At the 2008 Worlds in Motion Summit, Areae co-founder Raph Koster decided to be a little cynical. He showed photos of Club Penguin, and glamorous Second Life characters with torn jeans -- and then followed them with unsettling slides of Darfur and Haiti.

"I look at what we do and I say, god damn, we're kind of irrelevant," Koster said, pointing out the schism between virtual reality and the real world we know.

Fifteen years ago, Koster found the idea of admin-controlled virtual environments unsettling -- "How much has that stunted the growth of the hypothetical cyberspace? I was typing this on a 300-baud modem and I was already upset about it."

"Today we're still downloading MUD clients. They just come with a really, really large graphic cache."

Back on Ultima Online, there was no PK switch, Koster recalled. "If we had one, the players would never deal with anything on their own. Now, it turns out it's really lucrative to be solving their problems for it and taking care of them... we make a lot of money off of that. But in terms of what is it that virtual reality, metaverses can offer ordinary people? And this is relevant in an election season kinda time... Even in the freest of spaces, 'ordinary people' are still kind of subjects to the gods. So we haven't really pushed that hard on those boundaries."

Continued Koster, "10 years ago, there I am going all crazy idealistic on everybody. We were kind of myopically caught up in the Snow Crash thing. The net was incredibly asynchronous unless you knew all these obscure telnet commands. The synchronicity is now everywhere... we all have IM, we all have presence,things of various sorts popping up. The whole self-aware community is happening in a much more thorough way than a bunch of UO players forming pixelated governments."

Koster highlighted the nature of virtual worlds professionals to focus too heavily on technology -- to their own detriment. "This isn't about tech, it's about people. Except god damn if it doesn't still seem to be about tech. We talk about the tech, we go to sessions about the tech -- why are we still watching tech? That is missing the point."

Koster used the example of the IGE legal battle and the leaked documents to illustrate the idea that because something's on the internet, it's assumed there's no governance. And, Koster says, there are only two worlds he can think of that have a system in place for user rights and information protection.

"We haven't even agreed that 'don't spy on your users' is a good idea," Koster added.

Overall, Koster urged the audience to think beyond their own solitary sphere, to be conscious of the "inbred lingo" we use, and to be aware of how many concepts we take for granted.

"Too many of the predictions that I cared about haven't come true, and too many of the easy, lowball ones came true," Koster said. Virtual worlds, he argues, have the potential to play a role in broader social causes.

When weighing the enormous success of Club Penguin -- "monetizing eight year olds," said Koster -- against larger dreams, he says, there are four sides to every story. Person A, he says, would be skeptical of the commercialism, while Person B would support the aims of Club Penguin in aiming, idealistically, to create the safest possible kids' worlds and donating 10 percent of their profits to charity.

"The truth lies somewhere in between," Koster said, for this example. "What we tend to read about is about what we have, who's making the money, who's bigger and that kind of stuff. Reading about the dreams? That's the human interest story that shows up once every three months."

"What is our imperative in this room?" Koster asked. "Why do we do this? And what are we aiming at? Is it financial, is it moral? It's great that we have the idealism, but are they shipping products? And it's great to have the commercial aspect, but, well..." Growth won't come from either idealism or commercialism, but from an overall imperative, he said.

"The interesting thing is that I remember making remarks a few years ago here about how it's a little weird that the future of cyberspace is going to be established by game designers. Then, other people actually came along and kind of snatched that from us. ...It's more being set by search engines," Koster continued.

"I don't want my virtual life to be a search engine -- I'd rather it was more game-like," he added. "But what we have tended to make has been not parks, but theme parks. What we've tended to make has been over the years more about reducing the scope of possibility than about expanding it. We've been reducing the scope because it makes it more consumer friendly." Why, he asked, can't a product be both consumer-friendly and empowering?

"If there's something virtual worlds can do, it should be about breaking the tyranny of that kind of tragedy of the commons," he said.

