Neat holiday tale from the BBC news about a Second Life apparel store and how the holiday shopping rush happens in-world, too. Just as retailers market, prepare and decorate for the booming shopping season in the real world, they do so in the virtual space, also. From the article:

"Megg Andrews is one content creator who through her avatar Megg Demina has developed a reputation for designing outrageous hats, which she sells in malls all around the virtual world including from her flagship shop Chapeau Tres Mignon.

She says sales in the week her winter collection launched this month matched those for the entire year as Second Life festive fun seekers and bargain-hunters flocked to her shop.

This is largely thanks to a range of stylish ice skates she designed for adroit avatars wishing to figure eight around the ice rink she paid to have built in front of her shop.

"There is a big market for everything Christmas related," enthuses Megg, who is a real life stylist and part-time lecturer at the London College of Fashion."

It's a thorough and salient rundown of the nuts and bolts of the virtual holiday economy, and worth a look!

[The following article by Simon Carless originally ran at Worlds in Motion sister site GameSetWatch.]

Over at Gamasutra a couple of weeks back, we got an interesting article submission from a Chinese-headquartered gold-selling and power leveling company, USFine.com. Though its use of English was a little iffy, the piece was notable because it tried to present a history of the ever-controversial (and likely EULA-busting) third-party item-trading business, which has thrived through use of cheap labor in emerging markets.

So I followed up with the writer, the Chinese-based 'Smith Sam', who appears to be one of the owners of USFine, and got a little background on the company he helps run. According to Sam, there are forty employees at the company, which offers power-leveling (having a third party level up your MMO character for you) and in-game gold in a pretty comprehensive set of games.

His company's Top 5 most popular games in terms of demand right now are World of Warcraft, Final Fantasy XI ,Runescape, Maplestory, and Lord of The Rings Online. But they offer services for almost 15 types of game, including Vanguard, Sword Of The New World, Gaia Online, and even 2Moons.

Although power leveling is also a major part of USFine's business, and the subject of the essay below, Sam notes that gold and/or in-game currency tends to be the best market for them overall. Interestingly, Sam also comments that Google and Yahoo! search engine results are one of the chief methods of advertising his company's services - showing how much the major generic search engines have penetrated these types of niche, potentially infringing markets.

What follows are some edited highlights from 'Smith Sam''s on the ground impressions of how this power leveling market has evolved. Of course, with major companies like the VC-funded Live Gamer trying to officially muscle in on this market by partnering with publishers for secure item trading - if not power leveling, one suspects - it'll be intriguing to see how this controversial and oft-maligned submarket evolves.

The State Of Power Leveling For MMOs
by Smith Sam

At present, most companies are engaged in power leveling (generally for World Of Warcraft) mainly in China and some countries in Southeast Asia. The primitive North America power-leveling companies changed their role gradually, or faced bankruptcy thanks to inexpensive labor in Asia.

Chinese-based game service companies offering WoW power-leveling numbered less then 30 in 2004, but service companies will surpass 2000 soon, and this number is growing continuously. Looking over the entire Southeast Asian market, many of these companies are concentrated in the Philippines, Thailand, Vietnam, and other areas in India. North Korea is worth mentioning because the labor cost is currently the most inexpensive. [EDITOR'S NOTE: This is the first we've heard of North Koreans playing World Of Warcraft - can anyone point to further evidence of this?]

Since power-leveling services for World Of Warcraft started, competition has certainly caused the price to curve down. Also, thanks to the WoW expansion, it's now changed to Levels 1-70 from its original Levels 1-60. Therefore, Levels 1-60 was originally 350 dollars when such services started, dropping to about 129 dollars in today's market. For Levels 1-70, it started costing about 490 US dollars, and has now dropped to 250 US dollars.

The variety of services now offered include specific quest completions and PVP power-leveling. For leveling itself, according to the average price, each level started costing around 6 US dollars, and has dropped to less then 2.5 US dollars. The reasons for this are as follows:

1. The power-leveling companies increased, bringing huge competitive pressure.
2. The skill of leveling is more and more demanding.
3. The large-scale company's monopoly on cheap prices causes other companies to have insufficient funds. To compete, those companies have to reduce prices to survival.

There are risks in the services provided because Blizzard continuously attacks power-levels and massively power-leveling account can get suspended and banned. However, inexpensive labor force costs and relatively high profits allows these companies to weather more risk.

