Cementing the place of kids' virtual worlds in the mainstream, The New York Times has an effective roundup of the phenom, discovering that "the real virtual world gold rush centers on the grammar-school set," with the road paved by Webkinz and Club Penguin.

The article rounds up Webkinz, Club Penguin, Pirates of the Caribbean, and the products we've seen from MindCandy, Lego and Mattel. It also highlights the relevance of this boom to the entertainment biz, who may be confronting the need to deliver content to their young fans in new, non-traditional ways:

Behind the virtual world gravy train are fraying traditional business models. As growth engines like television syndication and movie DVD sales sputter or plateau — and the Internet disrupts entertainment distribution in general — Disney, Warner Brothers and Viacom see online games and social networking as a way to keep profits growing.

But more is at stake than cultivating new revenue streams. For nearly 50 years, since the start of Saturday morning cartoons, the television set has served as the front door to the children’s entertainment business. A child encounters Mickey Mouse on the Disney Channel or Buzz Lightyear on a DVD and before long seeks out related merchandise and yearns to visit Walt Disney World.

Now the proliferation of broadband Internet access is forcing players to rethink the ways they reach young people. “Kids are starting to go to the Internet first,” Mr. Wadsworth said.

Over at Bill Bishop's 'billsdue' blog, the Beijing-based head of Chinese online world creator Red Mushroom has been pointing out a fascinating Chinese MMO-related news story, involving a tabloid newspaper, NYSE-traded online game firm Giant Online, and an apparently spiked story.

As Bishop explains: "Giant Online's (NYSE:GA) ZT Online MMORPG has almost 1,000,000 peak concurrent users, making it one of the largest MMORPGs in the world. It also quite a money spinner, generating USD $54M in revenue and USD $39M in net income in Q3 2007."

However, Bishop continues: "Southern Weekend (南方周末), a popular newspaper in China known for its muckraking journalism, recently published a long article describing ZT Online. Soon after publication the article was scrubbed from the website and removed from the printed newspaper. Danwei does a great job detailing the removal. Danwei also translated the entire article into English... If you are at all interested in understanding what hooks Chinese gamers you should definitely read it."

The full article is absolutely fascinating - in fact, I'd go as far to say that it's one of the best written, most humanistic pieces on games I've read so far this year. It helps illuminate the complex social reasons that all MMOs - Western or Chinese - can be addictive, of course. But also, as Butler points out in his shrewd commentary on the piece "...goes into detail about the dirty big secret of most successful Chinese MMORPGs -- they are rife with [officially illegal] gambling."

[The preceding article originally ran at Worlds in Motion's sister weblog, GameSetWatch.]

The New York Times recently cited Webkinz and Club Penguin as the leaders of the kids' worlds craze -- so it's also no surprise that Newsday is reporting that the Webkinz site may be so popular, attracting so many users, that it's straining parent Ganz's technical capacity. According to Newsday, Webkinz has been experiencing outages over the recent weeks -- not coincidentally, holiday time, which suggests that many kids may have joined the Webkinz brigade, or bolstered their fuzzy forces, over Christmas. Ganz operations director Elaine Parson told Newsday that the site ran into "a programming issue that was unforeseen."

Newsday also spoke to "toy expert" Chris Byrne about the issues:

"It's not a conspiracy to rob children of the delight of playing with Webkinz," Byrne said. "I'm willing to bet the traffic has been way up in the past two days and inevitably when traffic spikes, you're at risk for technical problems."

In the meantime, Byrne said he was sure Webkinz customers were able to find other amusements. "They'll read a book," he said.

As the January 16th deadline for early registration approaches, we're pleased to announce more of the speakers who'll be participating in the upcoming Worlds In Motion Summit! This time, we reveal the participants of a very exciting panel on socioeconomics in virtual worlds.

Many online worlds and multiplayer games have developed their own thriving economies and complex indices, just from the in-game purchase, sale and trade of virtual items. This panel will convene executives and economists from some of the biggest, and we're pleased to present Dr. Eyjólfur Guðmundsson, Ph.D, in-world economist for EVE Online, Gaia Online CEO Craig Sherman, and John Bates, director of business development for Entropia Universe.

