It was great to see everyone at the Virtual Worlds Conference last week in New York. Thanks to all that came to my Platform Shootout presentation.

For those that are interested, I have added some notes to my slides and have it posted here for download. The white paper that was mentioned during the presentation will be published very soon.

The Virtual Worlds Conference is quickly approaching. There are less than seven days left before we kick things off in New York next Thursday.

If you are coming, be sure to wrap up lunch early on Thursday and head to Room 2 at 1PM for my session on virtual world platforms. This session was a huge hit at the San Jose Virtual Worlds Conference last year with standing room only, so get there early. Here is an iCal/vCal event invite (right click and select save/open) as a reminder.

For Shootout 2.0, I’ll be breaking worlds and platform technologies down into a usable framework and will address considerations for collaboration, simulation, and marketing objectives. If you happen to be with a platform or virtual world company, it’s in your best interest to be there to keep me straight on the facts and help field questions from the audience.

There’s much to cover, so show up caffeinated.

“Sign up forms must die,” proclaims Luke Wroblewski in his new book Web Form Design: Filling in the Blanks.

I couldn’t agree more.

There is an emerging trend among Web 2.0 sites to employ a gradual engagement model as a way to give users a taste, often times a complete activity or experience, before asking them to sign up.

Virtual worlds and MMOs are quite possibly the worst offenders when it comes to forcing users through a registration process. Guests are often relegated to look at sample screen shots and read descriptions of a world before deciding to hand over their personal information for a closer look.

By and large, enthusiasts have populated online worlds to date. Whether they are hardcore gamers or early adopters of virtual worlds, they don’t need convinced to try a new service and they don’t care how easy or hard it is to use.

The design paradigm must change if the industry is to be successful in attracting and retaining casual users. If you are publishing a casual social or game world this year, even in 2008 there is a chance it will be the first avatar-based, immersive experience for your users.

In some ways, the Free to Play model that many world designers are using is addressing the monetary investment piece of the puzzle, but most worlds are still requiring a sign-up process before putting users into the world.

As experience designers we need to move the sign-up process from the download/sign-up page to a series of interactions in the world. The percentage of casual prospective users that are lost between the web pages describing a virtual world and the sign-up form is non-trivial. Equally significant is the number of users lost between sign-up and entering the world.

If you are still not convinced, an excerpt of Wroblewski’s book has been posted over at A List Apart.

CCP and their online game EVE Online is a delightfully disruptive force in the MMO industry. It was no surprise when I saw this on the Kill Ten Rats blog:

CCP [the makers of EVE Online] just started accepting candidacies for the Council of Stellar Management, or as their news post was amusingly titled, the Council of Stellar Awesomeness…This is a player-elected council of nine members who represent the playerbase to CCP, and CCP in turn promises to “attempt to accomodate all reasonable requests by player Representatives” and to “do everything in its power to resolve the topics presented.” They’re taking it pretty seriously, too — each term of the council requires a face-to-face meeting at the CCP offices, with travel (to Iceland!), lodging, and food paid for by CCP.

Incorporating user/player/resident feedback is an interesting phenomenon for MMO publishers. It is a hybrid of community management, governance and user-generated content.

This move by CCP is not the first time a sandbox MMO has attempted to give their high profile users a formal outlet to provide input and influence the publisher.

Second Life Views was a program started by Linden Lab and described as “a series of bi-monthly meetings with SL Residents to discuss the design and implementation of new features for SL.” To the best of my knowledge, the Views group has not met in quite a while. More recently, I noticed a Governance Team lead by Linden lab holding in-world office hours for residents to stop by to ask questions and discuss topics.

What makes the EVE Council different than other attempts like SL Views is the fact that players will be responsible to fellow players, not just advising the publisher of the MMO.

A major drawback of programs like SL Views and Town Hall forums is that users are likely to overwhelm the publisher and their ability to properly manage the input. After all, well managed MMO publishers have far fewer employees than they have users, right?

If you want to see more details about the Council of Stellar Management (CSM), you can download a brief on it here. I’m excited to see this in action in the coming months!

I am calling for an end to classifying online games, virtual worlds, and social networks as being either wholly asynchronous or synchronous social mediums. Not only are these the wrong terms for what we really mean, they are treacherous generalizations. It also helps perpetuate the delusion that these are entirely separate industries, which I’ll dive into with a separate ranting blog post another day.

