Branding, & Sales− Adidas, BMW, Dell, IBM, Sun, Cisco, Coldwell Banker, Adidas, BMW, Dell, IBM, Sun, Cisco, Coldwell Banker,
Reebok, Nissan, Pontiac, Starwood, Leo Burnett, Reebok, Nissan, Pontiac, Starwood, Leo Burnett, Vodafone Vodafone
External Communications− BMW communicates its clean energy conceptBMW communicates its clean energy concept− Coca-Cola holds competitionsCoca-Cola holds competitions
Product & Concept Development− Philips Electronics, Starwood, Toyota, PA Consulting Philips Electronics, Starwood, Toyota, PA Consulting
(for its clients)(for its clients) Recruiting
− Job fairs and anonymous contact Job fairs and anonymous contact − ABN Amro, PA Consulting, IBM, Dell, etc.ABN Amro, PA Consulting, IBM, Dell, etc.
Internal Communications, Training, & Education− Springtime
[email protected] 2008 19
“We think it has potential as a way of doing business. We’re
just experimenting with it ourselves but we see massive
potential in the human interaction you can bring. It’s a
big browsing environment in many ways.”
- IBM Director
[email protected] 2008
““Catalogue” sales Catalogue” sales
Sears (in collaboration with IBM)Sears (in collaboration with IBM)•Enables customization of kitchen, garage,
home bio•Links to Sears.com for purchase
[email protected] 2008 21
SpringtimeSpringtime Training with avatars from Shanghai, Training with avatars from Shanghai,
Beijing, Stockholm, and GotlandBeijing, Stockholm, and Gotland
Internal communicationsInternal communications
[email protected] 2008
In-house training and educationIn-house training and education
IFL at SSE and Duke Corporate IFL at SSE and Duke Corporate EducationEducation
Co-developing and running virtual Co-developing and running virtual team building exerciseteam building exercise
[email protected] 2008
Improving skillsImproving skills
Learning to sail with the Starboards Yacht Club
[email protected] 2008
Conducting experimentsConducting experiments
Creating a communication strategyCreating a communication strategyfor Skatteverketfor Skatteverket
[email protected] 2008
Leveraging avatarsLeveraging avatars
ToyotaToyota•Launches real and virtual products simultaneously
•Enables avatars to customize vehicles in SL
[email protected] 2008
..to develop new products ..to develop new products
The Innovision Competition by ElectroluxThe Innovision Competition by Electrolux
[email protected] 2008
..and create tomorrow’s solutions..and create tomorrow’s solutions
Building the house of the futureBuilding the house of the futurein an HSB competitionin an HSB competition
[email protected] 2008
Collaborating and co-creatingCollaborating and co-creating
Museum with “open source” art
[email protected] 2008
Experiencing the “impossible”Experiencing the “impossible”
UC Davis Medical Center has UC Davis Medical Center has simulated schizofreniasimulated schizofrenia
[email protected] 2008
But Return on Investment is limitedBut Return on Investment is limited
We have a long-term approach to costs and RoI. We have
qualitative goals, to expand and develop
our presence.- BMW
We have no targets for
RoI. -ABN Amro
There needs to be some RoI eventually, but this is a long-term
project and we are just looking at the
potential.- Vodafone
Financial Times, May 2007
[email protected] 2008
Is anybody out there?Is anybody out there?Visitors
10:15 pm, Tuesday, Sept 4, 2007
(GMT+1)ABN Amro -0ABN Amro -0
Adidas – 0Adidas – 0Cisco - 18Cisco - 18BMW - 0BMW - 0Dell – 6Dell – 6IBM – 23IBM – 23
Nissan – 0Nissan – 0Reebok - 0Reebok - 0
Sun Microsystems - 1Sun Microsystems - 1Vodafone - 2Vodafone - 2
Insead – 0Insead – 0BMW In-world
Wells Fargo, Starwood Hotels, Wells Fargo, Starwood Hotels, American Apparel are pulling outAmerican Apparel are pulling out
[email protected] 2008
So, what do people do?So, what do people do?Most popular places
(total time spent there)
−The Pharm – Techno The Pharm – Techno Dance ClubDance Club
−Money Island Money Island −Money Tree IslandMoney Tree Island−HippiePay IslandHippiePay Island−Hippiepay Woodstock Hippiepay Woodstock
IslandIsland−Freebie BeachFreebie Beach−CittadellaCittadella−Metaverse Puerto BanusMetaverse Puerto Banus−Welfare IslandWelfare Island−Best Skins*ClothesBest Skins*Clothes
SL, Jan 29, 2008
[email protected] 2008
Critical mass is restricted due to Critical mass is restricted due to technologytechnology
LocationLocation PopulationPopulationLand Land area area (km(km2)2)
Density Density (people per (people per
kmkm2)2)
The Pharm The Pharm Techno Techno Dance ClubDance Club#1 popular #1 popular sitesite
9898Online, Mon, Jan Online, Mon, Jan
28 9:45 pm 28 9:45 pm (GMT+1)(GMT+1)
0.060.06 1,4791,479
ParisParis 2,153,6002,153,600 8787 24,75924,759New YorkNew York 8,143,0008,143,000 786786 10,31610,316
Stockholm*Stockholm* 782,890782,890 188188 4,1644,164Richmond, Richmond, VAVA
195,250195,250 138138 1,3911,391
Gothenburg*Gothenburg* 489,760489,760 450450 1,0831,083
* Municipality (kommun)* Municipality (kommun) wikipedia.org
[email protected] 2008
Is there critical mass on Second Life?Is there critical mass on Second Life?