Each representing a different approach to the topic, the panelists will discuss the importance of virtual economics to the fabric of online interaction, and the way the virtual goods and commerce add both concrete and abstract value to the play experience. Additionally, we welcome Slashdot editor and MMOGNation.com writer Michael Zenke as panel moderator, as his strong background in online worlds guarantees an interesting and informed discussion.

Participation from Multiverse's Corey Bridges and Rafhael Cedeno, MindCandy's Michael Smith and Turbine's Jeffrey Steefel has also been announced for the event, and previously-revealed speakers include Areae's Raph Koster, Relic Labs studio head Adrian Crook, Nexon's Min Kim and Millions of Us' Reuben Steiger, among others.

The Summit, which is organized by the editors of WorldsInMotion.biz, will be held on Monday and Tuesday, February 18-19th 2008, as part of the 2008 Game Developers Conference. The Summit will focus on the intersection of online worlds and games, and the official description of the event is as follows:

"The Worlds in Motion Summit is a definitive event tailored for the growing number of industry professionals and Fortune 500 companies developing interactive online spaces for both entertainment and commercial purposes. Discussion forums will delve into online worlds, social gaming and media and player created activity.

These will provide insight for developers of all backgrounds into how the game industry is collectively building socialization into games and integrating personalization and player-generated content into gameplay — while widely accessible Web and networking tools are looking to the game industry for their way forward."

The Summit is available to attend via several different Game Developers Conference 2008 passes, and more information on the event plus the speakers announced so far is available on the Worlds In Motion Summit webpage. The deadline for early registration is January 16th, so register today!

3D virtual world and social community Xivio.com has announced it has partnered with online game company Alchemic Dream, which will provide Xivio with in-game monitoring, assistance and support.

Under the terms of the agreement, Alchemic Dream will provide email support, chat moderation, in-game events, community management, localization and marketing of Xivio's site.

Xivio's 3D Flash-driven application allows users to access all of its site's features without software downloads or additional computer configuration. Members who log into Xivio are provided access to the online social content and protection tools.

The company recently introduced online safety features including a patent-pending Open Ratings System and an educational "Parents' Zone" that lets parents moderate security settings for children's accounts. The company's rating system applies TV-style ratings to all content (photos, music, videos and journal entries) throughout the site.

Xivio president and CEO David Wisotzky commented, “As we look to expand Xivio.com’s offerings, we needed to find a partner who could assist us with the most important part of our site– the members who use it regularly. Alchemic Dream is a leader in MMOG management and their extensive expertise in this area makes them a natural fit for our future goals.”

MMO game developer-publisher IGG has announced it has raised $4.5 million in Series A funding in a round led by IDG Technology Venture Investment. The company's portal currently offers multiplayer online RPGs including Tales of Pirates, Zu Online and Myth War.

The company says the new funds will be used to expand global sales and marketing, to implement strategic plans, and to further game development. The company will also use the funds to market games in more regions and in different languages.

IGG initially launched its first game, Myth War in May 2006, and currently features a total of 6 MMORPGs. The company claims over 3.5 million registered users as of Q3 2007 across North America.

Said the company in an official statement, "IGG believes that, by growing together with the global business and technology partners as well as the royal users, it will become a key player in the online gaming world in the foreseeable future."

Here's a mag for us virtual world fans -- if you can read Japanese, that is. Japanese media company Kadokawa X already has a series of "lifestyle" publications, like Tokyo Walker, Wedding Walker and Gourmet Walker, and now they've launched a new print publication, titled Virtual World Walker, that recently hit newsstands. According to Rebecca Walker of CScout Japan, who discovered the publication, the debut issue features profiles of trendy online hangouts and dating tips for Second Life. There's also a companion website, which Walker says features a user-contributed fashion board of stylish avatars, a board where users can show off their movies and pics from online worlds, and a social network.

The website currently has tabs for There, Second Life, HiPiHi and Meet-Me, and an advertisement on the site seems to indicate that the content is also available for mobile. Neat!

