Virtual Worlds Valued At A Billion

    March 20, 2007

World of Warcraft, Second Life, Final Fantasy Online, Everquest and a whole slew of other online environments are booming as broadband access has continued to proliferate throughout the United States and beyond.

Virtual Words Valued At A Billion
Virtual Words Valued At A Billion

When one considers online profitability, the retail and advertising industries immediately spring to mind. Why shouldn’t they, after all?

Online retailers such as Amazon, as well as Google’s advertising network, rake in hefty quarterly margins that are sure to greatly please company stockholders. Online moneymaking, however, isn’t limited to just these two realms.

In fact, another rapidly growing presence in the eCommerce sector is coming from an unlikely source: online games.

With the success of its World of Warcraft MMO franchise, Blizzard practically has a license to print money these days.

The company boasts a subscription base of over eight million, and when you multiply that by $15 a month, you begin to see where all the money actually comes from.

An independent study conducted by Screen Digest values the worth of virtual worlds at more than $1 billion dollars, mostly based on the revenues generated from the commonly used subscription model.

According to a BBC article covering the report, “Revenues from subscriptions to MMOGs will hit $1.5bn by 2011” which may seem slow compared to the growth of other industries, but still reflects a steady increase in value over time.

The BBC goes on to quote Piers Harding-Rolls, author of the report, concerning his views on why the online gaming realm is growing so steadily:

"Over the last couple of years, certainly in Europe, the MMOG market has mushroomed partly due to the success of World of Warcraft. There are lots of things driving growth. There has been a shift from what were traditional, core games into a more casual space."

Online video is the hot topic these days, but the real dark horse player in Web 2.0 could perhaps be the revenue potential of these virtual words.