Leveraging Virtual Worlds for Leveraging Virtual Worlds for Real World ResultsReal World Results

Dr. Robin Teigland, akaDr. Robin Teigland, akaKarinda Rhode in SLKarinda Rhode in SLStockholm School of EconomicsStockholm School of Economicswww.knowledgenetworking.orgwww.knowledgenetworking.orgwww.slideshare.net/eteiglandwww.slideshare.net/eteigland

Serdar TemizRoyal Institute of Technology

Photo: Lundholm, Metro

December 2009December 2009

Today’s discussionToday’s discussion

• Introduction and some facts and Introduction and some facts and figures on virtual worldsfigures on virtual worlds

• A look at business opportunities in A look at business opportunities in virtual worldsvirtual worlds

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- You on Youtube?- No, Hulu and Itunes, but I lost the USB for my MP3. It’s MIA, so is my GPS.- This PDF won’t show up on my LCD. - Call your ISP.- I could send them an SMS or look it up on the cookie wiki. So you on Google now?- No, Bing. - You are such a Yahoo! Oh, just got poked on Facebook.- From?- My mom wants to know if she can use Paypal for Netflix.- Did she ever sell her Imac on Ebay?- No, but she got WiFi for the Xbox.- Can we have a real conversation now?- Sure, can we have it in Second Life?

NPR, Internet’s 40th Birthday, 2009NPR, Internet’s 40th Birthday, 2009

History tends to repeat itself….History tends to repeat itself….Innovation, financial crisis, industrial revolution, … Innovation, financial crisis, industrial revolution, …

Steam Steam engineengine

Internal Internal combustion combustion

engineengine

MicroelectronicMicroelectronicss

Late 18Late 18thth C C Late 19Late 19thth C C Late 20Late 20thth C C

Schön 2008

Third industrial revolution?

Here comes the Immersive InternetHere comes the Immersive Internet

O’Driscoll 2009O’Driscoll 2009 5

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eBay allowed people to selleBay allowed people to selltheir personal items in a their personal items in a worldwide yard sale, the worldwide yard sale, the Immersive Internet willImmersive Internet will

allow people to sell their allow people to sell their personal skills and abilities personal skills and abilities

in much the same way.in much the same way.

Kapp & O’Driscoll, 2009Kapp & O’Driscoll, 2009

A growing universe of Virtual WorldsA growing universe of Virtual Worlds

http://www.youtube.com/watch?v=wMOqI3hH9Gshttp://www.youtube.com/watch?v=wMOqI3hH9Gshttp://www.youtube.com/watch?v=0CijdlYOSPchttp://www.youtube.com/watch?v=0CijdlYOSPc

Around 150 virtual worlds

• Q1 2009: • $68 mln

invested in 13 virtual

world companies

VWS have many different modelsVWS have many different models

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Around 150 virtual worlds

What are Virtual Worlds?What are Virtual Worlds?

•PersistentPersistent, computer-simulated, , computer-simulated, immersiveimmersive environmentsenvironments

•Shared space/Shared space/co-presence co-presence with possibility for with possibility for socialization and community socialization and community

•In some cases, ability to manipulate/In some cases, ability to manipulate/create contentcreate content•In some cases, In some cases, virtual economy virtual economy and currencyand currencyhttp://www.youtube.com/watch?v=wMOqI3hH9Gshttp://www.youtube.com/watch?v=wMOqI3hH9Gs

Virtual Worlds• Open-ended–built by Open-ended–built by

residentsresidents• Social environment, Social environment,

affinity groupsaffinity groups• Boundaries for access and Boundaries for access and

buildingbuilding• Commerce, education, Commerce, education,

innovation, and…?innovation, and…?

MMOsMMOs• Scripted narrative – Scripted narrative –

created by game designerscreated by game designers• Goals and objectives, Goals and objectives,

ranking systemsranking systems• Rules for gameplay, Rules for gameplay,

winners and loserswinners and losers• Entertainment only?Entertainment only?