[Via CScout Japan]

Evergreen Events has announced that its online focused event, OGDC, has been retitled the Ion Game Conference, set to take place in Seattle from May 13th to May 15th, 2008. This year's theme will be "redefining online," which the organizer says corresponds with an increased global focus for the event.

The company says 20 percent of attendees for last year's event were from outside the United States, representing countries such as Korea, Germany, Japan and Australia. With the aim of addressing a broader worldwide audience, Evergreen says that social networking, virtual worlds and multiple platforms beyond the PC will be a core focus for the ION Game Conference.

The company says its current deadlines for Ion remain on schedule, with the call for speakers set to close January 21st. Last year's topics included "Automating Online Game Balance”, “The Chinese Game Market: Latest Developments and Trends”, and “Secrets and Challenges of Localizing and Monetizing Different IP: Real World Cases” with speakers including Sony Online Entertainment's Alan Crosby, 38 Studios' Brett Close, and Disney Online's Mike Goslin.

Said conference director Peter Freese, “At Evergreen Events, we wanted a new identity that represented what we offer with our conference: unsurpassed networking opportunities and unique sessions and panels you cannot find anywhere else, among hundreds of like-minded online game industry veterans from around the world. Ion best symbolizes these qualities.”

A new piece at Ars Technica explores the efforts of Stanford University's virtual worlds research group to create tools that will allow more people to participate in visual design for virtual worlds. This is essential, of course, as user-generated content is one of the big drivers behind virtual worlds proliferation, so why not equip as many people as possible to create rich 3D objects and spaces?

Ars Technica interviewed Stanford's professor Vladen Koltun about the research group's current proof-of-concept, Dryad, which is designed to let almost anyone add 3D trees to a virtual world by navigating a "tree space" that refines itself by user contribution (note: Dryads are tree nymphs, according to Greek mythology). The research team hopes the Dryad technology can eventually be built upon to let users build entire worlds.

Basically, it seems to work via a visual map of various trees, and as the user selects the group of trees most like the one he or she wants to create, the visual map zooms in on a group of increasingly similar trees, the difference in attributes becoming narrower and narrower according to the user's picks, until finally the user has one single tree according to his or her wishes.

From the article:

"So, why start with trees? 'We looked at work that was done in the US Army in the mid-90s—they went through tree manuals and encyclopedias and cataloged ways in which trees differ from each other,' said Koltun. 'We probably should have created 'the Stanford tree,' but instead we found a nice Christmas tree, which is the default tree that Dryad currently starts with.'

Ultimately, Koltun and his fellow researchers hope to produce a number of similar tools for other objects in order to allow anyone to contribute to the look and feel of virtual worlds. 'We want to ensure that users always have something in front of them and are not confronted with the daunting task of sculpting,' he said. As everything from games to entire communities move into user-generated virtual worlds, these tools should help ensure that limited design skills and artistic ability don't prevent anyone from shaping those worlds."

The technology has seriously interesting ramifications for human art, visual and social study, too -- wonder what it would mean if the research results found that users consistently chose one type of tree? There's often a lot of speculation around what drives users' choice of avatar -- it's as much self-fantasy as it is self-expression. If the same technology could be applied to face-picking, for example, how many faces would be the same?

[Ars Technica - Researchers Hope To Enable Crowdsourcing Of Virtual Worlds]

As part of an in-depth new interview posted on Worlds in Motion sister site Gamasutra today, Acclaim CCO and Shiny veteran David Perry (Earthworm Jim) discussed the free-to-play PC MMO-based titles that Perry is helping to bring to market through the revitalized Acclaim.

When asked how consumer habits are being changed by the 'free to play' model, the designer explained:

"You know the company Netflix? Well, what happened? They came along with a disruptive model. I was used to buying DVDs and I had racks full of DVDs until Netflix came along and now I have that I want, whenever I want, for a low subscription fee. It's killing Blockbuster.

It's just disruption. I'm actually of the opinion that with all media, the concept of ownership is going to go away. Owning a film isn't going to matter anymore.

I have a three year-old daughter, and when she's grown up, when you think about the connection speeds and networks, she's just going to think about wanting to watch a film, any film, and it's going to be on her television. That's just how the world is going to be.

