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.

Comments

Most Businesses Fail

[hardburn]

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

Re:Most Businesses Fail

[NetSettler]

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?

Re:Most Businesses Fail

[mrbluze]

What more really needs saying? I dunno, maybe only 1 in 10 posts gets modded up to +5, despite good intentions?

Re:Most Businesses Fail

[NetSettler]

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.

Re:Most Businesses Fail

[TubeSteak]

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).

Sturgeon's Law

[ozamosi]

90% of everything is crap

Re:Sturgeon's Law

[Anonymous Coward]

Unless it's Scottish... In which case it's shite.

Re:Virtual Lawyers?

[CDMA_Demo]

I'll be a good exercise Oh, grammar nazis! I have sinned!

My Virtual World

[canuck57]

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!

Virtual mockery

[Monkey_Genius]

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

Especially here.

Re:Virtual mockery

[Fred Or Alive]

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

Re:Virtual Lawyers?

[Oktober Sunset]

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.

Re:Web Places?

[owlnation]

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.

WTF counts as a virtual world.

[Oktober Sunset]

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?

Dreaming Companies

[eulernet]

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 !

Buzzword bullshit

[77Punker]

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.

Um, it's Gartner

[afabbro]

First, Gartner is pathetic.

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