Most of all, Koster stressed, replicating real life in a new context is not an advance. "Don't get me wrong -- the democritization is a great value. But it's not that democratized. These [success stories] are wonderful, but we're just scratching the surface here. We have a long, long list of things that we could be doing, and aren't."

This afternoon at the Worlds in Motion Summit at GDC, GoPets.com CEO Erik Bethke gave a talk concerning the cross-over of traditional MMORPGs and Virtual Worlds.

An area focused on by many in the industry is the constant struggle of the User Interface. Bethke thinks of this as misplaced focus in that “You need to think about the core of the virtual world, [that] trumps any UI problem you can think of. UI is never the problem.”

Using World Of Warcraft as the basis of his comparisons, he mentioned than many in the virtual worlds industry look down on WOW because it all comes down to “killing monsters and taking their shit.” Showing a screenshot of the game overflowing with windows, hotbars, and myriads of other UI covering almost every corner, he made the point that “You can have a super complicated UI and still make over a billion dollars a year.” To give further context to the importance of this, WOW’s 10 million subscribers is equal to around 5% of total television viewer ship and equal to the entire Xbox 360 user base.

In trying to determine what the appeal is, Bethke showed another screenshot from WOW, with a goblin with a yellow exclamation mark over his head (this indicates an available quest). “That’s what’s missing from so many virtual worlds. No guys with yellow exclamation marks over their heads.”

At the 2008 Worlds in Motion Summit, Adrian Crook opened his talk on free-to-play with a look at the larger trends surrounding the business model in the real world. In Vancouver, ad revenues are used to offset the costs of public toilets. Musical artists like Radiohead are using the "name your own price model" and finding success. And European discount airlines like RyanAir utilize the free revenue model by charging for cargo and incidentals, and by negotiating reduced landing fees at airports.

Back to games, Crook said that free to play doesn't belong to a different genre -- fishing games, golf games, RTS and FPS can all be free to play, so it's more than just the casual MMO or virtual world. It's also platform agnostic -- Crook named the PlayStation 3 and the iPhone as avenues beyond the web-based internet.

The increased traffic that free to play invites allows content to be monetized through a broader variety of vectors, Crook notes, demonstrating examples such as Nexon's KartRider, Jagex's RuneScape (which uses a tiered subscription model featuring a free option), and Webkinz, with which the users pay for the toys, but not for the online content. And, of course, Club Penguin, with the same sort of tiered subscription model.

"With free to play, it's all about monetizing attention," Crook pointed out. Among the worlds with the highest userbases, only WoW charges subscriptions. 91 percent of the online PC gaming that kids under 18 do is of the free to play variety, noted Crook, citing NPD stats.

Crook discussed just a few on a long list of free to play revenue models, starting with virtual item sales. "It allows the users to decide their own ceiling," Crook pointed out of this option. The value drivers for virtual goods are their price, rarity and visibility, he explained, with each of these contributing to how much an item is worth to its users. Most of these games, Crook added, utilize a dual-currency system, which allows users to purchase stuff via in-games efforts alone -- in other words, an attention-based currency -- and a real money-based system for the "cash rich, time poor."

Virtual items offer a small conversion rate -- some 90 percent of users will never purchase them, Crook says. Some are consumables, for example, the $10 virtual rose at HotOrNot.com. And yet, he says, it's one of the site's most popular items.

Another revenue model Crook discussed is merchandise. For example, BarbieGirls.com has acquired 9.5 million users in 9 months, through sales of the Barbie doll-shaped MP3 player. Webkinz did $20 million at retail for their plush toys, and MapleStory has an alternate revenue stream with its collectible card game.

The Facebook game Food Fight uses what Crook calls an information-based revenue model. "What's interesting is that their revenue model, at the height of this app, they were getting 36,000 users daily. Now they're getting about a tenth of that due to the viral, flocking nature of Facebook games. And each user would have to fill out two marketing surveys in order to buy the cheapest virtual item there." And yet, Crook pointed out, this would result in a profit for the marketer. Though he admits these are "back of the napkin" calculations, Crook says this example is illustrative of potential to earn significant ROI from a free to play game without ever requiring users' credit cards.