As for us here at USFine.com, the company was established in August 2006. It was originally engaged in equipment resells, but when the WoW power-leveling market developed, its strategy for entering the market was to offer services "slightly lower price then the market value." In 2006, the average power-leveling price of Levels 1-60 stabilized at basically around 169 US dollars.

As a result, Usfine expanded quickly in early 2007. Usfine entered the second development phase by increasing the power-leveling service, and deliberately lowering the price for Levels 1-60 to 129 dollars - the lowest price on market; resulting in fierce price competitions from 2006 to the beginning of 2007. However, the company also encountered many problems regarding low risk control in this initial period. Therefore, some customer accounts got banned - but during 2007 Usfine has come a long ways regarding the risks involved.

Overall, the battle between leveling companies and game producers will be long-lasting. At present, there is no explicit legal rule to claim whether the service is allowed or not regarding - therefore, WoW power-leveling needs a long period to be completely mature. Everyone is waiting to see what happens.

Rounding up the year-end trends, ClickZ saw a "reality check" happening for marketers in virtual worlds. It isn't anything we haven't observed, for those of us who have been following the industry this year -- the article correctly points out the sort of manifest destiny "gold rush" to set up virtual world branding outposts without knowing why.

Forecasting the future based on lessons learned, the article pegs quality control as a big trend going forward -- that those advertising ventures that will be successful will be ones whose efforts are married to high-quality product. I'm not a hundred percent convinced that that will be the only decisive factor, similar to the lessons learned in the world of video games, when it was discovered that cutting-edge graphics and numerous gameplay hours don't necessarily compel players. Often it was the lower-res, simpler experiences that triumphed -- just look at the way things are shaping up in the current generation of console wars. The top-selling Wii is the least technically sophisticated, but because it successfully found and targeted a brand new audience, it's been an explosive success. It's not so much about getting everything right, but about knowing your audience and innovating in the area of user engagement.

Of course quality's important, but we've already seen this trend reflect in the virtual worlds space, with a product like BarbieGirls, a very specific type of experience tailored for a very specific audience, garnering millions of users in record time. Now, for 2008, can we get virtual world experiences that both maintain a new standard of quality and meet the needs of their desired userbase?

Strictly for marketers, there's one more key factor that's distinguishing itself. This year, Worlds in Motion spoke to numerous companies working in the field -- we talked to the folks at Metaversatility and Millions of Us about building virtual brand campaigns, we spoke to Makena about There.com's partnership with Trilogy, and most recently we spoke to Trilogy and Coke about the new CCMetro world. Everyone seems to agree that advertising and marketing in virtual worlds is something users want, both to enhance realism and to connect them with their favorite products and clothing styles just as they want to do in their real lives. But the difference between a successful virtual world campaign, and, say, the archetypal "deserted Second Life island" is what it adds to the world, whether or not it provides a new ability, social venue or interactive opportunity for its users.

[Virtual World Marketing Gets Reality Check In 2007 - ClickZ]

[Continuing the year-end retrospective at Worlds in Motion sister site Gamasutra, discussing notable games, developers, and industry figures of 2007, MMOG Nation's Michael Zenke takes a look back on the biggest moments of the year in massively multiplayer online games, events that heralded the five biggest trends in a year that history may show as a turning point for the genre.]

This has been an unbelievable year for Massive games. Unfortunately, I don't mean that in a positive sense. When I made a few back-of-the-napkin prognostications about the coming year in December of 2006, I thought I was being a huge sourpuss.

It turns out I wasn't nearly sour enough. Closures, projects failing in their development phase, the departure of notable individuals from high-profile titles, weak launches, minor scandals, a number of games that were just plain delayed ... it's been a hell of year.

It wasn't all bad, of course. Specifically the mainstream acceptance of World of Warcraft and the successful launch of Lord of the Rings Online speak to future successes for the genre. There have also been several 'dark horse' contenders showing their heads, plenty of new companies throwing their hats in the ring, and (finally) some measure of success for foreign games imported to the states.

Despite all these negative signs, I see 2007 as generally positive. The Massive game industry is still in its infancy, in many ways, and these failures are hard growing-up type lessons. I've tried to keep that in mind when constructing a list of the Top Five MMO Trends of 2007.

In the spirit of previous Top Five articles from other observant commentators, these points will try to sum up the most impactful events of the year for Massive gamers and the hobby they love so much... with an eye to what lessons we should draw for the future.

Let's hope looking back on 2008 will be more about sugarplums and less about coal.