The Business of Gaming

A game is a game is a game...until you throw it on a network...and...well then the game changes...

So what is the potential of virtual worlds and games?

Well that really depends on which games your talking about...

For instance Second Life is the most popular virtual world...it appears to have a decent size user base...it has enterprise applications...and the presence of some pretty big brands...

Without hindsight it's impossible to say if the success to date is based on substance or hype...but if I was a betting man I'd take the latter...

As a business on it's own I think that there is some substance...until some disruptive technology comes along Second Life should be able to maintain their user base...but corporate interest is another story...

I'd like to think that I'm more then just a hater so I'll throw down some  reasons...

On-line collaboration...it's cool to have avatars attend meetings in a virtual world...but does it add any value? is it really sensible or secure to hold conferences in a virtual world that is open to anyone and hosted on another businesses servers?

If I know one thing it's that a sustainable business cannot be everything to everyone...it's still early in the game...but Second Life is going to have to choose a direction...if they try to act as an enterprise solution...someones gonna start another social virtual world...directing all resources to the cause...but I digress...

A company could use Second Life to raise brand awareness and protect their name from slander...but it's impossible to target marketing efforts...with such a diverse group of people...from so many regions...with their real identity and location concealed...how can a company measure their investment?

I do think that their is massive potential in niche virtual worlds that attract a certain demographic or interest group...like maybe a MBA virtual world...or an student athlete virtual world...or a regional virtual world...

Having said that...there appears to be a trade off between the openness of such worlds and the commercial potential for third parties...

But limitless potential is less relevant to games then to virtual worlds...so gaming consoles sitting on a network is a whole different story...

Be it a sporting game or guitar hero...it is far easier to understand the interest of your users...additionally by tracking ip addresses and internet service providers...ads can be targeted according to real life geography...virtual worlds such as Second Life would loose major appeal if different people saw different things based on their real world location...with Guitar Hero and...say...NHL 2010 (or whatever it's called) the adds by the stage or on the boards is unlikely to affect game play in the slightest...meaning that a guitar store in  Ohio can advertise to someone in Ohio whose playing with someone in Toronto...while they are exposed to a Toronto based retailer...