Social Media Gaming and the Changing Landscape of Virtual World Viability

The virtual world industry can be a very contradictory one, where trail-blazing developers often allow vision and possibility to run ahead of market feasibility. Raph Koster's Metaplace project partnered with the virtual education firm 3D Squared to promote higher standards of hands-on technology education nationwide, but fell victim to a lack of profitability in the short-term. I even applauded Metaplace for its innovative approach to embedded virtual world spaces just hours before Koster publicly announced Metaplace's scheduled closure.

Now a similar fate has befallen There.com, which recently announced its scheduled closure after twelve years as an interesting playground for fun and research. This stands in sharp contrast to the success of social media developers like Playfish and Zynga, the latter of whom is on track for a highly-anticipated public stock offering and its most profitable year to date.

I've seen a few articles about how the closures of hyped worlds like Metaplace and There.com portend the end of the virtual world "hype cycle," with aging platforms like Second Life and new entrants like Blue Mars facing an uphill fight in a bad economy. The Escapist even reports on how advertisers are running from the current virtual world business darling, Playstation Home.

But this is unnecessarily negtive. One need only take a look at the booming market for social media games to see that the current trend is not so much the end of virtual worlds as a transition towards innovative new ways of delivering content.

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2009 in Review: How Microtransactions and User-Created Virtual Markets Reshaped Business

Zynga_0 As we close out a rocky, recession-plagued 2009, many of the real-world companies we thought indestructible last January are no longer with us. But in the virtual world, business is booming.

Pixels and Policy takes a look back at one of the biggest developments of 2009 – how a few small social gaming houses became industry titans by harnessing the power of microtransactions.

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Zynga’s Surging Revenue Shows Online Gaming’s Increasing Clout

6735_110500212090_683847090_2715127_968184_n Recent negative press about FarmVille developer Zynga has done little to rock the financial prospects of the "social gaming" giant, recent reporting by CNN and CNET reveals.

In fact, Zynga is poised to outdo the previous quarter's impressive performance before posting even more impressive financial figures amid a global recession and market turmoil.

Pixels and Policy investigates why Zynga has weathered the publicity storm, and why gaming companies are thriving in one of the largest economic contractions in decades.

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