In the old days, anyone who used technology frequently was pretty much labeled a nerd (geek, dag, dorc). Now even the cool kids do it. What a difference a decade-plus of Internet and mobile makes. Technology is everywhere. I wonder, is this trend going to start changing the basic shape of the technology adoption curve, especially as the Internet generation ages to positions of budgetary power?

It is important to note that while more people use technology, the population does not care any more than before about how or why technology actually works. They just want it to work.

Our job in the virtual worlds space is to focus on the essentials and not over-indulge in the new-new shiny. I feel chastened by being too far ahead of the market over the last couple of years. My own interests have focused a lot on avatar-to-avatar interaction — in other words, real-time human communication. We need to zoom in on the simplest set of interfaces and features that enable communication and expressiveness, and stop ourselves before those interfaces and features run amuck and turn counter-productive.

We’re still hunting for a right middle ground between the over-simplified, non-immersive and the over-complicated full-3D glitz. While I love the full-3D glitz, I am guessing that it is going to take some time before human-computer interfaces and human-understanding/training meet in the middle.

PS it is hard to talk about all this technology ubiquity without a little Cheezburger:

more cat pictures

Forbes has an opinion piece from Gartner analyst Adam Sarner about a new kind of demographic breakdown: Generation V, for Virtual (thanks Greg Verdino for the link and thoughts on the piece). Rather than focusing on Gen Xers versus Millenials, Sarner’s argument is that “general behavior, attitudes and interests start to blend in an online environment” across age groups. He writes:

As more baby boomers (who are living longer) and young people go online and participate in a flat virtual environment, the generational distinctions break down. Customers will hop across segments at various times for various reasons and are likely to act like several generations at any given time…

While traditional wisdom has focused on customer identification for one-to-one targeted marketing campaigns, cross-selling and so on, the reality of Generation V members using multiple personae (e.g., Amazon reviewer, eBay seller, Second Life avatar “World of Warcraft” blood elf, digger, blogger, YouTuber)…

…business intelligence and analytics markets will shift from collecting demographic information to psychographic information to better understand these various personae and their behaviors…

Companies will create multiple interactive, virtual environments as a way to orchestrate customer exploration toward purchases.

Not surprisingly, I agree with the latter point. In particular, I believe that these virtual environments will increasingly show up directly on company’s websites, rather than outposts in existing virtual worlds. Since Generation V participants expect conversation and participation, rather than broadcast, websites will evolve to foster this, both asynchronously and in real-time.

I also agree with Sarner’s statement: “To digital natives and Generation V, this is not technology–merely the stuff they use on a day-to-day basis.” I think that is exactly right. The technology has to get out of the way, so that this stuff is easy, accessible, and focused on the experience.

The piece has a lot more than I’ve touched on here, so highly recommend that you read it.

• Sibley discusses the Forrester report on virtual worlds
• AllFacebook discusses a possible downturn in Facebook platform developer activity, based on stats gathered by 20bits
• Lightspeed points to a white paper on in-game inflation
• Gary Koelling discusses “Blue Shirt Nation”, the skunkworks internal social networking experiment for Best Buy

Ad Week published an article on Pepsi’s branding experience in Virtual MTV, with results from a study conducted by Harris Interactive and MauroNewMedia. Pepsi right out admits that they sponsored vMTV in the early days based on gut feeling, rather than empirical data, and they have been pleased to see the results back up their intuition. We’ve been working with MTV on the virtual experience and sponsor integration since the beginning, and it is nice to see some of the positive results coming to light.
Ad Week writes:

Among the findings was that Pepsi’s positive brand image traits increased dramatically among fans who not only watch the show but browse The Hills content online, where Pepsi runs 30-second spots and banners. Positive brand image increased even more among fans who played in The Hills virtual world as well. (The average time spent there, according to MTV, is about 28 minutes per encounter.)

The numbers show that among the 240 fans who watched only the on-air version of the show, about half said Pepsi promotes music events and supports music artists, while less than 30 percent said the brand was in touch with youth culture. About 15 percent of the TV-only watchers consider Pepsi “cool” or “hip” while about 1 percent indicated that Pepsi exposed them to the latest trends, styles and fashion.

But those numbers skyrocket among fans who watch the TV show, go online and enter The Hills virtual world. Upwards of 90 percent of those viewers said Pepsi promotes music and recording artists, while almost 70 percent considered the brand to be both in touch with youth culture and cool or hip.

