The Webkinz Effect And The Second Wave Of Virtual Worlds

If you have kids, odds are you know about Webkinz. It is a stuffed animal that you buy at retail, it comes with a nametag and code that you claim online at the Webkinz website. Once the "pet" is registered you can take part in the online community – playing games, taking care of your pet, etc… Some of the kids I know have been Webkinz crazy for a long while, and it was one of those "things to Blog about" that never saw the light of day.

In fact, I thought the Webkinz fad had passed until I saw a new crop of them yesterday, and then this article in The New York Times today – Web Playgrounds Of The Very Young.

"Forget Second Life. The real virtual world gold rush centers on the grammar-school set.

Trying to duplicate the success of blockbuster Web sites like Club Penguin and Webkinz, children’s entertainment companies are greatly accelerating efforts to build virtual worlds for children. Media conglomerates in particular think these sites — part online role-playing game and part social scene — can deliver quick growth, help keep movie franchises alive and instill brand loyalty in a generation of new customers.

Second Life and other virtual worlds for grown-ups have enjoyed intense media attention in the last year but fallen far short of breathless expectations. The children’s versions are proving much more popular, to the dismay of some parents and child advocacy groups. Now the likes of the Walt Disney Company, which owns Club Penguin, are working at warp speed to pump out sister sites.

‘Get ready for total inundation,’ said Debra Aho Williamson, an analyst at the research firm eMarketer, who estimates that 20 million children will be members of a virtual world by 2011, up from 8.2 million today."

Disney picked up Club Penguin for about $700 million dollars, and we’re reading reports that over 95% of teens and tweens take part in Online Social Networks – if you couple that with taking a look at meta trends, you’ll be able to piece together how the Web is looking to unfold when it comes to making money in Online Social Networks, Virtual Worlds, etc… I don’t like any of the Second Life is over rhetoric. I’ve heard that time and time again when it came to other new online models. Most of them wound up surviving. Pundits said the whole, "this is dead" when it came to everything from surfing the Web and email to instant messenger and SMS.

If anything, a Marketer should be able to read the article, Web Playgrounds Of The Very Young, and realize that these ramifications will make their way up the demographic food chain to their target markets. Our Marketing ability to tell a 360 degree story in a fully immersive environment that is liked through a social network isn’t Star Wars talk – it’s coming, and it’s coming fast.

These environments thrive on real dollars and Consumers’ feelings of buying virtual versus real is greying as the days progress.

"Online worlds, which typically have low overhead and fat profit margins once they are up and running, charge a monthly fee of $5 to $15 and require the adoption of an avatar. Some sites are free and rely on advertising to make money; others are advertising and subscription hybrids. Webkinz relies on the sale of stuffed animals, which come with tags that unlock digital content.

The power of the virtual worlds business was shown recently when Vivendi announced a plan to buy Activision, a publisher of video games for consoles like the Sony PlayStation 3. Vivendi owns World of Warcraft, a virtual world for adults with more than nine million members and revenue of more than $1 billion."

These new online environments will lead the charge for the second wave of virtual worlds. When I was watching some kids play with Webkinz, I had this strange realization – there was no perception that what they were doing was an online social network. No clue that it was a virtual world. It was, simply, part of the toy, the game and their ability to connect with friends. Marketers tend to look at new online channels and put them into buckets and verticals. It turns out the Web… is just the Web… and soon-to-be something much more.

This got me thinking: no New Year’s resolutions this year… I’m simply going to continue to let myself be open, to watch and see how these networks unfold. To see who is connecting with them, why they’re connecting and what they’re trying to accomplish. To not get too inundated in the technology that’s making it happen. To enjoy 2008 from all corners – virtual and otherwise.

Happy New Year. Happy New (Virtual) World.