What financial crisis?What financial crisis?

• Increasing membersIncreasing members• Increasing turnoverIncreasing turnover• Increasing companiesIncreasing companies

Wonderland

Number of Accounts-Age Number of Accounts-Age (Cumulative)(Cumulative)

39% increase from Q1

2009

1313

  

• 40 mln members40 mln members • 135 mln 135 mln membersmembers

Two popular Kids & Tweens worldsTwo popular Kids & Tweens worlds

Building skills in virtual environmentsBuilding skills in virtual environments

My CVMy CV•Leading a virtual team of 30 Leading a virtual team of 30

individuals from across the globeindividuals from across the globe•Creating and successfully Creating and successfully executing strategies under executing strategies under

pressurepressure•Managing cross-cultural conflict Managing cross-cultural conflict

without face-to-face without face-to-face communicationcommunication

““Clearly if social activity migrates to Clearly if social activity migrates to synthetic worlds, economic activity will go synthetic worlds, economic activity will go

there as well.”there as well.” CastranovaCastranova

http://www.youtube.com/watch?v=-ahqjBeknT0http://www.youtube.com/watch?v=-ahqjBeknT0

Gartner’s hype cycleGartner’s hype cycle

Virtual World

s today?

Virtual world revenuesVirtual world revenues

USD 3bln in 2009

US spending on virtual goods passes USD 1 bln in 2009

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Microtransactions business model

 

Zynga:

- Majority revenues comes from 2% to 10% of users who pay $1 an hour to play premium games or buy virtual goods- Annual sales of about USD 100 mln

Playdom:  - Estimated USD 50 mln in sales per year from virtual goods

Social Gaming Network:

 - Estimated USD 50 mln sales mainly from virtual goods

Weeworld: - Estimated 2008 revenue USD 10 mln+ mainly from virtual goods

Habbo: - Estimated 2008 revenue USD 50 mln from virtual goods - 10% monthly players pay $10.30/month

http://www.businessweek.com/technology/content/apr2009/tc20090429_963394_page_2.htm

800,000 usersUSD 420 mln turnover

2008

Second Life by Linden LabSecond Life by Linden Lab

• 1.4 million residents logged in/60 1.4 million residents logged in/60 day periodday period

• 71,200 logged on Monday, Nov 71,200 logged on Monday, Nov 3030

• Average age=32, 43% female, Average age=32, 43% female, 55% non-US55% non-US

• Grew 33% in one year to 126 mln Grew 33% in one year to 126 mln at end of 2Q 2009at end of 2Q 2009

• Economy grew by 94% 2Q 2008-Economy grew by 94% 2Q 2008-20092009

• 270 Linden dollars 270 Linden dollars ≅≅ USD 1 USD 1• 350,000 hours of use per day350,000 hours of use per day• 68,000 people making profit68,000 people making profit

IT Businessedge, Linden Lab, 2009 IT Businessedge, Linden Lab, 2009 2323

Some things to do in SLSome things to do in SL• Take a guided tour at the IBM Business CenterTake a guided tour at the IBM Business Center• Visit a nuclear power power plant at Science School (Univ Visit a nuclear power power plant at Science School (Univ

of Denver)of Denver)• Experience a tsunami at Meteora (NOAA)Experience a tsunami at Meteora (NOAA)• Learn and experience the holocaust at the Holocaust Learn and experience the holocaust at the Holocaust

MuseumMuseum• Test your health literacy at Healthinfo Island (Group owned)Test your health literacy at Healthinfo Island (Group owned)• Diagnose patients at the Respiratory Ward at Imperial Diagnose patients at the Respiratory Ward at Imperial

