Computer Graphics World

January 2009 28 n n n n Virtual Worlds VRML wars, the attempt to develop a stan- dard format for 3D online, and his com- pany is continuing work on the concept of 3D browsers. Agreeing that virtual worlds have matured in the 10-plus years he's been working in the field, Parisi says, "ey are becoming more diverse and cater to more types of users and more mainstream us- ers. As technologies emerge that allow consumer-friendly virtual worlds running inside a Web browser, the barriers to entry are disappearing." Also, notes Parisi, "the barriers to content creation are eroding." Today, 3D virtual communities are home to millions of people—a rough, seat- of-the-pants estimate based on published figures from the largest sites puts the num- ber at approximately five million. Second Life mogul Philip Rosedale, chairman of parent company Linden Labs, claims Sec- ond Life is growing as much as 10 percent every year. Other analysts put the overall growth of virtual worlds, including gaming sites, at 15 percent per year. Meanwhile, market research company NPD puts the total number of US subscriptions to online worlds at $1 billion. Every virtual world has a slightly dif- ferent focus, and the worlds within these worlds are often very different as well. e three worlds we examined closely for this story—Second Life, ere.com, and En- tropia Universe—all place a very strong focus on creativity, all three have virtual economies that the companies work hard to protect and present as secure, and all three are evolving rapidly as a result of resi- dent participation. Follow the Money In the case of Second Life, by far the largest and fastest growing of the sites, the company has struggled with change on almost every front, and not all of it is positive. e firm has had to ramp up its servers, it has to con- stantly convince the outside world of its secu- rity for young visitors (and, at the same time, it flaunts the raunchier aspects of the world for adult visitors), and it has to contend with a massive redistribution of wealth. As a result of a federal investigation, Second Life was forced to close down its casinos. Moreover, the universe tightened up its banking system, thus causing a con- traction of Linden Dollars, which are po- tentially vulnerable: e Web is alive with anecdotes about denizens being robbed of their accounts. Last, Rosedale has retreated from the CEO post to become chairman. e company isn't talking about why Rose- dale is out as CEO, but officials said they were looking for a new CEO with more operational and management experience, though the money issue could not have helped the situation. Recently, Mark King- dom assumed that role. Most chats with virtual world moguls generally turn back to the money. ey're under pressure to demonstrate the success of their brave, new businesses by making lots of money, and they're also constantly challenged by residents and outsiders to account for where the money goes. If the money isn't controlled, there's the potential for inflation, and if residents are afraid their money will disappear, they won't invest. Entropia's director of business develop- ment, David Simmonds, is proud of the banking system within the Entropia Uni- verse, wherein users can cash out if they want (however, there is no interest earned). According to Simmonds, the Entropia Uni- verse brought in $3.6 billion PED (Project Entropia Dollars), or $360 million in US dollars, in 2006. Sales of Linden Dollars in Second Life, one form of revenue for the company, is about $720,000 a month, or about $8.6 million a year. Marketing and sponsorships represent another major source of money for the virtual communities. Companies like Sun, Intel, IBM, and Cisco use Second Life for information hubs as well as meeting sites. e companies claim that their employees get more out of meetings held in Second Life compared to meetings on the phone because they are "more engaged," and no doubt the novelty is an attraction. However, it's also worth noting that these companies are also selling a bunch of servers and networking equipment to firms build- ing virtual worlds, so they have a vested interest in making the business model for virtual worlds pay off and grow. is is a role these companies have long played in the economy of virtual communities, and it's a valuable one because they help provide an economic underpinning to support other uses of virtual communities. Increasingly, these technology companies are being joined by retailers, universities, and media compa- nies, as well as individual entrepreneurs. Entropia Universe is ramping up to ac- commodate specialized areas within the Many of the virtual worlds focus on creativity, starting with the construction of a unique avatar.

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