Twinity has announced that it has been awarded funding by the government of Singapore for its development of a virtual equivalent of the city. Twinity is a virtual world which aims to create virtual replicas of the leading cities of the world. They have already built Berlin, with Singapore and London next in the pipeline. For more background, check out my interview with Twinity's Chief Marketing Officer from our Unplugged gathering earlier this month. As part of the deal, Twinity will also be launching geo-tagging capabilities in the virtual world. Presumably this will involve media assets, such as pictures or videos, of real world places being connected to the virtual equivalent in Twinity.

The aspect of the announcement which most interests me is the fact that that they have attracted government funding for this. Metaversum are quite open about the fact that developing mirror worlds is an expensive operation – a potential disadvantage against competitors such as Second Life which can mostly rely upon users for content generation. If Metaversum could attract local government funding for development of more cities, that could go a long way to alleviate the problem. Whilst I'm sure many governments would not be easily persuaded to put money into a virtual world, some could embrace it, perhaps as a tourism marketing exercise or to help in a real world regeneration effort by improving the virtual environment first to create a buzz around an area.

"We're very excited about being awarded funding for launching virtual Singapore, geo-tagging and our other Co-space™ projects. We see it as recognition of the strategic importance of a real context for virtual cities for city authorities and local business alike," commented Jeremy Snyder, Managing Director of Metaversum Asia Pte Ltd. He continued, "We look forward to helping Singapore transform itself into the virtual information and communication hub for Asia."

Muxlim, a social network and community for Muslims, has announced that it is to launch a virtual world for its users in the next few weeks. Muxlim aims to provide a virtual world that is suitable to the cultural expectations of Muslim people and (in some cases) governments. It will not, for example, include sexual content and will provide opportunities to 'wear a hijab and go to prayer rooms'. This is in response to a ban on virtual worlds currently in place across the middle east, including in comparatively liberal countries such as the United Arab Emirates.

Does a separate virtual world for Muslims make sense? I think it probably does. The internet is often dominated by broadly American (and certainly western) culture, which of course takes its roots predominantly from Christianity rather than Islam. Assumptions which might be made perfectly reasonably by a US or British virtual world developer may significantly reduce that virtual world's value to users who do not consider themselves part of Western culture.

Second, the existence of flourishing Muslim communities outside the Middle East seems to demand a tool to join up all of these communities to facilitate the international Ummah – Muslim community. Whilst as a non-Muslim I have little feel for the extent to which this second factor would be a real driver of adoption, on an academic level at least the idea of using technology to enhance both cultural and religious connections between a worldwide community seems fascinating. And the size of the market is certainly not a problem, with over a billion adherents to the religion worldwide.

[via]

Linden Lab and Rivers Run Red have announced that Immersive Workspaces is now on the Second Life Grid. Immersive Workspaces is an enterprise solution for a virtual business environment, in which users can have meetings or share content, for example. The fact that it is on the Second Life Grid enables businesses to take the decision regarding how much connectivity to the Second Life mainland they want – they can either have it fully integrated or keep it as a secure and separate facility.

At the Virtual Worlds Forum in London earlier this month, I lost count of the number of delegates from different enterprises who were bewailing the lack of business-friendly features on Second Life. Given Linden Lab's ambitions in what will clearly be a very important part of the virtual world market, this is something they need to address. It is a substantive problem as a perceived problem. It is not, at the moment, possible to have a Second Life instance behind a firewall – something many CIOs demand before they will consider adoption. Linden says that this is on the way in Q1 next year, in an important step.

Another problem is the lack of control. One delegate from an enterprise explained to me that it was not possible for them to use Second Life at present because of the inappropriate content elsewhere on Second Life; if they required an employee or client to download the software, and (for example) sexual content was encountered, that enterprise believed it could potentially be held liable for that content. The Second Life Grid will to some extent alleviate that, as a Second Life area, separate from the mainland and all other content, could be used.

Sports brand Reebok has announced that it is to advertise in forthcoming MMO Football Superstars. Football Superstars is a free-to-play MMO created by British firm CyberSports and developed by Nottingham-based Monumental Games. Players enter a persistent virtual world, in which they must achieve football greatness. The game encompasses both football matches themselves, and the rest of the life of a virtual football superstar. It certainly seems like a premise which could gain significant traction: wildly popular football games such as Pro Evolution already include some aspects of strategy beyond simple football game play, and the persistent virtual world aspect to Football Superstars is likely to make that dimension far more meaningful. The fact that it is free-to-play also puts it at a significant advantage versus the expensive titles currently dominating the space.