And Pepsi’s products were a hit with participating consumers in MTV’s virtual world. The soft drink was the top-selling product in 2007, moving more than 110,000 cans that were virtually recycled and used more than 650,000 times. The cans were also seen in use over 2.4 million times by 85 percent of the user base, according to the study. “Those are very high numbers,” said Pepsi’s Vail. “To have people in-world using their virtual MTV bucks to buy Pepsi at those rates was amazing to us.

The study also segments users into categories such as “seekers”, who go online to devour content about the TV show, which represented 54% of study particpants, versus “generators”, who blog and text message and actively talk about the show, which represented another third.

Someone asked me the other day when was the best time to launch a virtual world. Swords dug up an old Ren Reynolds Terra Nova post from 2004, when Ren asked the question for MMOGs. An amusing answer is “before you run out of money”, but let’s say that money isn’t the primary issue.

• If your demographic is young kids, Betsy Book of There.com argued in 2004 (and she remains consistent to this day!) that it is best to launch in early summer when kids are out of school. I have also heard arguments that parents are more lax in summer, permitting greater doses of online entertainment.
• If you are trying to tie your virtual world to a retail product, then launching in time for the Thanksgiving-thru-Christmas window is probably a smart move to give your real-world product the best chance to compete.
• If your demographic is college kids, conventional wisdom seems to say launch just before a new semester starts, when students are past the crunch of exams and yet are still in school which helps word of mouth.
• If you are targeting adults, summer seems to be a slow-down period (this is certainly a trend we saw in Second Life for several years), so early spring or early fall are probably the best bets.

We pulled up US Internet usage to see if there were any noticeable trends, but Comscore’s figures for the last 12 months do not show any serious lulls in activity. I’ll share the graph for the curious.

I am continuing to poll industry folks on their experience with seasonality. So, virtual worlders out there, what have you seen and what do you think?

ESC is currently on the lookout for an Art Director, a Software Engineer, and Maya/3DStudioMax freelancers. The first two are full time positions and the 3D artist gigs are freelance. If you are interested in the convergence of virtual worlds and the Web, and fall into one of these camps, we would love to talk to you about our direction and the opportunities at ESC. I have listed more information about the job openings below the fold, and you can reach us at recruiting - at - electricsheepcompany.com.

ART DIRECTOR

You’ve held a senior artist or director position responsible overseeing a team of artists across multiple projects. You’ve been a freelancer and know what it’s like to work for an on-staff art director. You are a gamer and have accounts on multiple virtual worlds and social networking sites. You are ready to invest a substantial portion of your time and attention building a startup business.

Responsibilities:

• Set and direct visual standards and ensure visual quality across key projects
• Create concept sketches of virtual environments, architecture, avatars, and objects in a variety of styles appropriate to multiple ages
• Execute detailed layout mock-ups for 2D and 3D virtual environments, architecture, avatars, and object design using a variety of tools, methods, and styles
• Create concept designs, wireframes, and production-ready art for game and virtual world user interfaces and web pages
• Present work internally and externally to clients
• Collaborate with Technical Director to maintain technical guidelines
• Work with our Producer team to ensure that art pipeline process is efficient and conducive to meeting deadlines

Capabilities:

• Minimum 6-7 years art experience with a focus on web, game, and/or interactive design
• 2-3 years of art director experience
• Virtual world (or other 3D) design and implementation experience desirable
• Experience with large-scale new media productions
• Proven experience communicating effectively with major clients
• Expert in Photoshop, Illustrator, or equivalent
• Experience creating art assets for Flash projects.
• Experience in Maya, 3DMax or equivalent preferred

Samples:

Please send samples of your work including concept sketches, mock-ups, 3D environments, characters, graphic design, fine art, machinima, live sites, Flash. You can reach us at recruiting - at - electricsheepcompany.com.

. .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. .

SOFTWARE ENGINEER

We are looking for experienced software engineers to create compelling 2D, 2.5D, and 3D virtual worlds and multi-player games. You will:

• Develop web-embedded virtual world front-ends
• Contribute to multi-player server development as needed
• Make code contributions to open source projects as appropriate
• Stay current on the latest developments in virtual world platforms and social technology

Qualifications:

• BS in Computer Science or related or equivalent experience
• 5+ years of software real-world development experience
• Experience with network architectures/protocols and asynchronous programming and I/O
• Low-level programming experience (manipulating bits & bytes directly)
• Good grasp of 3D programming and related concepts (3D geometry, texture mapping, matrices, etc)
• Good grasp of multi-player gaming and related concepts (physics, animation, AI/NPCs, etc)
• Comfortable working in a highly distributed, agile team environment

Bonus points:

• Flash/AS3
• C#/Mono, Java, and/or C++
• Development, design, and consumption of web services
• Specific game engine or game engine components (e.g. Torque, Unity3D, jMonkeyEngine, ODE, Ogre, etc)
• Specific virtual world experience
• Prior contributions to open source projects
• Agile development experience

Please send a resume to recruiting - at - electricsheepcompany.com.

