Wednesday, August 10, 2011

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KZero Reports Total Virtual World Accounts as 1.4 Billion - But Actual Virtual World Users Are Much Less Than That

KZero Registered Virtual World Users

KZero, a UK consulting firm specializing in virtual worlds, recently released a chart of registered virtual world accounts, and while it's interesting, many people misread what the chart shows. The firm reports that total registered accounts in virtual worlds has grown to nearly 1.4 billion, which is easy to interpret as actual user growth. For example, Hypergrid Business uses the chart to claim "Virtual world usage accelerates". But when you look at the activity of specific virtual worlds in the chart, you see a very different, very mixed picture.

To take some examples KZero mentions:

  • In Q2 2011, Habbo gained 20 million accounts to 220 million total -- however, in press releases, last December, Habbo reported 15 million monthly active uniques, and last February, reported just 13 million monthly active uniques.
  • In Q2 2011, IMVU gained 5 million accounts to 55 million total -- however, as the CEO told me last June, IMVU actually has 3 million active monthly users.
  • KZero's chart notes that Disney's Club Penguin has 70 million total accounts. However, last May, the Times reported that the world's growth was dropping, then down to 6.7 million monthly uniques.

And as NWN readers painfully know, Second Life now has tens of millions of registered accounts, a number which keeps growing, but less than a million monthly active uniques, a number that hasn't significantly changed for over a year. So total actual users are not at all the same as total accounts, which don't tell us much about which world is really growing, or for that matter, whether the virtual world category as a whole is growing. At the moment, Club Penguin and Habbo Hotel seem to have flat or slow growth, while IMVU is indeed growing (but with monthly uniques still a small fraction of total accounts.)

If anything, KZero's chart is probably most reflective of churn, i.e. consumers (mostly kids) trying one world, hopping over to another, trying out another world, going back to an old one with a new account, and so on. If I were to make a very rough guess, I'd estimate just 5-10% of KZero's 1.4 billion number represents actual, unique, monthly active virtual world users: I.E., somewhere between 70 million to 140 million. That's a pretty big total audience, but just counting total account numbers makes it very difficult to see what worlds that growth is really coming from.


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Maddy Gynoid

The new Gartner Hype Cycle 2011 shows that virtual worlds are not as popular as one could expect with the data from KZero.

Just as last year, virtual worlds are at the deepest point in the valley of disillusionment.


Movies these days are often in 3D in the theater, with amazing computer generated effects. My guess is that 3D virtual worlds will pick up in interest when:

* You can actually see them in 3D, which very few people can at present due to lack of hardware and software, and

* The graphics quality approaches what people expect from their other forms of entertainment

Arcadia Codesmith

These are cumulative numbers, because in free-to-play worlds, old accounts never go away.

Shhhhh. Don't tell. That's a dirty little secret that free-to-play advocates don't want you to know. Most of the impressive numbers of F2P are deadwood accounts. They don't pay, they don't play, but they pad the statistics nicely.

Growth is not infinite, nor is it always desirable. Perhaps its time to shift focus away from growth and towards sustainability.

Hanno Tietgens | Xon Emoto

Hamlet, you have a good point. It would be great if KZero could add some data on usage. Still, I really appreciate all the research and information they have been sharing for all these years now, much of it for free.

Maddy, last year VWs were pretty much in the same position on the Gartner Hype Cycle, addressed as "Public virtual worlds", if I remember that right. Back then I argued that – if this were the quote for any share on the stock market – it would be a perfect point for any investor to jump in, because you can only go up from there.

Seeing the "public" dropped and still no progress whatsoever in 12 months is a bit disappointing. But it actually mirrors Hamlet's figures (and the feedback we got for most of this time period from our audiences at conferences and presentations, and our active project partners for instance in the "Campus Hamburg in 3D" project).

In the past few months, though, amount and quality of the interest we experience presenting virtual 3D worlds for teamwork and immersive education are both picking up. I really expect to see the topic on the "Slope of Enlightenment" next year. After all, single projects like TÜV NORD in 3D (and IBM, and so many others) have already made it to the "Plateau of Productivity" – years ago.

Danielle, I'm with you when it gets to the graphics, and I guess this will be true for all types of VWs, kid's worlds included. But I don't expect too much impact from stereoscopic 3D TV or games; feedback and sales have been quite slow so far.

In our projects, it turned out that individual acceptance of the avatar as an interaction interface is of utmost importance. So I think what's going to help the most is making avatar access as easy as in the Campus Tour created by Andrew Hughes and his team at Designing Digitally based on Unity3D: Or the access provided by Reaction Grid in JIBE ('Pathfinder' John Lester's 3D space here via Unity plugin: ).

Or SpotON3D taking the full Second Life / OpenSim functionality straight to your browser and even inside Facebook: Only a PC or the old-style viewer will get your avatar on the SpotON3D sims in the browser for now, but they say Mac and Linux are to follow.

Much more on all this to be found here at New World Notes!

Add all the great innovation coming from the likes of Tipodean, Kitely's Virtual Worlds in demand etc. ... and it's definitely going to be an exciting year until the Hype Cycle 2012 will be out.

Nic MItham

Thanks for the comments Hanno.

As you point out, just as Wagner has offered his insight for a long time, since 2006 we have strived to produce a wide range of analysis and research into the VW sector and provide it for free. In fact, we only have one report that we charge for - and we rarely promote it.

Going back to the point about registered users vs other data-points, I'd like to stress that we always clearly indicate that the universe chart (and related data) is based on total/cumulative registered accounts - not active users, not monthly uniques, not just 'accounts' but cumulative registered accounts.

We leave it to other people/organisations to interpret our data and create the buzzy headlines. Some people interpret our data with positive spin and others spin it in other ways. It's also a shame that some people take an apples and oranges approach when discussing our findings, particularly when pulling in monthly uniques data in comparison to cumulative reg accs - these are two different metrics - keep them separate or relate them in meaningful and intelligent ways.

Either way, regardless of what others might claim, the virtual worlds sector is growing - less in the older segments granted, but for younger KT&T sectors the growth remains strong. No-one can dispute this growth.

Rounding off on your point about usage, of course we have active user data (we even have paying user data), but as you'll hopefully appreciate, we wouldn't have a very good business model if we gave 'everything' away for free.

Hamlet Au

Thanks for the background, Nic. So if you have data on monthly uniques, can you confirm (or not) that 70-140 million is a good estimate of actual virtual world users?

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