Financial crisis impacts online expansion

The Global Financial Crisis is having an impact on all areas of the economy, especially those in early stages of development like the social media sector. Pownce, I Want Sandy and Stikkit have all announced their demise today, and other businesses are sure to follow.

The Stubborn Mule has summed up the situation well:

The rate of innovation online of late has been extraordinary, but the result is a proliferation of services that is not sustainable. With the Global Financial Crisis progressing outside the financial sector to the broader economy, venture capitalists will be tightening their purse-strings and this will inevitably lead to a period of consolidation in the online landscape.

Read The Mule’s full post here.

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Virtual worlds still receiving investment

I just saw this post about Virtual Worlds on Mitch Joel’s blog feed and wanted to re-post it. I have been an interested observer of Second Life from mid-2007, watching major corporates invest substantial amounts with avatar builders who started their own in-world consulting and design companies with other avatars who they had only met in SL (Second Life). It was a heady time in 2007 for the virtual space. The first SL stock exchange opened up, run by an Australian 20-something from Melbourne and Anshe Chung had just become the first SL-millionaire, on paper at least, in SL virtual land holdings. Night Clubs were starting up on a daily basis and closing down the next. You’d meet people from all over the world whose Real Life (RL) dream was to become a club owner and they would be trying to live it out in SL. LOL. By mid 2008 flying around SL was like flying around a ghost town.

About to update SL to see what it's like now

About to update SL to see what it's like

However, it would be absurd to dismiss it. SL is a powerfully motivating environment even in its current form. I met many people who clearly spent a lot time in-world, getting an enormous amount of value from it. The ability to communicate with people from anywhere in the world, avatar to avatar, through effective multilingual HUD translators, is not only amazing, it gives you a vision of the future where we may have technology embeded in us, or with us, that will give us a constant ability to communicate with anyone anywhere.

There is clearly substantial future business and social benefits to SL and other virtual world formats. The question is how quickly these benefits will be realised. The answers lie in the speed of the technological advancement of the in-world experience and the input devices, such as the high-end head sets that are being designed for gamers, that allow flexibility and immersion.

Here’s what Mitch Joel had to say:

Third Life For Virtual Worlds

October 17, 2008 2:37 PM

Posted by Mitch Joel

When was the last time you thought about the online virtual world, Second Life? Most of our attention shifted out of Second Life over to Twitter and FriendFeed.

It turns out virtual worlds are not dead.

According to this news item from Virtual World Management, $148.5 Million Invested In 12 Virtual Worlds-Related Companies in Q3 2008, things are still rocking and rolling in the virtual worlds:

“Virtual Worlds Management, the leading virtual worlds trade media company, has announced findings from a comprehensive study of accountable transactions showing that venture capital and media firms have invested more than $148.5 million dollars in 12 virtual worlds-related companies during the third quarter of 2008 with participation from many more VC firms and angel investors. The total investment in the virtual worlds space for 2008 is now over $493 million… The bulk of the investment is in the entertainment space, with all but $22.4 million going to developers of worlds with strong gameplay elements, ties to media brands, or the youth sector.”

By the sounds of this, someone, somewhere is drawing lines of distinction between pure-play games and virtual worlds.

Read the rest of this post at Third Life For Virtual Worlds | Six Pixels of Separation – Marketing and Communications Blog and Podcast – By Mitch Joel at Twist Image

(Update: Ross Dawson just twittered this link about Second Life offering business conferencing in 3D. As Ross says, “whether or not this works it’s definitely a growth space…”)


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