Music is going to be the same. People are already working on it. I can't possibly imagine what is going to make games not work the same way, even with the huge amount of data that is required.

The days of waiting for the distributor to deliver the games to the store and then waiting for the doors to open are numbered. You'll have a game within an hour of its release."

"I was interested in Audition because it was one of the real breakout titles in Korea. And they did a licensing deal with a company in China and the game was unbelievably successful there too. So it's really interesting to find out why and when you start to analyze a game like that, you see some really crazy game ideas, like the 'punishment move' that I discussed as an example of a way they try and break the ice for people and make them chat more. It's kind of similar to what Jonathan Blow was talking about.

I go over there and I like, look over their shoulder and I analyze it and think, 'Would that work in the U.S.? Would people get that?" Some of the stuff is just pure craziness, but some of them are actually damn good game play ideas. I think, 'That's an interesting hook! I haven't seen anyone do that in the U.S.'"

In that vein, Perry discussed how Acclaim's 2Moons is being monetized in the U.S -- including a few problems with advertising:

"It's all through item sales. We are going to add some in game advertising, optional advertising that people can turn off. We did put it in earlier but turning it on slowed down the game.

People were turning it off not because of the advertising but because it was slowing down the game. And we like to know why people turn off the advertising, so we can understand where we can go with it. If 95% turn it off when we put it in and it doesn't affect the game in any way, we'll know there's no future in in-game advertising for us."

"I'm going to do a lot of that, and some of my future games are going to be all about that. And hey, the Top Secret project is that on steroids, right? Thousands of people making a game -– managed by users, designed by users, made by users, voted on by users and then will be played by users when it's done. We're learning so much from that. It's controlled chaos: like herding cats. It's fascinating to see what works, what doesn't work."

You can now read the full Gamasutra interview with Perry, also discussing his many projects such as consulting on The Simpsons Game, as well as his thoughts on the Asian MMO market and his attempts to bring those titles to the West.

Still, the report looks ahead to a maturation of technology, and JP Morgan says that with the growing failure of portals to reach their target audience, interactive online solutions and more creative social spaces will see continued growth that keeps pace with advertisers' needs.

The report highlighted Disney's acquisition of Club Penguin in particular as evidence that kid-focused virtual worlds are continuing to grow at a fast clip -- but the researchers are not as optimistic about these kinds of products for adults.

States the report, "We are bullish on sites for children. Virtual worlds present parents an opportunity to let their kids play online and interact in a closed environment that is perceived as safe, especially when sites are operated by companies with trusted brands. We think sites aimed at adults have yet to prove mainstream appeal."

The Guardian was largely spot-on with its predictions for 2007's entertainment tech scene, and this year Aleks Krotoski takes another go at the crystal ball with plenty of picks for the gaming industry, and a few relative to the online worlds corner of things.

Among her predictions: "Games Go Social," as Krotoski explains:

"There have already been steps in this direction: the Xbox 360's December update included a Facebook-style feature for gamers ISO battle friends or foes, and Media Molecule's Little Big Planet intends to be the MySpace for gaming on the PlayStation 3 later this eyar. Social networking features are integral in several virtual worlds currently in beta, like Raph Koster's Areae, and ActiveWorlds, a pre-Second Life social virtual world, has already been integrated into Facebook.

By 2009, a game will use social networking features of an existing social network site as a series of secondary goals which will have an impact on how players succeed in the primary game.

She also believes that the future holds one component for which gamers and online world residents alike have been clamoring noisily -- a portable virtual identity:

"2008 will also witness the realisation of cross-game identities. At least one company will release a proto-product that will allow players to take experience and assets into different applications. This meta-identity will be spearheaded by social virtual worlds, but at least one game-focussed space will attempt single IDs.

The latter one is an interesting dilemma -- very desirable, and yet more technologically complex than it might appear at first blush. After all, wouldn't it require some level of collaboration among competitors? Dare we say, "open standard"? If cross-game identities became possible, commonplace and as enthusiastically received as we currently anticipate they'd be, it could revolutionize more than the way we personalize and play -- it could change the entire face of the gaming market and the online worlds space as we know them.

