virtual worlds in asia

Virtual Worlds in AsiaTrends and Expectations

Shaping and Governing the 3-D Internet

Benjamin Joffe, CEO | Plus Eight Star | Beijing, 2009.03

EU-China Information Society Project

Foreword

ベンジャミン

本杰明

벤자민

Benjamin Joffe

4 years

1 year

4 years

www.plus8star.com

China | Japan | South Korea

Cross-Market ConsultingTelecom & Internet Innovation

26 events | 98 speakers | 3,296 members | 1,440 companies

1. What is a virtual world

2. What are their origins

3. What’s the market situation

4. What are the trends

5. What are the legal challenges

6. More complexities

7. The digital third place

I am going to talk about

for 60 minutes

Chapter 1.What is a

Virtual World?

Before getting started…

Questions

Who uses Internet (almost) every day?

Question 2Yesterday

Virtual World?

Problem 1What does “virtual” mean?

3D Analog WorldWithout Server Lag?

Online / Offline

Offline OnlineIn-

between

Digital Immigrants&

Digital Natives

Offline Audience: 300

Online Audience: >30,000(and counting)

Factor 100!

Online + Offline = Life

Problem 2What means “world”?

Avatars?

Video

[Superbowl Ad]

Key elements

(1) Reach(2) Reputation

Definition

Persistent environmentSynchronous communication

Personified users

Chapter 2.Origins of

Virtual Worlds

1981 1984 1992

The Matrix (1999) Ghost in the Shell (1989)

LambdaMOO (1990)

Habitat (Lucasfilm, 1986)

Kingdom of the Wind (Nexon, 1996)

EverQuest (Sony, 1999)

Virtual World Types

PlatformCommunity

GamingBusiness

Chapter 3.Market Situation

“It’s complicated”

>150 virtual worlds

In 2008, over US$580 millionwere invested in 41 virtual goods-

related businesses.

Source: Virtual Worlds Management

Is it a business?

Revenue Scale

Online games = x 1,000 millionSocial networks = x 100 million

Virtual worlds = x 10 million

However: Convergence

Online games have revenuesSocial networks have loyaltyVirtual worlds have appeal

2D Worlds

Europe & North America

Daily Users: 495,210Monthly unique users: 6.6 million across Facebook & MySpace

Service Registered users Revenue 2008 (E) Valuation (E)

Habbo 100 mln 50 mln USD 1.25 bln USD

Gaia Online 7 mln UV/month 10 mln USD n.a.

Stardoll 20 mln 30 mln USD 450 mln USD

Club Penguin 12 mln 50-150 mln USD 350-700 mln USD

South Korea

Japan

Service Registered users Revenue 2008 (E) Valuation (E)

Cyworld 22 mln 200 mln USD n.a.

Mobile Game Town 12.6 mln 250 mln USD 1.4 billion USD

Gree 8 mln 60 mln USD 1.2 billion USD

Nicotto Town 100,000 n.a. n.a.

China

3D Worlds

Europe & North America

(60% Made in China)

Japan

Internet Adventure(by SEGA)

Meet-me

Video

[Mii TV ad - 2007]

PS3 “Home”

25 million Xbox 360 consoles getting

software upgrade?

South Korea

Video

[Nurien Demo]

China

Chapter 4.Trends

Trend 1Away from Second Life

2005 2006 2007 2008 2009

Mainly Second Life adaptations

Gaming virtual worlds

Variety of concepts and

revenue models

2D worlds

2D dating

Trend 2Browser

3D2D

Bro

wse

rC

lien

tH

ybri

d

Trend 3Virtual goods

Business models

• Virtual real estate

• Virtual currency

• Virtual goods

• E-commerce

• Advertising

• Platform licensing

• Content creation

Chapter 5.Legal Aspects

Trademarks

Patents

Forterra (There.com) vs. IMVU

Prior Art

Worlds.com vs. NC Soft

“System and Method for Enabling Users to Interact in a Virtual Space”

(7,181,690)

Will patents hurt the market?(“1-click” patent case)

Copyrights

Who owns what?

Facebook’s Terms of Service (TOS)

• “We reserve the right, at our sole discretion, to change, modify, add, or delete portions of these Terms of Use at any time without further notice.”