There are design considerations surrounding the efficacy of the free to play model. First, Crook advises creating an environment where the free players receive -- both from the developers and the player base -- an equal level of respect to the paid players. Second, the game should support integrated graphics, be browser-based (or a small download), offering a regional payment system, and providing short compulsion loops to keep players engaged. Finally, user signups should be deferred or minimized as much as possible to allow people to get in immediately and then gather their information incrementally.

Crook points out some growth challenges to free to play, though he notes these are definitely not deal-breakers for the business model. First, there are virtual property challenges. "At some point that's going to be decided by the courts. Hopefully we're out ahead of it," Crook said, pointing out Eric Bethke's forward-thinking endeavor to create an avatar bill of rights. Second, there are differing broadband speeds. And rising development costs will become an issue now with the advent of Electronic Arts' highly-polished Battlefield Heroes. Larger-scale F2P products are going to raise the quality bar, Crook says.

Second Life's slowdown may scare off investors too, Crook adds. Secondary markets, such as those enabled by LiveGamer, may be a risk, too. Finally, after age 18, statistics show females leave gaming and males move to the consoles and away from F2P -- so keeping that userbase engaged is still a challenge.

On the first day of this year’s Game Developers Conference, a talk was held by Reuben Steiger, CEO of Millions of Us to discuss the marriage of entertainment brands and online worlds.

Steiger began the company 19 months ago when he saw “was at a certain point, Second Life became [big]... there’s an interest from corporations when a population gets large.” The company was set up to help these corporations understand how to use virtual worlds to not just make money, but to enhance and enrich other mediums, and to ensure that “Second Life was not a singular phenomena.”

He sees virtual worlds as “sharing genetic material with pre-existing media... film, games, theater.” He illustrated the idea of virtual worlds as a storytelling opportunity by showing a side by side comparison of a photo of a group or real life people gathered around a campfire, and a virtual representation in Second Life. Stories around the campfire are “something that’s been going on for hundreds of thousands of years.” and storytelling itself is the “bedrock of human culture and communication.” But in the Second Life version of the campfire, the congregants are from all over the world sharing the same virtual experience.

Despite the hopeful nature of the comparison though, Steiger says that “the Internet has sort of failed as a story telling medium.” mentioning funny videos of a monkey falling off a tree branch, or the infamous Star Wars kid. “There’s a place for that, bit it’s not [currently] a foundational medium that will change how we think and live.”

At today’s Worlds in Motion Summit at GDC, rmbr.com’s CEO Gabe Zichermann gave a talk concerning game-centric approaches to making web content more fun, or as he defined it, “the use of gaming design in non-gaming contexts.”

Pointing out that this concept already exists incidentally, he discussed three examples of what he called “incidental funware.” The first example was Ebay, which he sees as “two games in one. It is A.) A shopping game [and] B.) A meta-status game.” saying that it may be more accurate in a way to describe people not so much using Ebay, as playing it.

His second example was Facebook which “looks, feels, smells like a game.” lastly was Yahoo Answers, which he described as “a research game [and also] a status game.” He brought up these tree examples to make the point that “there isn’t a singly type of application that wouldn’t benefit from being more fun.”

Going further with the Facebook example by comparing to a virtual world (in this case describing Facebook as a “non-fiction” game), Facebook has “so many more users, and hours spent on [it] than any comparable virtual world”. Looking at why it was so compelling he broke it down into the following reasons: it’s easy to use, 2d, html. It has tangible benefit in real life. It’s free without any hidden frees. It’s fun, describing it as a “socially-propagating story”. And status, likening it to a fireplace mantle of trophies, except you don’t need to invite people over to your house.

This led into talking about his company, rmbr.com. “We built an application that is a reflection of my discontent with photographs in real life.” Instead of having someone show every step of their trip to Peru, he wanted to be able to see the photos that would hold interest to him. He demonstrated a feature in which the user can import photos from flickr, then have them used in mirco games such as a memory game using those photos.

