Virtual economies & kids

Virtual worlds make their money very differently from social-network sites - mostly from selling virtual objects. Though Disney's Pixie Hollow and Webkinz and Webkinz, Jr. sell real objects such as "friendship bracelets" and plush toys, the economies of most virtual worlds (and multiplayer online games) rely on objects and artifacts such as clothing, furniture, and other property. Social sites, which to date have focused more on display ads, too, are moving into virtual-object retail (see this about Hi5 selling virtual gifts). A figure cited by The Economist indicates everybody may be moving in this direction, though there's much to be learned about this business model. The article mentions that users at a popular VW aimed at teens, Gaia Online, "spend more than $1 million per month on virtual items." Gaia recently hired a full-time economist, The Economist says, "to grapple with problems that are well known in the real world, such as inflation and an unequal distribution of wealth" (maybe child psychologists will need to employed too!). The British news magazine otherwise paints a more measured picture of virtual-world popularity than do other news outlets, but the figure it cites is "regular visitors," not overall registered users. "In America, nearly 10 million children and teenagers visit virtual worlds regularly," it refers to eMarketer as finding. Virtual Worlds News earlier cited data from Strategy Analytics projecting an overall global population of 186 million now, growing to 640m by 2015 (users of all ages - I blogged about that here). My most recent post on VW population is here.

150+ virtual worlds for youth now

If anyone had doubts about rapid growth in the virtual-worlds sector of cyberspace, this should clear them up. There are now more than 150 virtual worlds - either open now or in development - targeting people 18 and under, up from around 100 just last April, according to Virtual Worlds Management (VWM). [The full list is at that link, though the definition of "virtual world" seems to be broad - I noticed one site that's largely avatar chat, not a whole "world."] "In all there are 95 youth worlds currently live. Another 68 are in concepting, development, or testing phases. Tweens' worlds (for ages 8-12) lead at 88 of the 150+, kids' (7 and under) come in second with 72, and teens' third with 60. Disney alone has nine in development, VWM reports. The New York Post cites eMarketer research showing that estimate that "more than half" of all online youth 3-17, or about 20 million young people "will visit virtual worlds by 2011, up from 34%, or 12 million, this year." Here's some analysis about the VWM report from its authors. I noted a comment in it about virtual worlds "aging with their users" from Craig Sherman, CEO of Gaia Online, a world targeting 13-to-18-year-olds. He told VWM that 30% of Gaia users were now 18+ and the site had, "accordingly, grown a little edgier" (inevitable, undoubtedly, but something for parents to be alert to, with kids and adults sharing an online community). It's logical that people wouldn't suddenly drop away from a site targeting youth just because they turned 18.

For a whole range of man-on-the-street views of virtual worlds, see this fun video from Global Kids in New York, or read coverage of a conference in youth learning in virtual worlds last fall from CNET. See also my recent item on ways kids have found to game the system in virtual worlds, sometimes for the purposes of cyberbullying.