Asynchronous and synchronous terms began with technologists describing technology behind data communication. At some point we made the mistake in assuming this is a critical point of differentiation in describing the social interactions that ride the technology.

The truth is that technology is eroding synchronous communication while asynchronous communication has become so efficient that we can use it synchronously.

Our offline lives are being invaded by what Howard Rheingold refers to as digital distractions. People that read and write email on their Blackberry in a restaurant while their date is sitting across from them is a commonplace phenomenon today. I would argue that the conversation with the date and the email dialogue are asynchronous.

Personal computers of today are inherently designed to be asynchronous, making them a powerhouse for multi-tasking. While virtual worlds like Second Life and World of Warcraft simulate real-time environments, users rely heavily on features like chat history, inventory “drop boxes” and in-world email messaging systems for their social interactions.

While synchronous and asynchronous may be a way to distinguish underlying technology or loosely refer to the nature of virtual environments, we need to move the design discussion away from this being an either/or design choice.

Online social experiences should be designed from the ground up, using the right interactions and subsequent technology that make the most sense and are the most enjoyable for the users.

The “What Teens Want Online” panel consisted of one adult and a half dozen teens talking about their online and mobile habits.

The panel started out with the young panelists listing the websites they like to use and why. The common theme was personal interests (finding music), personal expression (profiles), and news (gaming, music).

“I don’t really use that avatar stuff,” said one teen panelist.

The panel reinforced a trend I’ve seen elsewhere that teens are not a rich demographic for virtual worlds.

Runescape and GAIA were the only specific virtual worlds/MMOs liked by the panelists, but it was clear they don’t use them much. Zwinky was mentioned by two panelists as being dull. Pay to play was a common objection to other worlds and games.

It was clear that the teens do not use social software for broadening their network of friends. While MySpace and FaceBook were ubitquitous, specialized social networks like Last.fm, iLike.com, Flickr, Twitter and Photobucket are not popular. When I asked a few of the panelists afterwards about these sites, only a few knew of Photobucket and made limited use of it.

On the mobile front, there was consensus that instant messaging has been replaced with unlimited SMS messaging. Aside from SMS, panelists use their phones for wallpapers, ringtones, games and photo sharing.

David Helgeson, CEO of Unity Technologies sat down for a few minutes during GDC to talk about the growing excitement around his company’s software. Unity’s primary product is a virtual world and MMO development platform that can deliver experiences on the web, PC, Mac, and Wii.

There is much interest in Unity right now because it offers advanced 3D graphics capabilities from within the web browser using a very modest plugin that installs without a browser restart. If you want to see the platform in action, checkout their website portfolio or play an Electric Sheep favorite, Raptor Safari developed by Flash Bang Studios.

Click here to listen or download.

Presented by John Bates of Entropia Universe, Eyjólfur Guðmundsson Chief Economist of CCP, and Craig Sherman of GAIA.

Some Gaia statistics:

5 million visitors/month, 3 billion page views/month, 1,000 auctions closing daily, 1 million forum posts per day (second only to Yahoo!), $1 million/month in digital goods, and “many thousands of dollars” per day is being made off prepaid cards sold in Target stores.

Gaia is launching an MMO this summer that will be Flash-based. It has been in development for two years and they expect it to almost immediately become one of the top MMOs.

Panelist discussion:

Can a virtual world or MMO exist without an economy? Panelists agree it’s not likely because any time users perceive value in the world, a market will emerge regardless of terms of service.

Things without dollar value still have value. The acceptance of these MMO and virtual world economies will continue. They look just like traditional economics (inflation/deflation, economic utility) just a different currency.

Taxation on virtual world revenue is not really that exciting. When people pull money out of a virtual world, it is income and therefore should be reported as income to taxing authorities.

There will be a fundamental switch to micro-transaction economy in place of subscriptions. This change is well underway in Asia and is starting to happen here in the U.S.

Presented by Gabe Zichermann, CEO of rmbr

What is funware? It’s a type of application that uses social game design theories or mechanics in a non-game context.

Incidental funware application example:

eBay - Shopping microgames, status (feedback) meta-game, community expression

FaceBook - communication microgames, traditional microgames

Yahoo! Answers - research game, status (success), profiles, ratings, points, inherent quests

There is not a single application that could not benefit from being more fun. The millennia generation is drawn to things with more fun. Fun first, utility second. As a man in his mid-thirties, I have trouble seeing the world that way.

