Real Life Woes for Virtual Worlds

January 27, 2009 at 9:36 am | Posted in collaboration, communication, Recession, virtual worlds | Leave a comment

For public-facing virtual worlds (mostly social and gaming worlds), Virtual Worlds News identified $594 million in investments from media companies and venture capital firms in 2008. That’s down from $1.4 billion in 2007.  Although, as the article points out, venture capital spending is down 30% in general.

Here is the outlook for the Enterprise segment of virtual worlds, according to the Virtual Worlds Management Industry Forecast for 2009:

Many vendors promoting enterprise-targeted virtual worlds view the economic slowdown as a double-edged sword. Discretionary and experimental budgets are being slashed to cut costs, but travel dollars seem to be running out just as quickly.

“This is a perfect opportunity for our industry. Enterprise virtual worlds have clear business advantages in this economic downturn and the industry has to convey these advantages just as aggressively as the social software/web 2.0 market did in the last 3 years,” wrote Rivers Run Red CEO Justin Bovington.

Others, many outside of the direct enterprise space, are more skeptical, seeing the economic climate pop the enterprise bubble for good. Others, like The Electric Sheep Company CEO Sibley Verbeck,  see the enterprise market in state of stagnation so that the end of 2009 will look much the same as the beginning.

There are many ways enterprise virtual worlds can save costs, including reducing travel (mentioned above), reducing the need for high-end conferencing (telepresence) systems, and substituting virtual rehearsal and training for expensive real-life equivalents.  But in this climate it will be difficult to keep projects that mention “virtual worlds” on the “approved” list as budgets are getting slashed.

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