LocationLocation PopulationPopulationLand area Land area
(km(km2)2)Density Density (people per (people per
kmkm2)2)
Second LifeSecond Life 54,92054,920Online, Mon, Jan Online, Mon, Jan
28 9:45 pm 28 9:45 pm (GMT+1)(GMT+1)
805805 6868
Motala*Motala* 42,06042,060 988988 4343SwitzerlandSwitzerland 7,252,3307,252,330 41,28441,284 177177
* Municipality (kommun)* Municipality (kommun) wikipedia.org
[email protected] 2008
0
50
100
150
200
250
300
350
400
450
500
February March April May June July
> $5,000 USD$2,000 to $5,000 USD
And is anyone making money?
What are these individuals selling?Real estate & land rentals
Simulation & training environments, gamesClothing, accessories, skins, animations
Art, design, furniture SL, Jan 29, 2008
Total of 482
>$5000$2000-5000
[email protected] 2008
Recent regulatory developments in Recent regulatory developments in Second LifeSecond Life
Second Life’s largest bank closes its doorsSecond Life’s largest bank closes its doors
[email protected] 2008
What is happening in What is happening in other virtual worlds?other virtual worlds?
[email protected] 2008
Are businesses anywhere else?Are businesses anywhere else?
Active Worlds•2 mln users
•Branding•Wells Fargo left SL for
AW
Habbo Hotel•7 mln users (mostly
teens)•Digital goods and
marketing•Target, Wal-Mart,
Kellogg, Nintendo, Walt Disney
[email protected] 2008
Cyworld - A world where Cyworld - A world where “MySpace meets Second Life”“MySpace meets Second Life”
•40% of entire population
•$96% of 20-30 yr olds in Korea regular users
•120 mln 2006 in Korea •More video traffic than
YouTube
Computer Sweden, June 2007
[email protected] 2008
MMOGs still dominateMMOGs still dominateWorld of Warcraft
•374,000 hours played each day or 50,000 man days
each day•8.5 mln players worldwide
Xfire.com, MMPORG.com
Korean Free to Play (F2P)•4 of top 10 MMOGs in Western world
•Silkroad Online #1 in West•MapleStory with >50 mln players
[email protected] 2008
Where are we Where are we todaytoday with virtual with virtual worlds?worlds?
Business opportunities limited?−Many real world firms have virtual world presence, but Many real world firms have virtual world presence, but
difficulty turning it into an effective, profitable sales channeldifficulty turning it into an effective, profitable sales channel Primarily for marketing or learning experiencePrimarily for marketing or learning experience No RoI success stories for real world firmsNo RoI success stories for real world firms Required resources outweigh short-term benefitsRequired resources outweigh short-term benefits
−Limited number of individual success storiesLimited number of individual success stories ~150 other individuals making >$5000 per month~150 other individuals making >$5000 per month
−““Trapped” in real world activities?Trapped” in real world activities?Virtual worlds overhyped?
−Growth lower than appears, small compared to MMOGsGrowth lower than appears, small compared to MMOGs−Reality vs. fantasy? Reality vs. fantasy?
Disconnect between real world companies/products and SL fantasy Disconnect between real world companies/products and SL fantasy avatarsavatars
[email protected] 2008
Today’s discussionToday’s discussion
IntroductionIntroductionWhat are organizations doing in virtual What are organizations doing in virtual
worlds?worlds?−Second LifeSecond Life−Other worldsOther worlds
The future The future −Four scenarios for 2012Four scenarios for 2012−What should you do?What should you do?
[email protected] 2008
So, what about the So, what about the future of virtual future of virtual
worlds?worlds?
[email protected] 2008
What can we do that What can we do that we “we “cannot”cannot” do in real do in real
life?life?
[email protected] 2008
Creating immersive experiences..Creating immersive experiences..
Inside van Gogh’s Starry NightInside van Gogh’s Starry Night
[email protected] 2008
……to reduce virtual distanceto reduce virtual distance
A recreation of the Sistine Chapel
[email protected] 2008
Facilitating the virtual workforceFacilitating the virtual workforce
•Completely private virtual business worlds offering tools to conduct business and
collaborate•Fortune 500: Johnson & Johnson, Novartis,
Motorola, Intel
[email protected] 2008
Developing training & educational Developing training & educational programsprograms
Play2train
[email protected] 2008 51
Increasing effectiveness inIncreasing effectiveness intraditional industriestraditional industries
“Soon all fashion designers will be originating their designs and managing the production in virtual worlds….Why such a dramatic change? Economics,
pure and simple.”Shenlei Winkler,
Director Fashion Research Institute
[email protected] 2008
Improving national competitivenessImproving national competitiveness
•China’s “virtual world where millions will work, communicate, and be in love”
•7 mln local + 150 mln overseas Chinese
•Five virtual banking licenses auctioned for $404,000 May 2007
Financial Times, June 2007
[email protected] 2008
How can we look into the future?How can we look into the future?