[The Guardian Gamesblog -- Predictions For 2008]

As the January 16th deadline for early registration fast approaches, we're pleased to announce more of the speakers who'll be participating in the upcoming Worlds In Motion Summit! This two-day event continues to gain momentum, and this time, we reveal an exciting panel focused on perhaps the biggest headline-making issue of the year: the overwhelming success of kids' virtual worlds, as discussed by the global leaders in that arena, including Club Penguin CEO Lane Merrifield, Disney Online senior vice president of premium content Steve Parkis, Nick.com senior vice president Jason Root, and Neopets senior vice president Kyra Reppen.

Prominent acquisitions, stunning user numbers, and legions of devoted young fans: social virtual worlds for children like Club Penguin, Toontown, Nicktropolis and Neopets accomplish feats of success other online worlds have only dreamed of. The message is clear: we have a phenomenon on our hands, and this exciting panel convenes the heads of these leading kids worlds to discuss the burgeoning trend, the issues unique to this space – and how they’ve nailed down knowing how to meet the needs of their audience.

Participation from Dr. Eyjólfur Guðmundsson, Ph.D, in-world economist for EVE Online, Gaia Online CEO Craig Sherman, and John Bates, director of business development for Entropia Universe has also been announced, and previously-revealed speakers include Multiverse's Corey Bridges and Rafhael Cedeno, MindCandy's Michael Smith, Turbine's Jeffrey Steefel, Areae's Raph Koster, Relic Labs studio head Adrian Crook, Nexon's Min Kim, Millions of Us' Reuben Steiger, among others.

The Summit, which is organized by the editors of WorldsInMotion.biz, will be held on Monday and Tuesday, February 18-19th 2008, as part of the 2008 Game Developers Conference. The Summit will focus on the intersection of online worlds and games, and the official description of the event is as follows:

"The Worlds in Motion Summit is a definitive event tailored for the growing number of industry professionals and Fortune 500 companies developing interactive online spaces for both entertainment and commercial purposes. Discussion forums will delve into online worlds, social gaming and media and player created activity.

These will provide insight for developers of all backgrounds into how the game industry is collectively building socialization into games and integrating personalization and player-generated content into gameplay — while widely accessible Web and networking tools are looking to the game industry for their way forward."

The Summit is available to attend via several different Game Developers Conference 2008 passes, and more information on the event plus the speakers announced so far is available on the Worlds In Motion Summit webpage. The deadline for early registration is January 16th, so register today!

With the rise of microtransactions and MapleStory, South Korean gaming has been growing in respect and relevance in the west. There's a lot to learn from this rich, constantly evolving market, which grew up along lines so different from the U.S., Japan and Europe that it's difficult to compare -- and compete with.

To that end, Worlds in Motion's sister site, Gamasutra, has compiled five complete interviews with a variety of members of top companies in the market, conducted principally at the annual Gstar trade show, to offer their perspective on the industry in 2007 and going forward.

Nexon's manager of international business development, Stephen Lee, points out that "We think that the U.S. market, as a market, it's big enough for gaming, but mainly until now, it was focused on the console game side. I think it has a lot of potential and still has to grow."

But he cautions that "Considering the market size and the existing number of gamers, I think we have a long way to go. We think in a couple of years, the situation will dramatically change." Despite relying on microtransactions for much of its revenue, Lee "can't rule out the merits of the subscription model."

Webzen's development strategy manager of global studios, Sang Woon Yoon, points out the company has one game in development in China -- as do some of the other participants -- given the rise of that market.

He observes that though the Korean market is lucrative due to its high number of online users, the packaged software market in the U.S. allows Webzen to "...calculate ROI easier than online games. Also the next-generation consoles like the 360 shows great graphics, and a lot of CPU power... We have no choice but to go for those," noting, "We can't really push for the Korean way. In America, it just doesn't work."