Why is FaceBook doing well?

Easy: Effortless, 2D, HTML

Real: Tangible benefit in RL (McSalad study - no one orders it, but it’s on the menu to draw people in.) People can justify using FaceBook because its “not really a game”.

Free: No, really - it’s free.

Fun: Socially-propagating story. The story that is being told in the game is literally being told by the players. As more players come into the story, it gets bigger, fatter, deeper.

Status: The ultimate fireplace mantle.

3D vs 2D

- Study in 2006 shows 70% of tween girls prefer 2D over 3D (reverse is true of boys).

- Anecdotal evidence suggest 2D is more palatable to everyone (movies, books, web games)

- Even 2.5D might be a challenge. Side-scrolling is under-utilized.

Rmbr

Rmbr is a photo-sharing game that came out of frustration with the way I interact with photos in real life. Rmbr is funware for photos - games like memory, photo psychic, etc. All designed to help people tag and interact.

Gabe’s advice to designers on opportunities:

“I want shopping, travel, financial services and product companies to be fun.”

Presented by Adrian Crook of FreeToPlay.biz and Relic Entertainment

Free models are emerging in real life including the European “free to poop” campaign with ad-supported public restrooms, Ryanair, and music.

What is free to play? It is not a genre or a platform. They are revenue models that monetize attention of its players.

91% of kids PC online games are free to play (Source: NPD). Examples include Kartrider (160 million users), Runescape ($60 million annual revenue), Webkinz (7 million unique users 340% growth in one year).

Current Free to Play Revenue Models:

1. Virtual Item Sales - unlimited ARPU because users decide the ceiling. The value drivers are rarity/price and visibility. Dual currency systems allows users to purchase stuff via in-game efforts (attention-based) and real money-based. 5-10% conversion rate ranging from functional, decorative, consumable/decay, etc.

2. Merchandise - Barbie Girls has 9.5 million users in 9 months. Their primary revenue model is the sale of Barbie dolls that plug into the users PC for redeeming access to game. Webkinz recognized $20 million retail in 24 months.

3. Information Sale - Food Fight on FaceBook requires users to provide information in order to make virtual cash to buy food to throw at their FaceBook friends. They hit 36,000 users daily, averaging two surveys per user, 25 cents per survey which is $18,000 per day in revenue or $6.6 million annual (projected).

Other models include … Advertising, Auctions, Player Trades, Subscription Tiers, Event Tournament Fees, Real Estate/Land Use Fees, Affiliate, Donations. More descriptions on Adrian’s website.

Design Tips:

1. Respect the free players. Don’t ignore the 90% that don’t give you money because they make the world viable.

2. Support integrated graphics. At the Virtual Goods Summit, someone from Nexon said “If we require a graphic card, we would lose 80% of our user base.”

3. Be browser-based or small download. Things are headed towards the browser. Even WoW is allowing people to play while download completes.

4. Regional payment systems. Not everyone likes to play for games the way we do in North America. GoPets has over 90 payment methods as an example.

5. Provide short compulsion loops. This is counter-intuitive from console game developer perspective. “How many hours of game play?” is the wrong mentality here. Games like Puzzle Pirates, 3-5 minute compulsion loops with average playtime of 2 hours a day, 30 days a month.

6. Defer user sign up. Users shy away from giant forms. Get users into the game play and creatively handle the sign up. Let them get a taste of your product first and foremost.

Growth Challenges:

1. Virtual Property Law. Linden v. Bragg as an example where this area needs to be decided by the courts.

2. Slow broadband. 6mbits in the US and 45mbits in Korea.

3. Rising dev costs. Developers are pushing the quality bar up on free to play.

4. Second Life slow down causing investment concerns.

5. Secondary Markets - IGE, unsanctioned item sales

6. Kids-only: After age 18, kids are graduating to consoles.

Trends and Opportunities:

1. New Free to Play platforms including social networks, iPhone $upercash, EA Blueprint

2. Breaking down the walled garden model. Metaplace, Wow Armory, Dr Char AP as examples

3. NPD top sellers as Free to play games

“We’re looking at the sort of game that five, six or seven years ago, they would have been putting in a box and selling on retail shelves. With the new technology we can delivery this through the browser.”