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Most Business-Launched Virtual Worlds Fail

bughunter writes "Internet consultant firm Gartner claims that only 1 in 10 commercial virtual worlds succeeds, and most fail within 18 months: 'Businesses have learned some hard lessons," Gartner analyst Steve Prentice said in a statement released Thursday. "They need to realize that virtual worlds mark the transition from Web pages to Web places and a successful virtual presence starts with people, not physics. Realistic graphics and physical behavior count for little unless the presence is valued by and engaging to a large audience."'" Hard to believe it's even as high as one in ten -- most "virtual worlds" with obvious commercial trappings certainly don't inspire much besides mockery.

31 of 72 comments (clear)

  1. Most Businesses Fail by hardburn · · Score: 5, Insightful

    The average success rates for most businesses is also about 1 in 10.

    --
    Not a typewriter
    1. Re:Most Businesses Fail by NetSettler · · Score: 4, Insightful

      The average success rates for most businesses is also about 1 in 10.

      Exactly. Mod parent up to 5 and let's just declare this thread successfully finished. What more really needs saying?

      --

      Kent M Pitman
      Philosopher, Technologist, Writer

    2. Re:Most Businesses Fail by mrbluze · · Score: 5, Funny

      What more really needs saying? I dunno, maybe only 1 in 10 posts gets modded up to +5, despite good intentions?
      --
      Do it yourself, because no one else will do it yourself. [beta blockade 10-17 Feb]
    3. Re:Most Businesses Fail by NetSettler · · Score: 5, Insightful

      hardburn:
      The average success rates for most businesses is also about 1 in 10.

      Anonymous Coward:
      [citation needed]

      Well, your mileage may vary, but I didn't take the point of hardburn's post to to be that he was offering precise data to be taken to the bank, nor do I think the absence of a citation invalidates the point. I took the statement to be a stylized way of asking "is it clear that this failure rate is special to the business domain?" Or, put another way, "is the choice of business domain driving these businesses down artificially, or is it the same thing that drives all businesses down: failure to keep an eye on the business need?" Even in the summary, the statement:

      From the article:
      Realistic graphics and physical behavior count for little unless the presence is valued by and engaging to a large audience.

      highlights an issue that seems certain to bring down plenty of companies (who cares the precise number?) if they fail to attend to a material customer need for which people will be willing to pay.

      After the so-called dot-com bust, for example, there seemed to be a sense that investing in things named ".com" was risky or bad. Surely people had lost money investing in this or that dot com. But not because of the name ".com". That was just smokescreen designed by some skillful person interested in face-saving to say "It's ok you lost money here. Don't be embarrassed. It wasn't something you could have forseen. It was due to the nature of the market." But in quite a lot of cases it wasn't. It was due to the idea of investing in something you didn't understand and that never had a clearly articulated plan for making money in the first place. And learning that the absence of such a plan is going to lead to problems wasn't news ... or shouldn't have been.

      So whether the poster can back that specific pseudo-statistic with a citation or not, I still think the apparent point seems valid.

      --

      Kent M Pitman
      Philosopher, Technologist, Writer

    4. Re:Most Businesses Fail by TubeSteak · · Score: 4, Informative
      http://app1.sba.gov/faqs/faqIndexAll.cfm?areaid=24

      8. What is the survival rate for new firms?

                  Two-thirds of new employer establishments survive at least two years, and 44 percent survive at least four years, according to a recent study
      . These results were similar for different industries. Firms that began in the second quarter of 1998 were tracked for the next 16 quarters to determine their survival rate. Despite conventional wisdom that restaurants fail much more frequently than firms in other industries, leisure and hospitality establishments, which include restaurants, survived at rates only slightly below the average. Earlier research has explored the reasons for a new business's survivability. Major factors in a firm's remaining open include an ample supply of capital, being large enough to have employees, the owner's education level, and the owner's reason for starting the firm in the first place, such as freedom for family life or wanting to be one's own boss. IIRC, the SBA commissioned a study that showed the 10 year success rate is something like 20%, but that figure varies up and down depending on the industry. Keep in mind that this represents Small Business, which is defined as less than 500 employees (with a bunch of exceptions).
      --
      [Fuck Beta]
      o0t!
  2. Sturgeon's Law by ozamosi · · Score: 4, Insightful
    1. Re:Sturgeon's Law by Renegade88 · · Score: 3, Insightful

      Unless it's Scottish...

    2. Re:Sturgeon's Law by Anonymous Coward · · Score: 5, Funny

      Unless it's Scottish... In which case it's shite.
    3. Re:Sturgeon's Law by NormalVisual · · Score: 2, Insightful

      I'm a regular patron of "All Things Scottish" myself.