Another game was called Photo Psychic, which asks you a series of questions about a person’s photos such as, ‘what tagline did they write?’, or ‘what mood did they assign?’. At the end it will give you a rating as to how well you know the person.

Speaking broadly about funware, Zichermann said “I want to fix the shopping experience. I want travel to be more fun... and I want product makers to be more fun” saying automative companies web sites should be more entertaining. “Financial services could use a makeover.”

Summing things up well, he said that “there’s no upper limit, everything can be made more fun.”

Multiverse has built its own technology to allow anyone, as the founders say, to build a virtual world. "If you've got the Multiverse World Browser installed, you have access to any virtual world on the Multiverse Network," said founder Cory Bridges at the 2008 Worlds in Motion Summit.

The platform is free to use, the SDK is downloadable without costs and, Bridges says, worlds built on the network can be used for any purpose. They monetize based on revenue share once a developer starts to earn money from the project.

"What we learned from our time at Netscape is, what really brought the web into mainstream adoption is this universal browser, this one program that lets consumers access all content on this particular medium," Bridges explains. In the early days of the internet, the different domains of CompuServ, AOL, Prodigy and others were like "walled gardens," which kept the market fragmented. This is, according to Bridges, an issue we're currently having at this stage for the virtual worlds industry. "That tends to hinder adoption of this new medium," Bridges says. "It keeps the market fragmented, and to create a universal browser for whatever medium you're talking about, the best way to do that is to embrace open standards."

And not merely open standards, but industry standards, too, Bridges says, pointing out that building content in Second Life requires use of the in-world tools, requires users to learn a scripting language that is only useful in that world. "For critical mass, unleash the masses," Bridges says, explaining that the reason Multiverse is structured for as broad a variety of purposes as possible.

"The point here is that flexible technology is the key," added co-founder and CTO Rafhael Cedeno. "We wanted to create a technology that allowed a lot of flexibility, so that you can use a single browser and a single server to have all sorts of different worlds. You have people used to modding the Unreal or Quake Engnine -- can you really make a single client or a server that will run any kind of virtual world?"

Bridges and Cedeno demonstrated several different types of worlds that have been built on their platform, and, true to their explanation, the purposes of these products ranged from sci-fi MMORPGs to business simulations for employee on-boarding, to replications of real-world places such as Times Square. Ultimately, Multiverse says that open-standard industry technology that supports as many different types of worlds as possible and allows full UI control is the key to evolving virtual worlds beyond the "walled gardens" phase and into much broader adoption -- the same maturation process that the web went through.

The pair have learned some lessons from their experience that they highlighted for the attendees: Virtual worlds must be fun, Bridges says. "You go to all the trouble of making a 3D client and all you do is sit there and talk?" Even for developers who aim to build a social space or an educational environment, Bridges says, game-like content is important. He notes that many people in the industry see "game" as a bad word, but suggests they might be more amenable to the phrase "structured interaction."

What does a platform have to do with fun, however? The Multiverse platform comes pre-configured with a variety of mods, such as combat, to allow developers to make those choices, Cedeno explains. Otherwise, he says, users will not remain engaged -- they'll arrive for a week or two, customize their avatars, and then leave.

The presentation concluded with a demonstration of the virtual Times Square -- which, as the writer of this article can attest, was an eerily accurate representation, right down to the signage and the names of the stores.

"A lot of what we do is give the right tools to put a world like this together, but a lot of what we do is also leveraging those tools," Cedeno says. "I think that a lot of us are used to, or have been ingrained with an idea of what a virtual world would look like, and yet it's not the type of quality that you see when you pay $60 for an Xbox 360 game."

Finally, the pair concluded, virtual worlds should be accessible to everyone. "You want anyone with a computer to be able to access that," Cedeno said, and advised aiming for the right balance of high-quality, polished looks created using technology that can run on as many machines as possible.

