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The business of virtual reality
Information Age
July 8, 2006

What better way to relax after a hard day's work than to disguise yourself as a panda and trade imaginary furnishings with people on the other side of the planet?

Strange as it may sound, the phenomenon of massively-multiplayer online role-playing games (MMORPGs for short), in which gamers adopt animated alter-egos and wander vast virtual worlds, is one of the fastest growing forms of entertainment in the world today.

According to tracking site mmogchart.com, the number of subscribers playing multiplayer online games has almost doubled from 7 million in 2004 to 13 million this year.

And what might seem to some like just another hi-tech way of killing time, has for others inspired a raft of possible applications. As games such as Second Life, There and World of Warcraft attract ever more players (the latter boasts 6 million), more ingenious uses of the software emerge. Some players of Second Life, for example, earn a living trading the in-game currency, the Linden dollar, which has a real dollar value.

The French government recently launched its own online role playing game - Cyber Budget - in which players can control the national budget, in order to learn the link between taxation and government spending.

Of course, where teenagers and young adults go, marketers will surely follow, and branded digital objects have begun to appear within the established online worlds. Among the companies to have infiltrated the MMORPGS so far are Nike, Levi's Jeans and McDonalds, which gave away free virtual hamburgers to players of The Sims Online.

Even the venerated Harvard Business Review has run a 5000-word article on marketing to avatars, a player's in-game representation (human or otherwise). "Instead of targeting passive eyeballs, marketers here have the opportunity to interact with engaged minds," says author Paul Hemp, Senior Editor of the Harvard Business Review, which named avatar-based marketing as one of its "breakthrough ideas for 2006".

Last week, Hemp held a discussion of his story within Second Life. Raz Schionning, web director for clothes retailer American Apparel, which recently opened a shop within Second Life, told the panel he is convinced that the online role-playing game is the market of tomorrow.

"I remember when I pitched the idea to the creative team here - the people who handle our print and traditional marketing - they were totally perplexed and a little scared," he said. "But they were kind enough to give me the benefit of the doubt. And now they are very excited about the whole thing."

Others are seeing MMORPGs as a tool for meetings and networking. France Telecom, for example, has developed the Virtual Collaborative Environment, a virtual space for geographical separate work colleagues to collaborate in.

JP Rangaswami, CIO of investment bank Dresdner Kleinwort Wasserstein recently invited readers of his blog to a discussion on net-neutrality within Second Life.

If MMORPG adoption continues to grow at the current pace and the general populace becomes used to 'meeting' in this way, perhaps it will not be too long before businesses convene not in offices but in three dimensional virtual spaces. Disguised as pandas.