      --
      Please stand clear of the doors, por favor mantenganse alejado de las puertas
  3. Virtual Lawyers? by CDMA_Demo · · Score: 3, Informative

    Examples would include training in emergency services within medical institutions and fire and police departments. I'll be a good exercise to try involving some "lawyery" in there. Infact that'd raise some new issues on who sues who, and where. Lets say the virtual fireman drove his truck into a virtual policeman. What will the virtual lawyer do? Might save us troubles such as these": http://www.news.com/Virtual-world-litigation-for-real/2010-1047_3-6190583.html
    1. Re:Virtual Lawyers? by CDMA_Demo · · Score: 4, Funny

      I'll be a good exercise Oh, grammar nazis! I have sinned!
    2. Re:Virtual Lawyers? by Oktober+Sunset · · Score: 5, Funny

      Oh, application-of-adequate-pressure-to-the-T-key nazis! I have sinned! There fixed that for you, you mustn't encourage them, that's like throwing chum to a shark.
  4. My Virtual World by canuck57 · · Score: 4, Funny

    While it isn't business, it is life. My virtual world has never failed me. Especially six. I live in it now. I deviate and fork when I dream. Dream I do. If I don't like things, I change it. I live two instances of virtuality, my dreams state and my outwardly facing persona.

    Best part, it works without a computer. Requires no electricity, although a few beers helps.

    Miller time!

    1. Re:My Virtual World by maxume · · Score: 2, Funny

      Miller time? I don't think you are a real Canuck.

      Also, a few beers?

      --
      Nerd rage is the funniest rage.
  5. Virtual mockery by Monkey_Genius · · Score: 4, Funny

    "...most "virtual worlds" with obvious commercial trappings certainly don't inspire much besides mockery."

    Especially here.

    --
    I've got your sig, right here.
    1. Re:Virtual mockery by Fred+Or+Alive · · Score: 4, Funny

      Surely it should be '"virtual worlds"... don't inspire much besides mockery.'.

      --
      10 PRINT "LOOK AROUND YOU ";
      20 GOTO 10
  6. Obligatory IBM conversation by colinrichardday · · Score: 2, Insightful

    Manager: Does your avatar make actual money?

    Employee: He doesn't know how to do that.

    Manager: The whole point of innovation is to make money.

  7. Network Effect by bill_mcgonigle · · Score: 2, Insightful

    Why would I want to use a low value virtual world?

    --
    My God, it's Full of Source!
    OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
  8. Re:Web Places? by owlnation · · Score: 5, Interesting

    Don't worry about it, it's Gartner. Probably the only reason that businesses fail is because they listen to the mindless, erroneous, buzzword-infested garbage that Gartner spews out every so often. Gartner exists for the sake of existing, they add no genuine value to anything, virtual or real.

  9. WTF counts as a virtual world. by Oktober+Sunset · · Score: 4, Insightful

    Does making a stupid 3D game your employees can wander about in really count as a virtual world? What if I run a Halflife server but we just wander about a map shaped like an office and chat? Can I tell all my rivals that our company has it's own virtual world?

    1. Re:WTF counts as a virtual world. by Zibblsnrt · · Score: 2, Funny

      Only if you invite them along and camp their spawn point.

      --
      "All that is necessary for evil to succeed is for good men to do nothing." - Edmund Burke
  10. Dreaming Companies by eulernet · · Score: 4, Informative

    The online game companies imagine that since there are millions of Internet users, it means that they'll have instantly a lot of users.

    It's also because they need financial partners, so they tend to inflate their numbers to attract money.
    Investors like to hear about attracting 0.01% of the Internet users, even if they have nothing new, or even worse, nothing to sell !

    Hint: I worked in 2 such game companies, and they both failed !

  11. Buzzword bullshit by 77Punker · · Score: 4, Insightful

    Transition from web pages to places? No thanks! I want a clean, simple web page that delivers the information I need in an organized and intuitive manner, not a fucking video game time sink. It shouldn't take up lots of memory and it shouldn't require much navigation, which is what web pages do and it is not what "virtual worlds" do.

  12. Um, it's Gartner by afabbro · · Score: 4, Insightful

    First, Gartner is pathetic.

    Second, there are some virtual worlds launched by businesses that have been astoundingly successful. They're called MMORPGs.

    --
    Advice: on VPS providers
    1. Re:Um, it's Gartner by Bieeanda · · Score: 2, Informative

      Yeah, but the vast majority of MMOs end up collapsing, or never go beyond a few thousand users. MMOs actually have a business function as well: you give them money for the privilege of playing, and they hope that you don't outweigh your monthly fees by using too much bandwidth or tying up other resources.