Habbo lead designer Sulka Haro was at the 2008 Worlds in Motion Summit to discuss the surprise success of his online world targeted primarily at kids and teens. Haro admits that he never planned for Habbo to grow so large - so what perspectives has the Finnish designer gleaned on his way, and what's his secret?

Haro showed off Habbo's funky avatars, customizable bedrooms, and social element. As we saw when Worlds in Motion took a trip to Habbo for our Online Worlds Atlas, the currency system is credits, which allow users to build and customize more. For example, Haro showed off a Harry Potter-themed Hogwarts world that the users had built.

Users also like to roleplay more mundane things -- surprisingly, they enjoy playing minimum wage jobs such as serving at McDonalds. While this seems perplexing at first, Haro notes it makes sense for kids who have teenage elder siblings who really do those jobs, and the kids want to roleplay to understand their siblings' experiences.

It actually comes down to what teens want from life. During the teenage years, it's rare to find individuals who are as "cool" as they would like to be, who have as many friends as they aspire to be, who have their own room that they can decorate any way they want. So knowing the audience's desires and creating an opportunity for them to experience that is part of Habbo's appeal for its young users.

Habbo also equalizes its audience -- all avatars on the same height, and there's no voice chat to better allow people to personify their dreams. During his session earlier in the Summit, Raph Koster pointed out that differences among avatars can create the same kind of complex issues that they do among humans, so Haro feels that this even playing field helps with the appeal.

The top-selling item in Habbo is a polar bear-skinned rug, popular despite a majority of kids expressing concern about the environment in a survey the company did with Greenpeace. The second highest-selling Habbo item was the Christmas-themed reindeer toys on wheels that come with reindeer poop. "If people say shit don't sell, then just make a virtual version," Haro joked.

Currently Habbo operates in 31 markets globally and has sustained up to 100,000 users concurrently. But the company started small, Haro says. In 2000, it operated smaller services, like chat rooms, that while "promising," were not as popular. In August 2000, though, Habbo launched Hotel Goldfish, an early precursor to Habbo. In 2001, Habbo Hotel opened in London. And since then, it continues to grow into the millions.

A secret to the explosive growth? It was as simple as the splash page. Haro says they were able to double revenues by changing the way they communicate with the users, something as basic as ensuring the screenshot on display was representative of the actual environment.

"The retro pixel look was designed for young, design-conscious people," Haro says. He also explains how it gives the environment longevity -- 2D graphics look largely the same as they always have, but 3D graphics age fast.

The philosophy of Habbo, Haro explains, is, "give users tools and space, and something will happen."

"I'd say we'd failed if we hadn't grown as much as we have," Haro says, pointing to the way the MMO market has grown exponentially since 1997. In the face of all that growth, he says, it's only right for successful individual projects to develop at the same rate.

Turbine executive producer Jeffrey Steefel was at the 2008 Worlds in Motion Summit to discuss the ways the spheres of traditional online games -- like his Lord of the Rings Online and virtual worlds are alike, and how they can benefit and evolve from one another's differences.

So why do "worlds" need "games?" "Coming into a completely open environment, for a lot of people, is very overwhelming," Steefel noted. "Especially when you're reaching out to a broader audience."
So structure is very important, he stressed, for any open-world environment. And while games are a great reference, it doesn't necessarily need to be one.

The first structural element to add in an open world, says Steefel, is a sense of place. Elements of place create points of reference for the player. Secondly, a sense of purpose. "Where am I? Why am I here, and what do I want to do?" Asked Steefel, noting that certain things that dictate purpose are necessary. "There needs to be something to tell me 'I'm here for a reason,'" Steefel said.

Finally, world users want to build a community based in identity and expression, Steefel said. Whether a real or fictitious identity, users want to express their own personal response to the place they're in and the goals that have been set.

"The biggest interesection to me between games and virtual worlds is that games provide structure by their very nature," Steefel said. "That gives them some limitations, but I think there are things we can borrow from that to make sure these environments really have that sense of place and sense of purpose that spark creativity."

