Cashing in on a distributed 3D world

Bambi Francisco Roizen · July 28, 2008 · Short URL:

Vivaty to focus on the most banal, yet therapeutic of rituals - shopping

“Five years from now a social networking site without a 3D universe will look like a dinosaur."  This was a quote from Mark Kern, president of Red 5 Studio, in a BBC piece. I’m not sure I’d agree totally with him. It’s not as if we’re watching all our movies in 3D.

But certainly, elements of three-dimensional worlds whose residents are known as avatars with, often added perks, such as wizard-like abilities to transform, will invade social networks. It’s already happening.  Vivaty, a new platform that’s trying to distribute 3D worlds on top of existing platforms, recently launched Vivaty Scenes on Facebook and AIM. Vivaty Scenes is the first application released by Vivaty, a startup that raised $9.2 million from Kleiner Perkins and Mohr Davidow last fall.

Now, you’ll be able to dress up and personalize your chat rooms with furniture, videos (from YouTube) and photos from Flickr and Photobucket. Think - MySpace dorm room, but with the illusion of depth. “It’s kind of like a 3D MySpace page,” said Keith McCurdy, co-founder and CEO of Vivaty, in a recent interview with me. “In MySpace people create 2D pages and decorate them… We’ve given users a 3D version of that.” The demographic sweet spot for Vivaty Scenes is college and early 20s.

At this point, there are limited forms of self-expression on Vivaty, though that will change in time. Keith said that the company plans on launching a developer or creator community later this year where people will be able to create 3D objects or 3D scenes that larger groups of consumer will be able to use, and in the future consume.

This is obviously a key component to Vivaty’s model, which is to address the most banal, yet therapeutic of man’s abilities or rituals – shopping. Yes, Vivaty will be focusing a lot on the selling of virtual goods, which is a significant market opportunity. Many reports estimate that people spend $1.5 billion a year in the U.S.   

“The richer the experience, the more virtual goods is a stronger model,” said Keith. So, basically, if in the real world you drive a bomb, you can look really cool in your virtual world with a 3D BMW in your virtual driveway. The incremental bucks people will pay for a 3D BMW over a 2D BMW is unclear.

But we know people will pay a few bucks regardless. I’ve paid real bucks to have virtual acorns to buy stuff on Cyworld. My virtual penguin on Club Penguin bought virtual post cards with coins, just to meet a fellow penguin. Some people are paying “zealies” on Dogster to buy virtual Gold Bone Treats for dogs. People are paying real bucks to buy credits that ultimately pay for things, like “Coral Island,” on IMVU. People are buying “Bull Black Cowboy Chaps” for gold on Gaia Online. People paid “Linden” dollars on Second Life to buy property and make this person a real estate tycoon. So, clearly, people pay for this stuff. 

The other business model for Vivaty is advertising, such as billboards, pre-rolls on videos inside the Scenes, or product placements, and the one Keith is most excited about – branded environments. For example, imagine making your scene look like you’re in that movie “Journey To The Center Of The Earth.” The branded environment has “a lot of potential,” said Kevin, suggesting that advertising in the 2D, flash-pixilated environment is not compelling but advertising in 3D will be. What he means, and is betting on, is that 3D environments will help to accelerate the "multiple billions" in revenue already being generated on both mostly 2D worlds.

As for why Vivaty wouldn’t consider a subscription model, like Club Penguin, the virtual world of penguins, which was sold to Disney for $700 million, ($350 million in cash, and the other half in earnouts), Keith said he thinks the bigger opportunity for virtual worlds is in virtual goods and advertising.

Crowded field

Vivaty is certainly not alone in this trend to provide 3D visuals in a distributed fashion. Recently, Google launched Lively, which Keith says is “similar,” adding the very politically correct response that Lively is a “great validation” for the distributed 3D idea. “Google, as well as ourselves, represent a trend of bringing the rich experiences in an easier-to-use format.” There are differences in the products, he added, without detailing them.

