Virtual Worlds: Mapping a New Business RealityPublished: March 24, 2009 in Knowledge@Emory
Originally Published October, 2008
Three-dimensional virtual worlds have expanded far beyond the playground of teenage boys in a basement playing computer games. Today, emergency workers design them for disaster training, scholars use them to teach and do research, and entrepreneurs create virtual start-ups to generate real world revenue.
The future of this Internet platform, in which users create digital alter-egos called avatars, was the focus of a recent two-day conference co-sponsored by Emory University’s Goizueta Business School, Emory’s Claus M. Halle Institute for Global Learning, and the Federal Reserve Bank of Atlanta. The conference, “Virtual Worlds and New Realities in Commerce, Politics and Society,” drew together academics, gamers, entrepreneurs, social scientists and information technology specialists.
Panelists included John Zdanoski of Linden Labs, creator of the virtual world Second Life, and Chris Klaus, founder of the Atlanta-based virtual world Kaneva. Zdanoski participated via his avatar, Zee Linden, streaming live through a Second Life Cable Network channel. Their discussion, called “Possible Futures of Virtual Worlds and Society,” was broadcast in Second Life on a TV show called Metanomics.
While .3% of the world’s population currently participates in virtual worlds, the actual number is higher than the number of Internet surfers in 1994, says Benn Konsynski, a chaired professor of information systems and operations management at Goizueta and conference co-chair. As millions of Internet users around the world buy, sell and trade virtual land, goods and services, the resulting economies rival those of small countries, says Indiana University’s Edward Castronova.
Corporations are still exploring the best way to leverage the new technology and haven’t gone much beyond holding staff meetings and collaborating with clients in virtual worlds. But by 2011, 80% of active Internet users, or 250 million people, will have avatars and be active participants in virtual worlds, according to Gartner research, a leading provider of global IT analysis. It is a space that cannot be ignored.
Robert Bloomfield of Cornell University’s Johnson Graduate School of Management and host of Metanomics, observes that virtual worlds fall generally into the following four categories:
Entertainment: Gaming and socializing are the most popular virtual world activities. Adults slay monsters and complete quests in Vivendi’s World of Warcraft. Kids logon to Ganz’ Webkinz, Disney’s Club Penguin, and Mattel’s Barbie.com to name, play with, and dress animals and dolls. They can also play games to earn virtual money to spend in-world. Second Life, with more than 11 million registrants, is geared toward adults and features nightclubs, shopping malls and meeting places where avatars can pose, flirt and, oh yes, fly. Kaneva, launched in March 2007, has been likened to a virtual world version of MySpace. It is geared toward those aged 18 to 34.
Training: The Maryland Department of Transportation has replicated Interstate 95 in a virtual world, created a massive traffic accident, then watched emergency workers and other first responders close exits, reroute traffic and evacuate the injured. “It’s an extension of the flight simulator,” says Bloomfield. “It allows you to practice in a way you can’t do in the real world.”
Outreach: Users share information across time zones and national borders, social science researchers collect data, and politicians campaign 24/7. Bloomfield hosts the TV show Metanomics every Monday in Second Life, tackling virtual world topics of the day (such as the Emory conference, part of which was broadcast on his show.)
Marketing and commerce: The most nascent aspect of virtual worlds, it also may hold the most potential. While big business explores where the real opportunities exist, entrepreneurs have found a home in Second Life, which has a floating currency called “Linden dollars” that can be converted to U.S. currency. Second Life has seen its first millionaire, and many others are able to earn a living.
Gregg Kaminsky, an Executive MBA student at Goizueta, told the conference about his Second Life start-up, which generates revenues in the six figure range. He buys and sells real estate, and he has set up a “Wal-Mart type distribution system” of goods and services with more than 1,000 affiliates plus 200 vendors whom he has never met. “I started doing it for fun,” he says. “But now it’s like business school. It has contributed a lot to my studies. The experience is every bit as real in a virtual world.”
The Emory conference grew out of a paper published by Konsynski and doctoral candidate David Bray on the history and growth of virtual worlds. After generating significant interest online, a course on the topic was offered for political science and business students. Taught by Konsynski and Holli A. Semetko, vice provost for International Affairs and director of The Claus M. Halle Institute for Global Learning, with assistance from Bray, the course was first offered in fall 2007.
Virtual worlds are still in the very early stages, says Klaus, a former Georgia Institute of Technology student who founded Kaneva. Developers are where MP3s were seven years ago in terms of sophistication and ease of use. Kaneva’s goal, he says, is to combine the virtual world with social networking and videogaming, and draw in ordinary folks as users.
As virtual worlds evolve, notes Konsynski, there will be fits and starts. “We are going to do a lot of dumb things and a lot of smart things. The Amazons and the Googles and the eBays are going to pop out,” he says. In many ways, “the technology is more important than the virtual worlds themselves.”
Kids currently getting hooked on cutesy virtual worlds with pets, dolls and games will expect an immersive, rich media in ten years, when they enter the business world. “The browser of 10 years from now will be immersive. It will be a rich media,” says Konsynski. “Kids and adults are going to learn to move by gesture, with body navigation, like you do with the Wii. We’re already in training with such devices as the iPod and the iPhone, which rely on touch pads.”
These changes will transform the experience of online searches. Konsynski predicts that “We will be soaring through knowledge networks and knowledge space,” experiencing the Internet in ways we still haven’t fully imagined. “Right now, we’re not leveraging our cognitive abilities,” he says. “It‘s like we’re looking through a tube at a map and we have to move the tube around to see everything.”
Photo: A conference participant simultaneously views the event as it's broadcast on Second Life.