Sunday, October 19, 2008

As the 'real world' gets worse, virtual words get better

If you're like every other adult I know, you're obsessing about the economy right now. Things, um, don't look so great. I've tried to put my head in the sand over the whole debacle, but this recent Forbes article caught my eye: 
"Despite all the doom and gloom, one tiny sector is offering a glimmer of hope: virtual worlds. Companies such as Gaia Interactive and Habbo (targeting tween and teen girls) are expecting a boost as consumers reduce spending on real-word goods and console themselves with so-called virtual goods." 

At first you might think that this is just another example of how parents are continuing to indulge their children with consumer goods (albeit virtual ones) but the psychology actually runs deeper than that. "As things get worse, people spend more time at movies or spend more time on a site like Gaia Online, which provides a relatively inexpensive respite from the offline world," says Gaia Chief Executive Craig Sherman.

Other kid-targeted virtual worlds like Club Penguin and Neopets have seen similar results. Teen-focused reports that 85% of the site's revenues come from virtual world transactions. This site's 2.5 million U.S. users spend an average of $18 a month on virtual goods and spend nearly 40 minutes on the site.  From a teen perspective, when you compare this to say, a trip to the mall--including the high costs of gasoline, food and premium denim-- well, the virtual world begins to look like a pretty great bargain. 

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