According to a study conducted by Stamford-based information and technology research and advisory firm Gartner, nine out of ten virtual world businesses fail within 18 months, partly due to businesses focusing more on technology rather than on understanding user requirements.

Gartner vice president and fellow Steve Prentice notes that businesses need to realize that a successful virtual presence begins with people, not the world's physics: "Realistic graphics and physical behaviour count for little unless the presence is valued by and engaging to a large audience.”

Gartner analysts also blame the high failure rate on businesses starting projects for the 'cool' factor, emulating their competitors. Limited understanding of the demographics, attitudes, and expectations of virtual-world communities is also a common symptom of failing virtual worlds, as is a lack of clear of objectives.

Prentice suggests businesses treat virtual worlds as a complement to web sites, not as a replacement: “Companies need to start thinking what their virtual world strategy is, incorporate it into their internet strategy and merge their two-dimensional web pages to support a '3D web place.' Virtual world presence is not to replace the '2D world' but to supplement it.”

Gartner estimates that 70% of organizations will have extablished their own private virtual worlds by 2012, predicting that they will experience more success due to lower expectations, clearer objectives, and better constraints. Prentice advises organisations to experiment with virtual world on a small and internal scale at first, pacing their development to increase their chances of success while minimizing costs.