$425M invested in Virtual Worlds and that’s just the last quarter.

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Virtual worlds (and their ecosystem of game developers) have attracted a great deal of attention, both by the VC firms and by the technology and media companies.

During the period Aug-2006 and Sep-2007, the amount invested in the Virtual worlds was close to $1B.

Two notable acquisitions last year were Club Penguin ($600M) by Disney, and Havok by Intel ($100M).

Prominent investments in the Virtual World sphere were: Trion World Network ($30M) by Rustic Canyon Venture Partners, Double Fusion ($26M) by Norwest Venture Partners and others.

If you do not recognize some of these names, that is because these companies provide backend support. Havok’s product line includes tool sets for physics, animation, and character behavior. If the waves in the water, or the trees in the Second Life look realistic, it is because of the software written by Havok. Double Fusion provides in-game advertisements, a clever way to capture the attention of the gamer.

During the last quarter 4Q07, the investment in the virtual worlds has been about $425M. Most of the investors in the Q4 are venture funds. For example, ZeniMax Media, publisher of original content for gaming consoles, received investment from Providence Equity Partners.

The most crowded segment is probably the virtual worlds for teens. Some of the Teen Virtual World games that received funding include Gaia, Hidden City, Numedeon and Star In Me.

Virtual World Management Industry forecast contains predictions from several Virtual world luminaries. Many have suggested that the virtual world will become common place in a group collaboration.

Even though there are companies like Quaq and Unisfair, offering attractive solutions for group collaboration, I do not believe that we will see any significant level of adoption of Virtual Worlds in a business setting any time soon. I also think that many of the group coloration suites offer a great deal of “eye-candy” in terms of what can be done, but the hardware is not ready, bandwidth allocation is not there and masses are not waiting for real time collaborative tools.

Unisfair might offer online conventions but trade conventions are much more than just electronic booths with LCD displays.

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There is no doubt that Virtual Worlds will see massive growth. It is not mainstream yet, but it will become so. It took years before businesses adopted the Instant Messaging technology. Similarly, once virtual worlds start permeating and pervading everything we do, THEN the business folks will jump in.


3 Responses to “$425M invested in Virtual Worlds and that’s just the last quarter.”

  1. By Big A on Jan 24, 2022 | Reply

    Keep an eye out for http://www.citypixel.com I definitely see it doing some great things in 2008! Definitely my favorite virtual world on the web right now!

  2. By Dusan Writer on Jan 25, 2022 | Reply

    Big A - hehe, you posted a similar comment on my blog. Care to disclose your affiliation with the company?

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  2. Jan 25, 2008: Investment in Virtual Worlds: Follow the Money « Dusan Writer’s Metaverse

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