Virtual Worlds Market Segments

One of my students, Michael Biggs, showed me this very nifty visualization showing the various market segments of virtual worlds. Kzero: Looking across the metavers.

This is really nicely done because it compares all the different worlds, and seems reasonably accurate, although they mistakenly put There, which launched in 2003, as having started in 2005, the year that Makena bought it from There, Inc. Also notice Habbo Hotel, with ten times the suscription rate of World of Warcraft. Habbo Hotel is the killer app of our industry without a doubt: it's "the little isometric 3D world that could."

Even so, subscriber numbers can be misleading, so we need to be cautious in taking them at face value. For instance, according to this, Second Life boasts 12 million subscribers. First of all, we don't know if this is total subscribers or active subscribers, and it's common for people to migrate between worlds from time to time. Also, as is the case with most of these worlds, the initial subscription is typically free. What that 12 million figure doesn't really represent is that a) there are many people with "accounts" in Second Life who have never made it out of the tutorial, and b) it is common cultural practice for Second Lifers to have multiple accounts. I have three myself, and others I know have as many as ten. In There, on the other hand, the subscription is paid, thus creating a natural gating effect, and only really hardcore Thereians or people who have been in-world for multiples of years will tend to have extra accounts, and then typically only one or two "alts." Also the subscription rates don't really tell us much about revenue, since most of the revenue for virtual worlds comes in other forms, e.g., real estate in Second Life, developer fees, virtual commerce and land fees in There. Since most companies will not release a lot of detail on their subscriber base, we therefore don't really have answers to the much more salient question of how much revenue is being generated on average per subscriber.

These distinctions also point out the value of qualitative research. Quantitative research can tell us things like how many subscribers there are, but it often doesn't do as good a job of conveying the nuances of what subscription actually means, both in terms of cultural practices, and in terms of revenue. So we need to find more rigorous tools, I think for measuring these things both quantitatively and qualitatively. The more research I do on virtual worlds and online games, the more I am favoring mixed methods approaches that include both. Studying communities is complex and we need to be able to get both macroscopic and microscopic views of culture in oder to understand it. I find they tend to inform one another, so we can look at large-scale patterns, like subscriber bases, but then we need to bore in deeper to find out what they really mean in terms of what people are actually doing and where they are spending money.

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