Hype Cycle Benchmarking in 2008

Filed under: Research by Digado

Gartner Hype Cycle Curve

Late April of 2007 Tech Consultancy Gartner made the daring prediction by the time we’d reach 2011, 80% of the active internet users would be in non-gaming Virtual Worlds. Though this was met with great skepticism (and rightfully so), Gartner explained their prediction was not just a spur of the moment. They based their ‘findings’ on their own ‘Hype Cycle Theory’ - something Gartner claims predicted the ‘Internet Boom’ of 2000. The Hype Cycle Theory is a way of describing the public relations impact of new technologies. It is comprised of 5 phases:

  1. Technology Trigger
    A breakthrough, product launch or other event generating significant interest.
  2. Peak of Inflated Expectations
    A publicity frenzy has resulted in over-hype and unrealistic expectations. There are more failures with the technology than successful applications.
  3. Trough of Disillusionment
    The technology fails to meet inflated expectations, and is shunned.
  4. Slope of Enlightenment
    Press coverage slows down or stops. Some businesses begin to find useful applications for the technology.
  5. Plateau of Productivity
    Benefits of the technology are demonstrated and widely accepted. Improvements are made to the technology–it may be broadly adopted or find a niche market.

Now the problem with this prediction is its definition of various words. ‘Active internet users’ is a little hard to measure - when are you an active user, and when not. The next problem is the definition of ‘Non-gaming Virtual Worlds’ because of the definition of ‘Virtual Worlds’. Does this include branded worlds with games, non-3d worlds such as Gaia, mixed worlds such as Kaneva, or closed Worlds such as IBM’s metaverse. The last problem is the definition of being ‘in’ these worlds. Does this mean actively using? Or has been visiting these worlds?

Redefining Gartners statement

For my own benchmarking I’ll use the following statistics and definitions. Nielsen//NetRatings estimated the ‘Active Digital Media Universe’ at about 350,000,000 users in November of 2007, this seems like a good number for our ‘Active internet users’. ‘Non-Gaming Virtual Worlds’ is a bit harder, as even Second Life has a gaming side to it, its just not its primary focus. I’ll rephrase this as ‘online 3d environments without a gaming focus’. This excludes all MMORPG’s and 2d chat boxes, but includes virtual office worlds such as IBM’s metaverse.

Last point is how to define a user as being ‘in’ a virtual world. I think the most useful statistic for being ‘in’ a Virtual World is being an active user. I’ll use Linden Labs definition on this one, meaning the user has to be inside the virtual world 1 hour ‘per reported time period’. Linden Labs uses monthly reports so our definition is ‘at least one hour in-world per month’. All this brings us to the following benchmarking statement:

In 2011, 80% of the users of the ‘Active Digital Media Universe’ will be at least 1 hour a month in ‘online 3d environments without a gaming focus’.

The last problem is to get the total number of users in all of these ‘online 3d environments without a gaming focus’. First we’ll need to compile a list of these worlds, then look at their active user numbers, and add them all together. But that’s not it. We don’t know how many users have double accounts, both registered at Active Worlds and Second Life. This will be even harder to determine in the future when new, virtual worlds emerge with niche focuses and specific goals.

Right now I think its safe to say not many people are active in multiple metaverses. Active Worlds, Second Life and IMVU are largely after the same crowds. They all offer a near complete package of virtual experiences. But when people start to have multiple worlds for multiple purposes, such as vLES for music, another world for business, another world for building, etc. things get a lot more difficult. For now I’ll go by active accounts, even though this could be the same user, until I can find some usable numbers on this.

The numbers

List of worlds in my definition of Virtual Worlds (online 3d environments without a gaming focus’):

  1. Habbo Hotel (7.5 million)
  2. Nicktropolis (5.1 million)
  3. Club Penguin (4 million)
  4. Barbie Girls (4 million)
  5. Coke Studios (4 million)
  6. Gaia Online (3.5 million)
  7. Whyville (1.7 million)
  8. Second Life (1 million)
  9. IMVU (1 million) *Techcrunch
  10. Disney’s Toontown/Magic Kingdom (1.4 million)
  11. There (1 million)
  12. Active Worlds (900,000)
  13. Entropia Universe (600,000)
  14. Virtual World of Kaneva (600,000)
  15. Red Light Center (250.000) *Wikpedia