There are multiple kinds of virtual environments in existence today, and Steefel says the most exciting part is how these different environments are beginning to converge. He demonstrated a Venn diagram showing the convergence area between social networks like Facebook and IMVU, MMOs and online worlds like Habbo.

"We can get distracted easily by the word 'entertainment,'" Steefel says, "...But to be honest, any kind of interaction is entertainment." All of these approaches to entertainment media have their pros and cons, Steefel notes -- the directed experience of MMOs, alongside the focus on builders and the environmental openness of virtual worlds, beside the ease of use, accessibility and connectivity of social networks.

On the downside, MMOs suffer from the limitations of their structure, while social worlds tend to suffer from the lack of unifying thematic elements. "They might have different areas with unified themes that are created by users, and that's the place we need to focus," Steefel says of traditional social worlds, "But it can become very chaotic."

All the approaches, however, have key traits in common: A focus on identity, the creative expression of that identity, and the persistence of the world. "This identity, this world I'm creating... is not just something that exists for a moment in time," Steefel illustrates.

"Access is our biggest challenge," Steefel says. "It's in direct conflict with trying to make this immersive, rich experience." The focus, he added, needs to be how to make the technology accessible to more people, and this, he says, is something that MMO developers have only just begun to focus on. Whether you're an MMO developer trying to make your world more accessible or a virtual world developer trying to create more thematic consistency, the solution lies in the balance between freedom and structure, Steefel says. "That balance... is something that we have to focus on all of the time."

The task is further complicated, he continues, by noting that even within the same gameworld, players have divergent motivations -- some just want to explore, while others want to organize and gain power, while others are there for a sense of community. And yet, virtual worlds are still a nascent medium where the community is still small as compared to other forms of media.

"How do we reach that critical mass?" He asked. "For MMO games, the challenge for us is we need to be less narrowly-defined. They tend to focus on a specific type of activity, a specific type of person and behavior. How can we open that up? How can we create an environment that has many more opportunities for different types of behavior?"

At Turbine, Steefel says, they've already begun to attempt to answer these questions, focusing on the strengths of both the MMO and the virtual world. In his experience, the strengths most viable to build on from the MMO sphere are the immersive sense of place, the unifying world themes, and advancement opportunities that players find compelling. And MMO companies need to take those strengths to a broader audience through multiplatform access, more mainstream client requirements, providing immediate interactivity and feedback, improving user tools and developing more accessible pricing models.

"The world itself needs to be web-aware," he continues. "How are these environments seamlessly coming together?" He also talked about mobile lifestyle integration. "If you look around you... mobile lifestyle is becoming a part of everybody's everyday experience. And how can you take that, and blend it in with these environments that you're creating? How... is this connectivity, this world environment, tied to these devices?"

The value proposition between the consumer and the operator is a "spectrum," Steefel adds. "There are all kinds of ways for you to participate. How I participate in the business that runs this virtual world should be different depending on what my needs are," he says. "Do I want to play a little, or do I want to play a lot? Do I want to belong to social groups in this environment? What I want to do in the world should determine what it costs me to participate in this world. Or give me opportunities... to help the business sustain as a world without me having to pay a fee."

In-game data, such as social networks and character profiles, should be "turned inside-out" and exposed to the web. For example, Turbine has borrowed Google Earth's API to offer players maps of quest locations on the web. And the in-game encyclopedia is hyperlinked to the web, with all sites connected to a player-contributed wiki. "It's really their database," Steefel stressed. "It's their lorebook."

The ultimate goal is to create a "full-time existence" for the users, as opposed to a "walled garden" disparate experience that someone can only interact with sitting at the computer inside a 3D client.

On the second day of the Worlds in Motion conference at GDC, Nexon America’s director Min Kim gave a talk concerning the many obstacles to overcome in bringing a game into different markets.

Beginning with a general overview of the company, he described Nexon as “the global leader in online casual games.” Established in South Korea in 1994, they are actually responsible for the world’s first graphical MMORPG Kingdom of the Winds, developed in 1995.