CollegeCollege• Fly a plane at Boyington Airfield (Group owned)Fly a plane at Boyington Airfield (Group owned)• Experience schizophrenia at UC DavisExperience schizophrenia at UC Davis• Learn English at ESL (English as a Second Language)Learn English at ESL (English as a Second Language)• Help make the world greener at Univ of InnsbruckHelp make the world greener at Univ of Innsbruck• Join the innovation team at PhilipsJoin the innovation team at Philips• Play basketball at Ballers City (Group owned)Play basketball at Ballers City (Group owned) 2424

Self-made millionairesSelf-made millionaires

http://www.youtube.com/watch?v=Mg4TwOqVprw&feature=relatedhttp://www.youtube.com/watch?v=Mg4TwOqVprw&feature=related

•Jon “Neverdie” Jacobs•Paid USD 100,000 Paid USD 100,000 for asteroid space for asteroid space

resortresort•Bank owner in Bank owner in

EntropiaEntropia

•Anshe ChungAnshe Chung•Started with < USD Started with < USD

1010•Community Community developerdeveloper

•Bank owner in Bank owner in EntropiaEntropia

2525

What business opportunities are there What business opportunities are there outside VWs?outside VWs?

• Products:Products:– ConsultationConsultation– VW constructionVW construction

• Examples:Examples:– Grönstedt GroupGrönstedt Group– Electric SheepElectric Sheep– Millions of UsMillions of Us– Rivers Run RedRivers Run Red– Virtual Italian ParksVirtual Italian Parks

Cisco Hospital of Future – Cisco Hospital of Future – Palomar Hospital in SLPalomar Hospital in SL

What about making money inworld?What about making money inworld?

SL, Sep 2009SL, Sep 2009

Total of 593

Number of Number of individualsindividuals

Monthly Monthly USD profitUSD profit

SL net profits

How do people make money inworld?How do people make money inworld?

• Services: Services: – Hosts, dancers, personal shopping Hosts, dancers, personal shopping

assistants assistants • Virtual goods: Virtual goods:

– Furniture, fashion, skins, scripts, anything Furniture, fashion, skins, scripts, anything that can be designedthat can be designed

• Professionals: Professionals: – Educational instruction, training, Educational instruction, training,

simulations, consultingsimulations, consulting• Property management/ownership: Property management/ownership:

– Clubs, shops, recreation sitesClubs, shops, recreation sites• Real estate: Real estate:

– Developing, brokering, managementDeveloping, brokering, management

SL Marketplace: Buying and selling SL Marketplace: Buying and selling goodsgoods

http://www.xstreetsl.com/

Buying and selling Linden DollarsBuying and selling Linden Dollars

https://www.xstreetsl.com/modules.php?name=Currencyhttp://www.crossworldsxchange.com/

Virtual creditVirtual credit

http://www.firstmeta.com/consumers

Redgrave – One virtual boutiqueRedgrave – One virtual boutique

•Numerous stores selling all kinds of Numerous stores selling all kinds of wares and services in-worldwares and services in-world

•International customer baseInternational customer base•Easy payment scheme: Easy payment scheme:

Microtransactions Microtransactions •Global work force: MicroemployeesGlobal work force: Microemployees

New Citizens Inc – A successful non-New Citizens Inc – A successful non-profitprofit

• Provides services for Provides services for SL residentsSL residents

• Est. 2005Est. 2005• Staff of 150Staff of 150• Raises more than Raises more than

USD 13,000 / year to USD 13,000 / year to cover costscover costs

• Its instructors and Its instructors and event hosts are paid event hosts are paid

Showcasing current productsShowcasing current products

IBM’s Green Data CenterIBM’s Green Data Center

Developing training & education programsDeveloping training & education programs

Play2trainPlay2train

•New employee training, eg New employee training, eg policies, organizational policies, organizational

cultureculture•Skills training, eg salesSkills training, eg sales

•Virtual teamingVirtual teaming

Facilitating the virtual workforceFacilitating the virtual workforce

•Completely private virtual business worlds Completely private virtual business worlds offering tools to conduct business and offering tools to conduct business and

collaboratecollaborate•Fortune 500: IBM, Intel, Johnson & Johnson, Fortune 500: IBM, Intel, Johnson & Johnson,