    36,550,000 active accounts (not users) in non-gaming virtual worlds.
    30,000,000 in social worlds for children.
    These are estimates as provided by Fabric of Folly

Size Active Digital Media Universe: 350,000,000
Active users in ‘online 3d environments without a gaming focus’: 36,550,000
(very) Rough percentage active internet users in Virtual Worlds: 10.44%

Conclusion

Now of course duplicate accounts do a lot to this 10% but consider this a best case scenario. The point is not to prove Gartner right or wrong. I made my own interpretation of their statement so using it to show percentile growth over 2008, possibly up to 2011, of active users inside Virtual Worlds. It’s impossible at this point to get accurate numbers on duplicate accounts between those worlds. morso because Second Life is the only Virtual world officially publishing their number of users.

Posted on: January 6, 2008 | Share on: Digg del.icio.us Technorati Facebook

  1. The Linden Lab Dilemma: Teen Grid | Digado said on January 7th

    [...] or want to look at it, Virtual Words are currently dominated by kids. Rough estimates tell us about 5 in 6 users of virtual Worlds are kids/teens. Marketers seem to jump at the chance to market to these kids, catch them at an early stage [...]

  2. Pavig LokNo Gravatar said on January 10th

    Good article, but something strange with the stats, which I’ve expanded on at http://pavig.wordpress.com/2008/01/10/the-ol-virtual-worlds-numbers-game/

  3. The ol virtual worlds numbers game. « Pavig Lok said on January 10th

    [...] Numbers of avs in virtual worlds are hard to figure out, but the other day i was reading this article by Rick Van Der Wal and something didn’t ring true. Sure enough it was the numbers, which [...]

  4. Rick van der WalNo Gravatar said on January 10th

    @ Pavig Lok and as posted on your blog:

    I agree on all points you provide in your article - But I’m using VW’s differently then you are as explained in my article. You give another intrepretation to my intrepetation of Gartners statement - which is fine, but we are trying to prove two different points.

    Activeworlds may have been off by a lot on active numbers - and this not an excuse - but i went with the best numbers that where available to work Gartners Thesis. I think my SL estimate is pretty accurate to be honest, close to 0.5/1 million of active users at this moment.

    The point was to make a rough estimate of the percentage of the internet population ‘actively involved’ in VW’s, this is taking benchmark numbers to see growth, and wether Gartners claim (80% by 2011) is achievable. The numbers are rough estimates, correct, but they help with indicating the growth of virtual worlds none the less when taken cosistantly (ie, meaning i will use the same formula next benchmark moment).

    I appriciate all the input on the numbers I use though, and thank you for the feedback - it will help get those benchmark percentages to show ‘real’ numbers but fact is even when we finetune like this, but there is no way we can get the active users of virtual worlds entirely accurate.

  5. Pavig LokNo Gravatar said on January 10th

    aha! you used the Gartner figures. Now it makes sense. I haven’t seen reasonable virtual world figures out of any of the major consultancies yet - which is somewhat disapointing. At the time the Gartner report was published for ITxpo 2007, it is true that LL statistics were a point of contention in the community.

    All the VW’s were publishing signups (which don’t represent active use) and the ones that were publishing regular figures were making a mess of it. Linden Lab was at the start of their major hype cycle and copped a lot of flak for messy numbers, so refined their reporting to it’s current state. Most of the other VW’s were not so forthcoming.

    Even so, at the time Gartner should have realized even from the publicly given figures by activeworlds inc that their estimates on that were way out. At the time there may have been about that many AW registrations (though I doubt it as they’ve always been a bit vague and weasely with their public stats), but LL had gone from 250,000 to over 2 million in a year with no sign of slowing in the growth. If they sat on the report for a week under those conditions it would be out of date, which they surely would have known had they not simplified down to a static top ten.

    From memory many consultancies were comparing VW’s at that time based on a misunderstanding of how the “number of users” should be calculated to provide a meaningful figure. For a VW in it’s initial growth spurt, the signups figure is the easiest to sell, but to a virtual world with any significant population, active users becomes the stat to watch.

