Needham, Mass. - A new market emerging from virtual reality into the real-world global economy is growing by leaps and bounds, according to Needham, Mass.-based TowerGroup Inc., yet remains largely unknown to the financial services industry. This new market is driven by the popularity of "massively multiplayer online role playing games" (MMORPGs) and online "virtual social worlds" (VSWs) - such as the hugely popular Second Life - where the lines between online and offline commerce are rapidly blurring.New research from TowerGroup finds that in 2005, online (nontravel) sales exceeded $83 billion (USD), of which virtual social worlds contributed $1.5 billion. As MMORPGs quickly develop into complete online economic systems, TowerGroup forecasts that the "real world" revenue they generate will reach $2.5 billion in 2006, and that the market will grow to 40 million people spending $9 billion annually by 2010. These virtual games include complete social and economic systems for which players use specialized browsers to engage in a virtual life. Each game provides the potential of interacting with multiple players simultaneously, and on a global basis.
Retailers such as Levi and Nike have already seized the opportunity to engage millions of paying consumers in these complete but other-world economic and social systems - replete with virtual currencies that can be traded for real world cash in currencies exchanges. Wells Fargo launched an educational MMORPG, called Stagecoach Island, to address financial training by making a learning game out of ATM, deposit or payment services. The company intends to expand it as they begin to see the value of this market. However, TowerGroup notes that most financial services institutions have either ignored these thriving marketplaces, or have relegated marketing efforts to banner advertising or online links.
TowerGroup believes that by reallocating funds from existing marketing, advertising and R&D budgets, financial organizations can put themselves at the forefront of the emerging MMORPG/VSW market. A new TowerGroup report titled, "Online Social Worlds as Emerging Markets: A Dose of (Virtual) Reality," by Rodney Nelsestuen, a senior analyst in the Cross-Industry practice at TowerGroup, discusses why financial institutions should take MMORPGs/VSWs seriously as an emerging global marketplace. On the flip side of the coin, the research also highlights the importance in understanding the risks involved in conducting business in the unsettled and changing territory of virtual social worlds.
Source: The TowerGroup Inc.
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