Motorola, Novartis, Unilever Motorola, Novartis, Unilever

Training and educationTraining and education

IFL at SSE and Duke Corporate Education

Co-developing and running a virtual Co-developing and running a virtual team building exerciseteam building exercise

Creating a new fashion brandCreating a new fashion brand

• With Florida State University fashion designWith Florida State University fashion design• New brands designed and showcased on New brands designed and showcased on

catwalk during annual Miss Calypso on catwalk during annual Miss Calypso on Planet CalypsoPlanet Calypso

• Users / players vote on designs Users / players vote on designs • Clothing potentially produced in real lifeClothing potentially produced in real life

Finding and recruiting talent globallyFinding and recruiting talent globally

•Amazon.com job Amazon.com job fairfair

•Benelux job fairBenelux job fair•Accenture islandAccenture island

•IBM islandIBM island•EntrepreneursEntrepreneurs

•MicroemployeesMicroemployees

““Flow” leads to creativityFlow” leads to creativity

Four stepsFour steps•Getting inspiredGetting inspired

•Knowledge sharingKnowledge sharing•BrainstormingBrainstorming

•VotingVotingGiovacchini, Teigland, Kuhler, & Helms 2009Giovacchini, Teigland, Kuhler, & Helms 2009 4343

The upside of VW businessThe upside of VW business

– Low entry barriers, software often freeLow entry barriers, software often free– VWs humanize technologyVWs humanize technology– Young generation already there, “grown Young generation already there, “grown

virtual”virtual”– International reachInternational reach– MicrotransactionsMicrotransactions– MicroemployeesMicroemployees– The only limit is your own imaginationThe only limit is your own imagination

The downside of VW businessThe downside of VW business

• Some hardware and internet requirementsSome hardware and internet requirements• Poor “user friendliness”Poor “user friendliness”• Real world skepticismReal world skepticism• Security – theft of IP, scamsSecurity – theft of IP, scams• Inworld vandalism – griefersInworld vandalism – griefers• Not regulatedNot regulated• Difficulty in creating attractionDifficulty in creating attraction• No seamlessness between worldsNo seamlessness between worlds• Which world tomorrow?Which world tomorrow?

The future of 3D internetThe future of 3D internet

Before the first plate of aluminum is even bent for production, the

passengers will have flown the plane, the crew will have serviced the plane,

and the pilots will have flown the plane.

CEO of Boeing supplierCEO of Boeing supplier

What are the implications What are the implications for traditional industries? for traditional 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

Learn how to become an SL Fashion Designer at Learn how to become an SL Fashion Designer at Fashiontech.wordpress.com/Fashiontech.wordpress.com/

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Which professions will be Which professions will be revolutionized?revolutionized?

4949

5050

Will the playing field for SMEs be Will the playing field for SMEs be leveled?leveled?

Giovacchini et al. 2009Giovacchini et al. 2009

Innovation Innovation workshops bring workshops bring

together users from together users from across the globeacross the globe

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From the mobility of goods From the mobility of goods to the mobility of financial capital to … to the mobility of financial capital to …

...the “mobility” of labor?...the “mobility” of labor?

We digitized audio and We digitized audio and video, why can’t we just video, why can’t we just

digitize, digitize, you know, Earth” you know, Earth”

Philip Rosedale, ChairmanPhilip Rosedale, ChairmanLinden Lab Linden Lab

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DNDNAug 20, 1996Aug 20, 1996

Thanks and Thanks and see you in world!see you in world!

Karinda RhodeKarinda Rhode

aka Robin Teiglandaka Robin Teiglandrobin.teigland@hhs.serobin.teigland@hhs.se

www.knowledgenetworking.www.knowledgenetworking.orgorg

www.slideshare.net/www.slideshare.net/eteigland eteigland