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Virtual Worlds, Real Money

July 17th, 2007

My kids are addicted to “tween-age” social networking web sites, specifically Club Penguin and Webkinz. These sites are relatively simple, they provide hours of gaming entertainment, and they provide an interesting virtual interface for interaction, as each “player” is represented via an avatar that the player can house, dress, feed, etc., using virtual money earned through either playing games or taking on “work tasks.“

The interesting thing to me, though, has been the business model. Despite the claims up and down of their strict protection of “identifying information,” I suspect that the aggregated data associated with individual product affinities is a prime data product to be packaged and sold. For example, individuals can purchase country flags to display as part of their avatar’s presentation. Would it be a big jump to draw conclusions about ethnic heritage from flag selection? Especially when the company has data about the player’s home location and name, the ability to analyze geo-demo-psychographics on a boatload of pre-teens who are being trained for interactive e-commerce, doesn’t it make sense that a company like Sony is interested in buying it? It seems, though, that at this point the deal has fallen through. However, expect that at some point, these tween-magnet sites are going to be worth a lot to someone aching to market some products.

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Author's Other Work

Below are some additional resources which David.Loshin produced or helped produce.