Forrester, publishers of business and technology research, recently published “Web3D: The Next Major Internet Wave.” I wish it were freely available so that I felt in the clear to dissect it in great detail here, but understandably Forrester has to make money by charging $279. Here is a little free commentary on the report, though.

The first half of the report is not interesting to those of us in the industry, as it’s a very high level overview of some of the applications of virtual worlds that will eventually be used in enterprises. You know the drill - in 5-7 years (it’s probably been 5-7 years for 15 years now) companies will be more innovative and efficient by using virtual worlds for training, simulation, improved remote collaboration, 3D presentations of data and prototypes, and remote sensing and control of infrastructure. While many of us could write a version of that content in an afternoon, if you need a renewed tool to get someone outside of the virtual world industry to take these sorts of ideas seriously and a list of topics their enterprise should be thinking about, point them to this report.

More importantly for our topic here, I was pleasantly surprised that the report spent a portion of its limited scope on doing some initial roadmapping. The thesis of this portion is:

“Web3D will evolve during the next five to seven years from an immature emerging market to a standards-based, interoperable global environment — assuming that gating factors are addressed (see Figure 3). “

Forrester researchers, led by Erica Driver, concluded that the most likely scenario for the future is one where open source projects, standards, and collaboration between technology providers will create a compatible global virtual world, or Web3D. More importantly, they contributed a list of what they see as the major barriers that must be overcome to reach this point, including

• improved software interfaces and new hardware-based and mobile interface devices
• standards, such as for servers, client software, avatars, profiles, inventories, animations, scripts, and identity

Less likely, but the main alternative described in the report, is that proprietary walled gardens are most successful, open source projects do not provide a layer of compatible underpinnings, and therefore innovation is stunted, taking additional years to achieving great value from virtual worlds.

As you know if you heard my talk at the Virtual Worlds 2008 Conference, I think that these are not actually alternatives, but that we are in for both of these scenarios simultaneously over the next few years. Because gaming, social networking, and today’s prototypes of virtual worlds are all combining, we are likely to have a blurred spectrum from today’s fully proprietary, big budget MMOs, to standalone virtual worlds that may just use standards for one or two features for the benefit of security or cost savings in content creation, to the 3D Web where open standards are used to publish virtual spaces across millions of Web sites.

So as with determining the question of “when will application X of virtual worlds take off”, which ends up being a complicated analysis of when an array of technology features will arrive in compatible ways, the realistic answer to “proprietary vs. open Web3D” is much more complex. I see one of the tasks of roadmapping the virtual world industry to be taking each type of virtual world, or each virtual world application, dissecting BOTH the technology required and the business environment in which that application will likely come to market, and then making an educated guess as to how proprietary vs. standards-based that virtual world application is likely to be in its first successful versions.

Some applications will surely be walled-garden, but that doesn’t scare me as much as the Forrester authors seem to have been because I don’t see that as preventing a wide swath of virtual world potential being more compatible.

So stay tuned - as I try to come up with more roadmapping content here, hopefully we’ll get to the bottom of such questions - at least as best we can until reality plays out and shows us where we’re wrong.

Nic Matham of KZero, a UK consulting company, published some stats from the L’Oreal campaign in Second Life (more background here). Now first let me say that I really *liked* this campaign. KZero and L’Oreal did the kind of project that I’ve wanted to do for years (Reuters, iVillage and Bantam Dell came closest in different ways). L’Oreal focused on virtual goods, which generate better word of mouth activity in SL, and they leveraged the success of existing SL entrepreneurs by partnering with them as a channel. In doing so, they scaled their campaign across the SL grid, rather than fighting against single-location scalability issues.

Nic writes that over 34,000 virtual goods (which were looks/skins for avatars) were picked up during the 3 months of the project. Given that the total active avatar population in Second Life is 544,290, their market penetration share was somewhere between 1.6% and 6.2% (depending on if each avatar took just one skin, or all 4 skins).