The off-the-pitch aspect to Football Superstars opens up two key business models – advertising and microtransactions. Players can visit shops and purchase virtual kit and equipment. This is where the Reebok deal announced today fits in. It appears that Reebok-branded virtual goods will be available for sale. On top of that, Reebok will be running a competition, as part of their 'Ambassadors Programme', to find an amateur to form a professional-style sponsorship deal with. This would include real and virtual Reebok gear, among other perks. Reebok are also going to be on virtual advertising hoardings, although that seems to be such an unimaginative way to advertise in virtual worlds given the breadth of innovative and more successful opportunities available.

Andy Law, Head of Business Development at CyberSports, said: "This is a great deal for us and Football Superstars. Reebok are a high profile and firm favourite football brand and they will bring an even more realistic dimension to the game play, blurring the reality between the virtual and the real worlds which is what Football Superstars is all about."

The argument that microtransactions could see a real boost seems strong to me. It is obvious that not everyone loses out in an economic slowdown; in the real world I would expect Aldi (a discount supermarket) to do very well, and Waitrose (a relatively expensive, high quality supermarket) to perform more weakly at the moment, for example. The same could apply as a user decides not to buy that Nike outfit on the high street, but to buy its virtual equivalent in-world. Microtransactions are very cheap, and still provide a feel-good-factor. Similarly, if virtual worlds can position them as a cheaper alternative to going out in the real world, they could see some benefit from tightening of belts.

The risk, though, is surely that other sources of revenue dry up. Surely it is possible (and perhaps even likely) that significant numbers of users decide to abandon their subscriptions to MMOs. It also seems probable that new purchases will fall. We may see an increase in free casual games as users want to spend their time on the computer more cheaply.

The credit crunch and the consequent meltdown in the financial system over the past month seems sure to have consequences in virtual worlds. No country has been hit harder in this financial crisis than Iceland, with many key banks in dire straits. It's no surprise, then, that speculation has been building up about whether Eve Online, an Icelandic MMO (see my interview with Arend Stuhrmann from last week), can survive the tough times. Today, Hilmar V. Pétursson, CEO of CCP (Eve Online's creators) has addressed concerns on his blog.

In a nutshell, Pétursson argues: "CCP is fortunate enough to be well isolated from the current banking crisis we see around us on both sides of the Atlantic (and here in the middle of it, of course). Not only do we enjoy the privilege of a global customer base bringing a diverse array of cultural influences into our single shard world of EVE Online, but that same diverse nature inoculates us from short-term fluctuations in sentiment or economic turbulence."

The whole of the Icelandic economy is sure to suffer the aftermath of this crisis, and it seems inevitable that Eve will be totally immune from the impact. But Pétursson is probably right; Eve has a global user base (so global consumer spending, for example, will be more relevant than Icelandic consumer spending). I would argue that virtual worlds are, structurally, a strong prospect for growth, even if that is slowed by the economic cycle somewhat. Where the impact of economic troubles might be felt more acutely, though, is in-world economies. It will be fascinating to see whether a measurable slow-down occurs in conjunction with the real-world slow-down.

Dubit Research has produced an exclusive report for the Virtual Worlds Forum giving key statistics for how tweens use virtual worlds and their attitude towards advertising. Dubit Research, a youth marketing agency, runs a standing panel of 600 7-12 year olds in the UK, and has asked them a series of questions relating to which virtual worlds they use and how they feel about advertising in virtual worlds.

The results show that 73% of British 7-12 year olds are using some sort of virtual world. Club Penguin leads the pack with 43%, Habbo following with 27%. There is remarkably little fragmentation in the market: only 8% use a virtual world other than the top 10. What surprised me most about the statistics is how even the gender split is on many virtual worlds – entirely even on Club Penguin, and similar on most other games, although Runescape is, as one would expect, far more popular with boys.

In my interview with Richard Bartle last week, he argued that the reason children play virtual worlds to a far greater extent than adults is because they are simply more comfortable with a new form of media, rather than because virtual worlds are inherently more attractive to children. His thesis was that 'the mainstream will come to virtual worlds' as the children literally grow up. Yet that isn't an argument that seems to be supported by these statistics. There is a clear drop off in the percentage who visit virtual world usage after the age of ten, rather than a sustained level. This is far from conclusive, however, since it is entirely possible that not as many current 11 and 12 year olds are playing virtual worlds for precisely the same reasons that adults don't – because they were older when they first appeared. Only after a few years of this kind of data will we be able to come up with some conclusive results.