  13. Most MMOs fail before even hitting the market, too by garylian · · Score: 3, Insightful

    This is hardly surprising. Look at the multitude of MMOs that have started development, and been left by the roadside due to lack of funding for the craptastic product. Then look at all the MMOs that have died within 2yrs of launch due to lack of players.

    Heck, even some of the ones that are still going today would have died if they hadn't gotten lucky. Vanguard is only around because SOE bailed out Sigil, and the product is still not very good a full year after release. It should have never gone gold when it did, as it's now a "paid beta".

    The only thing that keeps the full numbers from looking so bad is the various "free to play but with an item mall" MMOs that come out of the Asian Pacific market. They can all call themselves successful, but they have no recurring income due to subscriptions, so they have little to no future development, and are basically "how many potions can you carry and use" games with no strategy outside of that.

    Don't think so many have gone belly up? Check this site out, and look at the number of games that were cancelled either pre-beta or during beta, or after launch. It's a lot. BetaWatcher

  14. Re:Most MMOs fail before even hitting the market, by Eric52902 · · Score: 2, Funny

    Don't think so many have gone belly up? Check this site out, and look at the number of games that were cancelled either pre-beta or during beta, or after launch. It's a lot. BetaWatcher I suspect the percentage would be close to 100% if you include all three of those ;)
  15. Re: Buzzwords by TaoPhoenix · · Score: 2, Informative


    Once you get past the Snarking, sometimes the buzzwords actually have a point.

    A Web Place requires the user to spend tangible amounts of time physically present at the place, preferably with greater than 25% attentiveness. IRC is the case study to "online in absentia".

    AOL's legions of Septemberites learned their first wee steps of the web because they responded in raucous rapid-fire quantities to each other.

    --
    My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
  16. Re:Most MMOs fail before even hitting the market, by Antique+Geekmeister · · Score: 2, Interesting

    > his is hardly surprising. Look at the multitude of MMOs that have started development, and been left by the roadside due to /* lack of funding for */ the craptastic product.

    Fixed that for you. And I'm quite serious: many of the exciting new products in many fields are proposed by people who have no idea of what the market will actually support, misled by their own hopes and the VC marketer who took the commission for finding them the money and is long gone by the time the product finishes failing. Far too many companies are producing far, far too many big projects to create a new future, rather than filling a real need. And it's easy to poison such a project with a single mistake from a single developer or manager, or a market change.

  17. Re:virtual 3d office (no - not "virtual 3d desktop by Simon+Brooke · · Score: 3, Interesting

    the most practical way to make a virtual world actually "useful" is to make a virtual office.

    My employers will sell you this. Indeed, they'll be delighted to sell you this, since we developed it three years ago and so far have no real customers. It's a great idea... on paper.

    --
    I'm old enough to remember when discussions on Slashdot were well informed.
  18. My virtual business by Skidx · · Score: 3, Interesting

    Just a little background on myself.. I run a virtual world business. Skidz Partz in second life, and while.. I understand all the laughter and criticisms, I have made my living from it making tools other gadgets. So I guess I am one out of the ten.

    One of the reason 9 out of 10 businesses fail in virtual worlds, is they are so easy to start. Its nothing to buy land (rent server space) and set up shop. You don't even have to have a product of your own. The hard part, is taking it seriously, customer support, having events and such.

    The second reason is most people open the store and think its like a web page, place things for sale and people buy.. completely automated.. no work at all.. I find, in virtual worlds the community factor is something that those 9 don't take into consideration. When coke put up there sim, it was empty of anyone that works there. People come to virtual worlds to communicate, explore, and create, and it defeats the whole purpose of the virtual world not to have a staff on hand to communicate and reach out to the audience.

    And, as far as the fancy ligth show, and physics, I would agree that the core business user of a virtual world would not care about those things, but I believe the base users do. They want a great experience with great graphics. Most people that come into second life just want to escape reality for a bit, roll play, chat with friends and those thing add to the experience. And if you have not seen the wind light version of secondlife, I recommend you take a look, its stunning.

    And now time to defend virtual worlds a bit... Last night I was searching the net high and low for a mathematical solution, but could not find it anywhere. I join the mathematics group in second life and had the answer I was looking for in just seconds. This is a great example of how the community is very powerful function in virtual worlds. In the future, I do believe virtual worlds will increase in popularity. I know IBM, Google, and Second life are working together now on something even bigger and better. While, right now, I would never suggest using second life as a work at home but in a virtual office, with the price of gas I believe something like that will become even more popular or more likely in the future.

    Well.. just my 2 cents.