Virtual Worlds Management Industry Forecast 2009
(Visited 6325 times) Game talk
Jan 192009
Virtual Worlds News has published their “Virtual Worlds Management Industry Forecast 2009”.
Among questions answered of the dozens of CEOs and senior execs interviewed are things like “What are trends for the next year?” and “What is your company’s goal for 2009?” Lots of mentions of the economy. My favorite answer comes from Sean Ryan of Meez:
Get profitable while Armageddon rolls over the industry.
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This reminds me of years ago, in the mid to late ’70’s, when I was a salesman for a wholesale company. This was before the Walmarts of the world hit their stride, and corner grocery stores, drive-throughs, taverns, independent drug stores, and all those kinds of business’s were going very strong. And the economy went bad, unemployment rose to double digits, inflation and “stagflation”, etc.
Now, I understand that this has nothing to do with funding games and the problems that the economy is causing there. But still, there’s some relevance.
As the economy was going bad and people were starting to brace themselves for less business by cutting back on their stock supplies, my boss made an attempt to keep our customers from overreacting. He wrote a story, and ask all of the salesmen to give it to our customers. The story, to make it short, was about a sausage maker who made a high quality product and even though it was higher in price, he had a very good business. But then his son comes home from college, and he tells his father:
“What are you doing? Don’t you know there’s an economic crisis? Don’t you know that you have to cut back on your expenses because your sales are going to drop?”
So the sausage maker cuts back on the quality he put into his sausage, cut back on his timely services.
And sure enough, just as the experts predicted, his sales dropped.
So, as one of the salesmen, I handed out this story to all of my customers and ask them to read it. I decided to watch this closely, as my sales had dropped in the previous weeks, especially for new products and specialty items. The base sales, tobacco, candy, and an assortment of a wide range of products, had held somewhat strong though.
I had one customer in particular, one of my favorites, who ran an unusual business. It was a corner grocery store that also sold work clothes and had a strong variety store content. But what was unusual about it was the location and customer base. It was a family business handed down to him from his father, in the heart of an economically depressed part of a smallish city. His customers were always economically depressed, and he ran tabs for families who were struggling, and then ran a weekly run to collect on the bills based on unemployment checks arrivals, and before some of these guys could blow the money on beer and other things. It was allot of work for him, but it worked for everyone involved.
He was one who had stopped buying anything at all new or extra. He read the letter, and then made a reversal and bought allot of extra things that were on sale, some new items, etc. He didn’t say anything about it at the time. One of the new items was something that was a huge hit, and is still sold today, called “Ringpops”. They are a large hard candy shaped like a giant gem, on a plastic ring. Kids loved them.
The next week back, he bought a bunch more. He also bought a bunch of other things beyond his basic supplies.
This went on for several weeks, and finally I asked him how everything as going with his sales, and overall business. He said “well, it’s down a little, but I called your boss just the other day to thank him.”
I guess the moral of the story is to not overreact. There’s always profit to be made. Business does go on, people still want things and still buy.
Great story, but I think the moral of the story is that the main problem with a bad economy is that people act like the economy is bad.
Rik:
The real trouble is that the economy becomes a scapegoat for preexisting problems that were left undiscovered and/or unresolved. The trouble with this scapegoat is that those preexisting problems remain undiscovered and/or unresolved.
“True Web-embedded 3D still looks like it is a ways away,” counters Metaplace CEO Raph Koster.
I understand the 2D vs 3D arguments when it comes to ubiquity, however assuming a developer still wants to do 3D, I’m still surprised how little mention Shockwave gets relative to Unity considering the difference in penetration. Shockwave has a 59.2% penetration in mature markets (U.S., Canada, UK, France, Germany and Japan) and 34.2% in emerging markets (China, S. Korea, Russia, Taiwan and India) as of June 2008. I did a presentation at GDC Austin where this was an area of discussion:
http://www.gamedev.net/reference/business/features/08AGDC1/page7.asp
I think Unity is just trendy right now, Gene. Shockwave is clearly the largest penetration 3d engine, but I think there is this perception that it’s old and not supported.
This is (before len chimes in!) similar to the situation with X3D — I actually think the fragmentation of X3D browsers is hurting the perception that it’s viable, because no one vendor has gained enough traction with the mass market.
But both are actually quite capable solutions.
🙂
At least there is a choice when one has to make one. Better that than to be told to take screenshots and videos, but otherwise, to do without.
I’m not against other formats. I just want to be sure the standard lives because we’ve seen what happens when there is no choice.
Virtual worlds actually don’t occupy much mindspace for X3D/VRML vendors these days. It is too fragmented a market to care about and IBM hosed it with that giant charity contribution. The X3D vendors are making their money in other 3D markets but the niche worlds are out there. The main recommendation if all other capabilities are equal is no one gets sued for building with X3D. The main disincentive is the lack of a cohesive multi-user world story from an organization that should be able to put that together quickly and should have done so ten years ago.
Shockwave may have penetration but poor 3D. I believe that hurts the 3D market more by having frequent penetration but little staying power. It isn’t the best way to get a second date much less a second life.