There are also some statistics on advertising. On the downside, only 45% of kids definitely remember noticing advertising, suggesting that it is often missed. The good news, though, is that about 70% of those asked rate brand presence in virtual worlds as 4 or 5 out of 5, indicating at least a lack of antipathy.

Download Report

The report's author, Yuanzhe (Michael) Cai, argues that in order to achieve this substantial increase, 3D virtual worlds need to abandon user-generated content: "Without appealing content and applications, virtual worlds are nothing but empty shopping malls. The industry needs to move beyond its obsession with user-generated content and make 3D virtual worlds more interesting to average consumers." That's all well and good – it's easy to see why 3D design and user generated content don't necessarily go together at the moment, given how hard it is to create a 3D object relative to shooting a video or posting a twitter. But would 3D worlds really amount to much without UGC at the moment? Professional content at its most successful in 3D virtual worlds needs to be monetised – usually through microtransactions for virtual goods. Yet there's no evidence to suggest that 3D virtual goods are any more lucrative than 2D virtual goods: Stardoll does just fine without full 3D works. So if users don't like UGC in 3D worlds, and they're not bothered by whether their professional content is 2D or 3D, why bother with 3D at all?

Of course, the answer to that question is that 3D promises to provide far more immersive experiences. Clearly 3D worlds have a very strong future, but not unless they offer something beyond the possibilities of 2D worlds. Providing more exciting possibilities for user-generated content is one way in which 3D worlds could differentiate themselves.

Why is that? One suggestion was that the reason that virtual worlds don't yet have a place in the workplace is because they rarely have a place in the home (at least anywhere other than the child's bedroom). Social networking, starting to make its way into the enterprise, certainly started as a consumer phenomenon, and virtual worlds is closely related to this. If businesspeople aren't entirely comfortable with virtual worlds as a consumer, how could they be expected to embrace 3D worlds and avatars and even flying in the enterprise? IBM's Kevin Aires pointed out how alien virtual worlds often are, even to IBM salespeople: 'With converting sales people [to virtual world users], you spend the first ten minutes explaining that there's more to virtual worlds than Second Life.'

I don't think that the lack of consumer adoption is really what is holding back enterprise virtual worlds, though. Email, for example, was a business tool before it was a personal tool. Blackberries overcame the technophobic tendencies of millions of middle-aged men and women of the 'I just want my phone to talk and text' school of thought to become the instantly recognisable badge of a commuter. History shows us that businesspeople can 'get' new technology very quickly indeed, whether or not they have experienced it as a consumer. What determines adoption is not something fuzzy like how comfortable people feel with the concept, but about the business benefits.

And the truth is, the business benefits just aren't clear enough yet. There's the issues of security, of user interface, of development costs, of old business client hardware to name but a few. These can and will be solved in the near future, and enterprise virtual world providers certainly don't need to wait for consumer virtual worlds to get their act together to experience huge rewards.

Avatar chat application Visitoons has announced that it is to officially launch worldwide on 15^th October, although the site is available now. Visitoons has been available to the Spanish-speaking market since July of this year, and has now launched a global service, in addition to a development platform for third parties. Visitoons is an application which is designed to be embedded by a site owner. It will then allow users either to chat in a 2.5D environment, or in a Rocketon-style overlay, on top of the website.

The case for a site owner installing some sort of avatar chat application is clear. It could foster a stronger community around the site, hopefully making it more sticky and certainly creating greater engagement with the brand. If done with a more heavy-weight solution, then a company could leverage a tightly integrated virtual world to sell virtual goods, for example, perhaps even making decent money. There is a whole spectrum of providers catering to this space, however, so Visitoons will have a tough time gaining decent traction. On the expensive end, Webflock is a 2.5D platform developed by Electric Sheep which can build a virtual world for a 'six figure sum' – this requires no plugin other than Flash. Another option might soon be Lively; it's already possible to embed a Lively room into a 2D website, and with an enhanced platform on the way, that could become an even more attractive option (although with the need to download an extra plugin – a potential barrier to adoption). Rocketon is slightly different, in that it is a web-wide virtual world, which allows users to control avatars on top of web pages, chatting to others and operating the site.

Visitoons' plans for its API aren't totally clear, but it appears that the flexibility is mainly in the ability to alter the 2.5D environments. From the press release: The Visitoons Platform has been specially developed to allow the creation of highly customized virtual environments using a variety of forms of art, including illustrations, photography and 3D renders, and not just only 3D models resembling online games. This will enable businesses to present their brands in the most appropriate ways, allowing for traditional creative professionals and existing marketing teams to tackle the quest for developing branded Virtual Worlds, as no special 3D design or programming skill is required.