Now I’m going to step back for a second. As another data point for a “virtual goods” project in SL, we can look at Nissan’s effort in Second Life. The Nissan presence is still around but it has not been actively updated or maintained for some time. Since launch in Oct 2006, 89,000 virtual cars have been picked up by residents. The bulk happened during the initial Sentra and Altima kickoffs, but there has been a steady amount of transactions throughout. When I wrote about the project’s long tail last September, 68,000 cars had been picked up. That means that on average over 3,000 cars have been picked up each month since then, on a location not promoted or active. I’ve long been convinced those numbers could have been higher if we had been able to take more of a distributed approach across the grid, rather than an island-focused approach (I lost those arguments with the agency). L’Oreal’s campaign lasted 3 months. Nissan has kept their presence in SL up for about 18 months. The average transactions per month are different between the two, but not mind-blowingly so, and are arguably quite low. By the grace of its timing, Nissan had a lot more going for it than virtual goods — it got massive media and blog coverage.

I bring all this up again because I remain puzzled by the expected return to the brand holder beyond experimentation and learning, and I’m also asking whether SL is really the best place for this kind of learning compared to, say, Gaia. There are those who argue that SL is still a good place for marketing (as opposed to market research, simulation, training, collaboration and other corporate uses), and I am open to learning why, hopefully without getting my head seared off in a flame.

I do believe that L’Oreal was a well-designed project, and one that fit the SL community. I give both KZero and L’Oreal serious kudos.

I also believe in the power of virtual goods for branding. If you talk to Matt Bostwick of virtual MTV about the results they have seen from sponsor integrations in vMTV, and the impact they have measured on consumer purchasing decisions, your eyebrows will go up. The statistics are really good.

Mark Kingdon, Linden Lab’s new CEO, seems to agree in his comments regarding corporate marketing in SL: in essence he is saying “right location, wrong time.” I mostly agree — the exception being that 2006 and very early 2007 was actually the right time because of the PR bonanza which served to bring SL many new customers as well as deliver a return to the brands involved. People might criticize the format of the early SL experiments, but I do think those early adopter brands got a huge amount for their money.

PS. and in case someone is wondering why I seem to be mean about SL one day, then nice the next, then mean again, the answer is simple — I love the folks at Linden Lab and I love the dream of Second Life, but I am just trying to examine this space honestly and call things as I see them.

PPS. if you want to look at an amazing virtual goods model, look at Stardoll.

Former Linden Lab CTO Cory Ondrejka just blogged some of this thoughts on where virtual worlds are going over the next 5 to 10 years, and they are worth reading.

* His slide presentation from his final lecture
* Some notes he blogged while working on that deck

PS. I really like Cory’s 150+ slide deck machine gun of images and blurbs approach to presenting (when I first saw the typical number of slides he used, I was, ah, a little taken aback!)

Last month I enjoyed the honor of being a SCAD speaker.
Sounds scary doesn’t it? SCAD is the disease-like acronym for the Savannah College of Art & Design, host to the Game developers Exchange (GDX.) A pleasantly small gathering of game industry folks who made me feel quite welcome.

The topic this year was independent games, and the speakers list included some luminaries from indie dev, ARG creators, and Machinimists (yours truly.)

I had the distinct honor of geocaching with Elan Lee (of I Love Bees fame.) We both had 3 hours to kill before our flight, so we ate breakfast at the Flying Biscuit, and wandered into a ritzy neighborhood nearby. Somehow the conversation strayed to GPS, and he checked for any nearby caches on his GPS enabled phone. One cache was less than a quarter mile away, so we headed for it. He handed me the phone to get the full triquarter effect of following the arrow.

The first cache we looked for had apparently been bulldozed during renovations of the park, the second was in a corporate district a few blocks away and the only clue was “Have fun storming the castle.” We found an old building with a castle-like stone wall among some skyscrapers. After 20 minutes Elan and I gave up to head for the airport.
It was certainly fun, and most importantly lead us to visit parts of Atlanta we never would have found otherwise, which seems to be the point. This is a perfect example of taking an ordinary environment (in this case a real one) and adding a simple game mechanic (follow the arrow.) Walking around a new city becomes, “Find the Treasure!” And since the real environment of Atlanta is a rich interactive space, simply walking towards a mysterious goal is a rich interactive experience.
By far the most enjoyable part of the experience was sharing it with another person. In this case someone I had only met that weekend.

So what’s a great way to make almost any environment fun to just wander around in?

Add other people.