Forecast−How we think the future will beHow we think the future will be
Vision−How we want the future to beHow we want the future to be
Scenario−What the future can beWhat the future can be
[email protected] 2008
Two underlying questionsTwo underlying questions
In 2012…1.1. HowHow advanced will the usage of virtual worlds will the usage of virtual worlds
be?be? Widespread use across all dimensions, high user Widespread use across all dimensions, high user
demands demands Forces: Economic development, digital divide, Forces: Economic development, digital divide,
environmental pressuresenvironmental pressures
2.2. How How integrated will virtual worlds be? will virtual worlds be? Cooperation between different worlds, VW & RWCooperation between different worlds, VW & RW Forces: Security, technology, legislative, politicalForces: Security, technology, legislative, political
[email protected] 2008
Four scenarios for 2012Four scenarios for 2012
Fragmentatedworlds
Integratedworlds
Advancedusage
Less-advanced
usage
Digital Divide•Ease of mobility•Self-governance
•Dominance by gaming generation•Traditional vs virtual business
One Converged Universe•High penetration
•Easy avatar & asset mobility•High scalability & security•Business transformation
Wild Wests•Individual “MMOGs” dominant
•Virtual vandalism•Security problems
•Retreat
Virtual Silos•Many competing, limited worlds•Difficult avatar & asset mobility
•Limited scalability•High security
•New business models
[email protected] 2008
What should you do?What should you do?Approach as a disruptive technology
−Enables a new strategy or new business modelEnables a new strategy or new business model−Enables a larger population of less skilled, less Enables a larger population of less skilled, less
wealthy people to do things in a more wealthy people to do things in a more convenient, lower cost settingconvenient, lower cost setting
E.g., Telephone, digital photography, PCs, LinuxE.g., Telephone, digital photography, PCs, Linux
Think wikinomics and peer-to-peer exchange−Mass collaboration by free individual agents to Mass collaboration by free individual agents to
improve a given operation or solve a problem improve a given operation or solve a problem E.g., Boeing, Chinese motorcycle industry, P&GE.g., Boeing, Chinese motorcycle industry, P&G
Christenson 1997, Tapscott & Williams 2006
[email protected] 2008
What should you do in virtual worlds?What should you do in virtual worlds?
Experiment, “play”, and learn Stay on the look-out
Consider creating independent operations
V ice P re sid e n tR e se a rch /D e v l.
P ro d u c t A P ro d u c t B P ro du c t C
V ice P re sid e n tM a nu fa c tu rin g
V ice P re sid e n tM a rke ting
P re sid e n t
Don’t forget other emerging media
[email protected] 2008 61
Develop an open innovation attitudeDevelop an open innovation attitude
Not all the smart people work for us. We need to work with smart people inside and outside the
company.
The smart people in our field work for us.
If you create the most and the best ideas in the industry, you will
win.
If you make the best use of internal and external ideas, you
will win.
Closed attitude Open attitude
Chesborough 2003
[email protected] 2008 62
Leverage the wisdom of crowdsLeverage the wisdom of crowds
ClosedExpensiveComplexAccurate
OpenInexpensive
SimpleClose enough
Surowiecki 2004, Surowiecki 2004, Hinton 2007
[email protected] 2008
The opportunities are endless…….The opportunities are endless…….
http://static.flickr.com/47/110109290_2189217cee.jpg
[email protected] 2008Gartner Group, April 2007
By the end of 2011, 80% By the end of 2011, 80% of active Internet users of active Internet users
(and Fortune 500 (and Fortune 500 enterprises) will have a enterprises) will have a “second life”, but not “second life”, but not necessarily in Second necessarily in Second
Life.Life.
[email protected] 2008
Disney pays $350 mln for Club Disney pays $350 mln for Club Penguin Penguin
65
•Kids 6-14 in Canada•700,000 paying users
•Virtual goods and online merchandise
paidcontent.org
[email protected] 2008
……building skills todaybuilding skills today
Xfire.com, MMPORG.com, June 2007
World of Warcraft•Collaborating and leading across geographies, demographics, and cultures•Creating and executing strategies•Collaborative decision making under pressure•All virtually with no face-to-face interaction
[email protected] 2008
“I think there’s a world market for maybe five
computers.”Thomas Watson, Chairman
of IBM, 1943
“There is no reason anyone would want a
computer in their home.”
Ken Olson, President, Chairman and
Founder of Digital Equipment
Corporation, 1977
“Heavier-than-air flying machines are impossible.”
Lord Kelvin, President, Royal Society, 1895
[email protected] 2008
We digitized audio and video, why can’t we just
digitize, you know, Earth”
Philip Rosedale, CEOLinden Lab
[email protected] 2008
Thanks and see you in world!
Karinda Rhode
aka Robin [email protected]
www.knowledgenetworking.org
www.slideshare.net/eteigland