Anyway, none of this should be the concern. The reality is the 3D costs too much for too little utility in business independent of the server farm. It remains a sideshow on the web. With ad revenues declining, I’d be asking about different business models.
On the other hand, it will be interesting to see who wins the Virtual Decatur bid if awarded and what they do with that.
Hey Raph, the Web3DC BoD would love to have you speak to them if you have the time to spare.
The lack of a requirement to install a plugin is critical (and well spotted by Raph, Daniel James, and others). Are there any numbers on Unity?
You could also look at Java for 3D which I think has around 80 percent penetration.
It is a shame that Shockwave hasn’t really been supported by Macromedia or Adobe. If they kept the engine and replaced Lingo with a version of Actionscript or something, you’d probably see some interesting stuff.
The biggest problem is that we have not had a major new plugin that has gained widespread market acceptance in … what 5-10 years?
If Adobe supports 3D in Flash, we’ll have a lot of 3D, otherwise, I wouldn’t hold my breath.
It would be interesting to see the difference in response rates between browser plugin installs and full downloads. Clearly, Asian developers don’t have a problem with getting people to download huge clients. There are also a lot more ActiveX controls (visit some Korean sites, especially news sites or one’s that require payment.. at least that has been my perception).
One idea that seems to be dropping off fast is “Rich Internet Applications”.. AIR and its competitors don’t seem to be getting a lot of attention.
“Shockwave may have penetration but poor 3D. It isn’t the best way to get a second date much less a second life.”
Cute. Too bad it isn’t true. Give Sherwood a run. I’m not sure what the standards are, but we’re running 2500-3000 poly avatars comfortably at well over 40 fps in our 3d environments. I think perception and reality are two very different things. Adobe’s Shockwave team is active and Director 11 is about a year old.
“If they kept the engine and replaced Lingo with a version of Actionscript”
Shockwave has supported both Lingo and ECMAScript/Javascript for years.
I can’t deny it’s good looking 3D, Gene. Sherwood is also set up very nicely for getting into the world without setup hassles. That is some good work. The FPS is very acceptable for a battle game.
What formats does it export or import? Are they open? Who gets to license these? What does Adobe do when a non-Adobe 3D plugin vendor applies for PDF embedding licenses? (If you don’t know, you need to find out the answer to that fast.) It’s true enough.
Adobe I am not that happy with. Only IBM ranks higher in the companies that talk a lot about the need for standards then do everything in their power to keep them from actually being successful while pursuing their own hedge positions. I’ve been around too long now to accept what is going on in the 3D on the Web debates that somehow always come back to “Give Adobe a PAS” or “IBM will take care of it with marketing muscle.” It’s arrogant, dumb and the Chinese will eat your lunch on costs.
“What formats does it export or import? Are they open? Who gets to license these?” You pay for Director once (and for upgrades I guess) and then there’s no licencing fees on what you produce with it. So I own the content, but I’m not sure that’s quite what you mean about open. I do the 3D work in Maya and export in W3D format (Shockwave’s native format), however there are Shockwave exporters for Lightwave, 3DS Max and a bunch of others. There’s also Wavefront converters and Adobe has been hinting at Collada. The W3D format is documented for people wanting to do plug-ins, however it’s a game engine format designed for minimum download size, not a working format designed for readablity.
“I’ve been around too long now to accept what is going on in the 3D on the Web debates….”
I haven’t been paying enough attention to the debate. We’re a very small player in the industry trying to make a go of this. At this point, switching technology platforms would be a huge deal and I’m fortunate to have decided to go this way in 1999 when 3D was introduced to Director. It’s been the worst marketed product in the history of the earth, with Adobe almost apologetic about the fact you can make games with it until recently. So much legacy content online keeps the penetration high and the fact that Habbo uses it doesn’t hurt either. You can see people’s faces turn sour when you mention Flash’s forgotten older bastard step-brother, but for 20 year now, it’s been the Swiss Army Knife of plug-ins.
True and I wouldn’t ask anyone to switch if they have that much content up and running. At least with the level of penetration they are unlikely to yank it, but too much good content has died because a platform vendor for whatever goodness they have in their secret sauce refused to adopt import/export open formats.
Adobe has good products and bizarre policies. I love Audition 2.0 for the simplicity it brings to recording. It’s their standards politics that infuriate me.
Unless one is making Advertorial Games, plugins dont matter. never did.
The only market that cared was mac based creative directors who dont believe anything is real until it plays on their mac box in their cubicle.
Both macromedia and Adobe, with seperate and merged products have never- ever- since 1990- had any real success with 3D tools and markets.
I have little hope for an adobe/shockwave or flash solution. Unity looks like the best interim solution for larger than – Cookie-3D World- type 3d entertainment that is developed shy of the typical game industry methods of creation/etc.
I do now see only Autodesk as the defacto standards setter in the realtime 3d market , but since they have only their own timetables to care about, I beleive were another 8 years away from all the hub bub that the ‘current” meta pundits have promoted since a gamer went from escort to server sapce reseller.
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