But it’s early in the game, and there will be a lot of people winning on different strengths, Keith suggested. One other similarity he forgot to mention. Both sites don’t support Mac computers. In this interview, Keith also touched on other potential competitors, such as IMVU – a community with 20 million members, Gaia Online and Second Life. 

Clearly, many people see the opportunities in the 3D and virtual worlds playground. In the last six months, venture capitalists poured $345 million into 39 virtual world related companies, according to Virtual World Management.



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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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IMVU is a consumer Internet startup in downtown Palo Alto. IMVU makes the world's greatest 3D chat, which is now in beta testing with customers around the world. The service lets users express themselves by creating and customizing a 3D avatar with a wide variety of clothes, accessories, pets, and scenes. The service has been live for several years, and it is generating a rapidly growing revenue stream from the sale of virtual currency. IMVU's culture is maniacally focused on rapidly developing and testing features and business ideas to learn from our customers what will make a great business. IMVU has top tier venture investors and an extraordinarily talented team with deep experience in games and virtual worlds.



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Founded in 2003 by a few comic book fans in a garage, Gaia Online has become the fastest-growing hangout on the web. Millions of teens come to Gaia every month to play games, make friends, and participate in the world's most active online community.

Gaia provides a fun, social environment that inspires individuality and creativity. With everything from art contests and poetry forums to fully customizable profiles and digital characters, Gaia is a place where teens can create their own space and express their individual style.
Fabulous Features:

    * Online Hangout: Millions of teens spend hours a day on Gaia, exploring, chatting and just hanging out. Whether they're posting on our forums, participating in special events, or playing our multiplayer mini-games, there's always something fun to do.
    * Endless Customization: Gaia revolves around creative customization. Every member can create their own virtual character and dress it up with over five thousand items: clothes, accessories, pets, masks and just about anything else imaginable.
    * Thriving Community: Gaia Online boasts one of the most active forum communities in the world with over one billion posts to date. Members can chat in our online games, post messages on our forums, or send each other private messages.
    * Gaia Gold Marketplace: Gaia Online is free to join, and members earn free Gaia Gold for everything they do on the site- posting, playing games, or just hanging out. Members can buy thousands of items in our virtual stores, or they can set up their own shops. Our virtual auction house lets members buy, sell and trade their items-- over 50,000 auctions are completed every day!
    * Fun and Games: Members can interact, have fun, and earn Gaia Gold with our quick and casual online games. They can also go head-to-head in our Avatar Arena to see who can make the coolest virtual outfit, or test their talents in the Art Arena, where thousands of members vote on the best original artwork.

Fun Facts!

    * More than three hundred thousand members log in to Gaia every day, and those members spend an average of two hours on the site daily. That means that over seventy years are spent browsing Gaia every single day! Since there are only 24 hours in a day, this will probably break the space-time continuum and destroy the universe.
    * Nearly two million unique visitors log in to Gaia every month. If we assume that each of those visitors were a quarter of a mile tall, they would stretch to the moon and back! While many of our members are well under a quarter of a mile tall, we must entertain the possibility that some members may be many, many miles tall, significantly raising the average.
    * There are over ONE BILLION posts on Gaia's forums. If each post could be melted down into a single teaspoon of pudding (and we're pretty sure this is possible), enough pudding would be generated to coat the Empire State Building one thousand times!
    * Over 190 million "Gaia Gold" is exchanged every day in our virtual economy. If each Gaia Gold Piece represented one dollar, that would be over 190 million dollars, which is an utterly fantastic amount of money. Okay, we admit that this one was pretty lazy...



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What's Vivaty?

Vivaty Scenes is a web based virtual community where users can personalize their own virtual scene and avatar and socialize with their friends.

Vivaty's vision is to make the Immersive Web a reality by transforming the flat web into a more visually rich and expressive experience that amplifies socialization and engagement. The company's end-to-end web platform is designed to enable distributed virtual experiences anywhere on the web. Founded in 2007, Vivaty is led by a team of web, gaming, and graphics experts, and is backed by venture capitalists Kleiner Perkins Caufield & Byers (KPCB), and Mohr Davidow Ventures (MDV).


Acquired by Microsoft.