Since then they’ve turned into a company that “grossed $250 million in 2005... has over 1,600 employees [and] 15 plus games in service globally.” Explaining what led to this success, Kim categorized Nexon’s products (which include the popular Maple Story) as “Fun and social... subscription free... free to download [and have natural] mass market appeal.”

He went on to point out that over 86% of that revenue came from virtual item sales, “That’s Nexon’s primary revenue source... give the social experience away for free, and generate revenue by enhancing that experience.” adding that this model allows you to approach the user whose not willing to pay $15 a month and in addition get a user who may be paying $20 a week.

Mind Candy CEO Michael Acton Smith says that toy companies have embraced virtual worlds with what he calls "great gusto." Smith was at the 2008 Worlds in Motion Summit to discuss the ways physical products can interact with virtual worlds.

It was Smith's first time, he said, demonstrating his company's Moshi Monsters virtual world outside the UK. The Moshi Monsters world consists of cute, cartoonish monster pets that have a corresponding real-world component: a cell phone strap creature that lights up when the phone rings.

Though Webkinz still has a ways to go to match the popularity of Beanie Babies, it's well on its way, Smith said, noting that it did $20 million in its first two years. "So why, as a game designer, should we care? Why should we bother thinking beyond the screen?" Smith posited. One reason is that toy tie-ins are not only an additional revenue source, but they allow for a deeper connection with the users.

Mind Candy set up a few years ago with a focus on social games, beginning with the ARG Perplex City. Moshi Monsters is the company's second product: "Imagine Tamagotchi mixed with Facebook, and a little bit of Big Brain Academy thrown in."

Smith said he'd been interested in the virtual pet space for years, intrigued by the progression of phenomena like the pet rock, tamagotchi, Neopets and Furby. But the timing seemed to be right for Moshi Monsters since the evolution of Flash technology and broadband.

With Moshi Monsters, Smith aimed to create a lot of social tools, and a responsive pet that evolves depending on user behavior. In particular, though, he stressed the educational element: "Kids will be learning in a stealth way," Smith said, pointing out educational and vocabulary-building games and puzzles that are part of the Moshi Monsters world.

Moshi Monsters uses a business model similar to Club Penguin, with a tiered subscription model and a free mode. Though the cell phone accessories are currently the only merchandising extension, Smith says he plans on plush toys, coloring books and other points of access for users.

Ultimately, Smith says, the online products of the future can rely heavily on these kinds of merchandise extension models to offer deeper levels of engagement to their users through tie-in toys, activity books and clothing.

For the final discussion at the Worlds in Motions summit at GDC, a panel talk was held with the people behind some of the most successful virtual worlds running. Amongst them were Paul Yanover from Disney Online, Lane Marrifield, co-founder of Club Penguin, Jason Root, Senior Vice President of Nick.com & NickatNite.com, and Kyra Reppen, Senior Vice President of Neopets. The panel was moderated by Leigh Alexander, Worlds in Motion editor and summit chair.

The panel started with examining how each decided to focus on the kids’ market. Paul Yanover, being from Disney, started off from “[the] revisionist side of things.” In the 90's, Disney Imagineers began experimenting with virtual reality and “though that didn’t really pan out, that team built great tech and art” eventually those ideas became Toontown.

For Lane Marrifield, “We didn’t have an identity to start with, other than we had kids.” He discussed looking at what was available for kids, what they liked, what they didn’t. “ [We] map every decision we make around the experience of six year olds, well, my six year old really.”

Jason Root said at Nickelodeon they “Saw patterns on how kids were using our site, and the web at large.” 84% of kids are playing games online. “We wanted to evolve [game playing] into a ‘place’, we wanted to bring those things together.” with focus on mixing branded and non-branded content.

With Neopets, Kyra Reppen said that there is a “[natural] emotional connection with pets.” their virtual world “just started out being fun, but it’s endless how much can be done with it.” citing the incredible community of virtual entrepreneurs.