Yoo-Ra Kim, CMO and director of T3, the company behind the massively popular Audition, speaks on the role of traditional media in promoting the casual-focused MMO. "So now, we have a regular TV show, where we invite celebrities on TV, so they're talking about gossip things and their current views and they are bringing their new album, if they are singers. So they just introduce, and with Audition users, they play the game, on TV."

The company, however, is taking a different tack for the game in Europe, where it's struggling to find a foothold. "We will make Audition packaging that looks like a DVD case, which will have the client and some special item like clothes, and some special present inside. We'll make it very fancy, so it looks like a console game..."

The interviewees, which also include mobile developer Com2Us's president Ji Young Park and Dae Hwan Lim, Microsoft's marketing coordinator of the Entertainment & Devices (i.e. Xbox 360), were universally interested in vaulting into the console and handheld markets, and growing audiences both inside and outside Korea with these projects.

The groundwork is still being laid, however -- Nexon is working with Nintendo on MapleStory DS, but others are still evaluating the market. Lim sees the Xbox 360 market as presently laying the groundwork for consoles catching on in Korea -- "The console games market is not really successful here. We want to establish the base first for the Xbox 360 by releasing games more fit for Korean gamers. The company itself will make an investment for that. We're trying to establish the fact that games can be played by anyone, not just by adults."

For many more insights into this vibrant and unique territory for gaming, the full transcripts of these interviews are now available on Gamasutra, and over the coming week, Worlds in Motion will be excerpting the most interesting pieces relevant to the online worlds space.

Over at my personal workblog, I recently raised my eyebrows at the unwieldy press release promoting the holiday events of Chinese MMO Elf Online, which seemed funny because of its inscrutable English translation. Veteran game developer and blogger Jeff Freeman was intrigued by Elf Online too, and took an Online World Atlas-style pictorial trip through the open beta, chronicling a funny journey full of inexplicable mechanics and non-sequiturs. "As it is meant to be a humorous game, pointing-out funny things about it is not intended to be criticism," Freeman respectfully prefaces, stressing that he's actually enjoying Elf Online very much.

Freeman learns that Elf Online actually bucks some key MMO trends, offering a quest compendium, letting your pet have a job, and allowing your character to fight in baby mode. Right, as a baby.

The whole tour's worth reading; this is just one highlight:

"All the quests that I completed were all of the kill 5 of this, kill 10 of that, collect 4 of these by killing 4 or more of those sorts, excluding quests sending me from one NPC to another. Stock MMO quests.

One other quest some might consider an exception, was the become-a-soldier-quest itself, after killing 7 of something, being required to swear that my little guy would fight to the death for the Imaginary Goddess."

[Jeff Freeman -- How I Spent My Vacation (Elfing)]

MMO developer Gravity Interactive's Ragnarok Online features doe-eyed, youthful-looking anime-inspired sprites, but it seems that the developer is interested in targeting an older audience, too -- they've just announced their next online world, Requiem: Bloodymare, which as the grim title suggests, is styled as a bloody horror set in "a world where the misuse of science and magic has warped the natural world into a twisted vision of death."

Interestingly, it employs the Havok game engine, best known for lending realism in object behavior to console gaming heavy-hitters like BioShock and Half-Life 2Requiem: Bloodymare will take place in the world of Ethegia, where battles between players and mutant monsters will be rendered with graphics described as "intense" and "gory."

Set in the world of Ethegia, players take on the role of the Temperions, beings created through genetic engineering and arcane rites to engage in bloody combat with the walking nightmares stalking the land.

Using the Havok engine, Requiem: Bloodymare brings to life a visually stunning realm where fallout from generations of scientific and mystical warfare has polluted the natural world and given birth to horribly mutated monsters. The battles between players and these grotesque creatures are rendered with intense sequences of bloody and gory graphics.

Gravity CEO Peter Kang confirms that the divergent description is indeed part of a diversification strategy for the company. “We’ve dedicated more than four years of intense development to be sure Requiem: Bloodymare. We very consciously decided when we started the project that we wanted to diversify our offering to include much more than the cute, anime-inspired gameplay of our previous hits. Requiem isn’t a game for kids; this is for mature players that are looking for hardcore content that conjures up their deepest nightmares and fears.”