• Chronology of the TOS-gate– 2009.02.15 | Change in TOS – Facebook can do

whatever it wants with the content– 2009.02.15 | Users uproar– 2009.02.17 | Back to old TOS– 2009.02.26 | Opens its TOS for input from users

Terms Of Service (TOS)vs.

Regulation

Copyright? Civil rights? TOS?

Second Life Interview Incident

USA: Digital Millennium copyright Act (DMCA)

EU: EU Copyright Directive(EUCD)

Subpoena?

Fair Use?

If the effort it takes to file repeated claims is greater than the effort to create an account and repost a video, then certainly something is flawed.

My expectation would be that Linden Lab swiftly research that problem and close that loophole.

Otherwise it would raise questions about how ready Second Life actually is for professional use.

Video

[User-Generated Music Video]

Commerceof Virtual Goods

400,000 Gold Farmersin China & South Korea?

Identity Management

The New Yorker, 1993

“On the Internet, nobody knows you’re a dog.”

Wired, 2005

“On the Internet, nobody knows you’re a bot.”

“Glider is a tool that plays your World of Warcraft character for you, the way you want it.

It grinds, it loots, it skins, it heals, it even farms soul shards... without you.”

Singleaccount

Multipleaccounts

Use ofBots

Sharedaccount

Shared accountUse of Bots

Whose persona?

Online & Offline Identities

Real namePen name

Anonymous

Identity dependson the social circle

Chapter 6.More Complexity

Regulating virtual worlds is already complicatedfor service providers

There.com CEO joins the conversation…as a voice over his avatar

Video

[Fix8 Demo]

Obama Outfitted With238 Motion Capture SensorsFor 3-D Record Of Presidency

…or not.

Howard Rheingold

ClayShirky

LawrenceLessig

Chapter 7.The Digital

Third Place

What is a third place?

Economic activities

Creative activities

Cultural products

Social environments

Digital Third Place

AfterwordWhat Next?

Necessary skillsfor the future?

Business is onlineOnline identity & reputation

are most important

Increase awarenessof the risks

and how to avoid them

Celebrate the benefits

About +8*

There are more ideas outside your country

than inside

Tom KelleyCEO, IDEO

The 10 faces of Innovation

“Innovation Arbitrage”

• About us– +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia.

– We provide local expertise & global perspective on mobile and Internet innovation from China, Japan and South Korea to add value to and accelerate the development of our clients’ businesses.

• Our services– Analysis of proven best practices and business models from Asia

– Other services: executive study trips, market entry strategy, M&A advisory, partners identification, negotiation support.

• Founder & CEO: Benjamin Joffe– 9 years experience with mobile & Internet in Asia

– Selected among “China’s Top 100 mobile industry influencers” in 2007

– Regular speaker at events on mobile and Internet in Asia

– Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and Spanish

Selected References• Adidas | E-commerce strategy for China, Japan & Korea

• Bouygues Telecom | Cases studies of leading Asian Web 2.0 services and virtual worlds

• Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet convergence strategies

• Hemisphere | Analysis of mobile marketing best practices in Japan and South Korea (Hemisphere is a leading digital advertising agency), analysis of leading social platforms (SNS, virtual worlds, online games).

• Microsoft | Analysis of Japan’s key players and market catalysts for mobile commerce market positioning in China

• DeNA | Case studies of the best practices of leading social networks in China and South Korea (DeNA operates Mobile Game Town, Japan’s leading mobile SNS service)

• China Mobile | Benchmark of Korean leading online communities

• Sands Capital Management | Evaluation of China’s investment opportunities in social networks in China

Social Contribution

• Mobile Monday– Founder of the Mobile Monday forum in Beijing since 2006 (3,000+

members, 23 events, over 80 presentations).

• Media– Monthly column on Asian innovation for Asian Business Leaders (one of

the leading Chinese business magazines), numerous interviews in international media.

• Events– Regular keynote speaker and moderator at Internet, Telecom, Media and

Investment events

e.g. eComm, ITU Asia, Asia Venture Capital Forum, China Mobility International Summit, O’Reilly’s Graphing Social Patterns, Red Herring Asia, Media 08 Conference, Wireless Developer Forum, Open Web Asia, XMediaLab, Mobile Monday Global Summit, etc.

www.plus8star.com

benjamin@plus8star.com

benjamin0123

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