    Some worlds churn very rapidly, especially content related ones such as the branded worlds - I can’t imagine becoming a permanent resident of coke world or a bank VW. This doesn’t mean high churn VW’s are a failure, just that the churn rate should match the application. The last half of 07 was characterized by think tanks missing out on some of the basic elements of the VW equation, and from the looks of it Gartners predictions inherited some of that shaky intel.

    This is not to say that their prediction is wrong either, VW uptake is exceedingly rapid. In South East Asia the uptake is much more rapid than the U.S. and Europe - they’re ahead of us by a year or so. Predictions that ignore a market which is ahead of your own can’t be complete. Based on Gartners figures (with a bit of a reality check on what those figures really mean) I’d say their figure is ambitious, and likely to plateau earlier. Looking at adoption in Asia however it might not be too far off the mark.

    Hopefuly the metrics for virtual worlds will start to become more meaningful now that there is a meaningful market to track. Investment into VW’s now the bubble has broken should start to be saner and more performance based. Investors need to know how many folk are in them and how long they’ll be around so they can choose the VR that suits their needs.

  6. Alistair WilliamsNo Gravatar said on January 15th

    Of course the research industry has not helped with the inability to define what a unique user is for a long enough period to generate real meaningful and trend-based data. I think this scenario will continue into the future and agree there is a problem with defining relevant metrics and suggest this will be long-term.

    The problem with “non-gaming virtual worlds” at present is how they can scale up to attract the numbers suggested by Gartner. Virtual Worlds reach a point (especially in the younger demographic) where there is not enough resource to provide content that appeals and engages enough of the population. This is the point where many users get fed up and leave for smaller sites who can entertain them in a more personal manner, or where new novelty keeps them on the site for an extended time period. 1 hour is a lot and I think this will be the key challenge. habbo is currently sticky for an average of 44mins per session (Google Analytics) even with this resource. There will certainly need to be interesting strategies to drive engagement and interesting content for an increasing audience.

  7. Rick van der WalNo Gravatar said on January 15th

    Excellent point Alistair and thank you for commenting.

    In the future we are likely to see a lot more, and a lot smaller niche worlds develop (smaller in terms of potential audience, not necessarily in actual users) and this will cause the numbers to blur even more.

    However, I think we will see some applications being developed that require more sovereign attention - dedicated focus on performing a certain task such as fast inworld prototyping, or broader use of conferencing in virtual worlds. These yet to be developed applications should help make virtual worlds such as Second Life more sticky without a gaming focus for everyday users.

    P.S. would you have a link to the source of the Habbo Hotel numbers for me? I’d be most interested in seeing those.

  8. Alistair WilliamsNo Gravatar said on January 15th

    Hi Rick. I think this is true for some Virtual Worlds, but what must be remembered is that they are all built very differently, which means that some are not able to build applications like those you suggest. It is also imperative to build applications that enhance the user experience and meets the many different need of those who use general social Virtual Worlds (MMSOG’s). Facilitating the activities that meet these needs, perhaps by creating applications as you suggest, will ensure the Virtual World attracts a wider audience without the need for content to be created by the producers.

    Do have a look at my website, which shows my thought of how Virtual Worlds might build applications for mobile to further meeting the needs of the Habbo audience. http://www.alistairwilliams.com/Mobile/Mobile%20Example.htm

    You can also find fairly up to date information on Habbo stats here; http://www.sulake.com/press/releases/2007-10-25-80_million_Avatars

    Regards

  9. 10 Reasons why kids dominated VW08 | Digado said on April 8th

    [...] kidsworlds are currently dominating the market (out of 35.000.000 users of Virtual Worlds, roughly 30.000.000 are in kidswords), and have no intention of surrendering this position any time soon, with about 30 [...]

  10. Twitter is the new Second Life | Digado said on May 30th

    [...] Curious to see if once again media turns on Twitter and officially declares ‘the hype over’, much like they did with a certain virtual world in 2007 - and if this will continue to happen with start ups. Due to the serious money involved in tech news its no longer just Scoble and Techcrunch taking an interest in these start ups, more and more media and niche outlets are reporting on new internet applications. Combine this with ever growing interest and adoption of new media (its a small step from creating a facebook profile to signing up for twitter) by casual internet user and you see a pattern. [...]

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