CNET is reporting that Hoover senior fellow and Stanford professor Michael Boskin will become chairman of the Council of Economic Advisors for Gaia Online; he'll head up the new organization for the teen and 'tween-targeted online world (CNET's count is 2.5 million monthly participants and over 100,000 daily transactions) and provide "ongoing guidance and analysis" of Gaia's virtual economy.

This isn't the first time a virtual world has brought in a qualified real-world economist to oversee in-world transactions; EVE Online announced a similar move earlier this year.

As the CNET article correctly notes, it might be surprising to some to see a man with Boskin's credentials putting his muscle behind the online economy of what is essentially a kids' game. Not only is Boskin an academic, the article says, but he serves on the boards of companies like Exxon Mobil, Oracle and Vodafone. According to his Hoover Institution biography, he also serves "as an adviser to presidents and prime ministers, finance ministries, and central banks around the world, from the United States to China."

"I find it very interesting how many people are willing to spend time" in the virtual world, Boskin told CNET News.com, adding that he was attracted to his new role by "how the economy of these sites, and in particular of Gaia, have evolved; how people are making decisions on how to spend their time, (and) how much time to spend."

Essentially, Boskin said, an economy is an economy, regardless of whether the participants are teens in a virtual world or captains of industry in the physical world.

"The fundamental similarity is people making decisions about how to allocate their time and use their skills," Boskin said. "That is at the core of what is similar about them. There's some things we can learn about what (is going on) in the real economy by what is going on in Gaia.

According to CNET, Boskin will retain his roles at Hoover and Stanford -- but it's interesting to see a qualified real-world economist start considering virtual worlds as a viable, informative and constructive professional avenue.

[Via CNET.com]

Sony Pictures Television and Warner Bros. have each signed a licensing deal with Gaia Online that will bring films to the teen-and-'tween virtual world. The agreement also gives Sony a minority stake in Gaia -- which in its announcement claims nearly 3 million unique visitors a month, or more than either Second Life or Habbo gets.

The new Gaia Cinemas is open for business, and users can watch free films in-world, beginning with Sony's Gattaca and WB's The Matrix -- both futuristic tech flicks, appropriately enough. The big question -- how's the content getting monetized? Apparently through advertiser skins surrounding the film screen. Said Sony senior executive VP Sean Carey, "I think it has the ability to create an incremental revenue source with more potential than just solo viewing."

According to the Hollywood Reporter, the studios will also have flexibility to alternate between the ad-supported model -- which will also give them a cut of virtual goods revenue -- and ad-free pay-per-view, for which Warner will charge $1.99 per ticket for 24 hours' access to the purchased film inside Gaia.

The agreement provides for 50 library titles each from Sony and Warner to Gaia -- Spider Man, Batman Returns and Ghost Rider, to name a few. Sony will reportedly begin supplying other programming in the future, like the television "minisodes" it has designated for digital platforms. Though there are currently no plans to show current releases in Gaia, it can't be ruled out depending on the success of the format for older titles.

Another interesting tidbit picked up by the Hollywood Reporter --while Sony wouldn't discuss its stake in Gaia in specific terms, "the company is believed to be one of a number of investors participating in a Series B round of funding totaling $15 million."

[Via Hollywood Reporter]

Gaia Online has announced it's received an investment in an undisclosed sum from Time Warner, as part of a $12 million financing round completed last year. According to the Hollywood Reporter, Time Warner doesn't score any managerial influence over Gaia from the investment.

The investment seems similar to one Gaia recently picked up from Sony, at the time that Sony and Warner Brothers agreed to bring films into the Gaia world. It's recently begun featuring those movies, and Gaia CEO Craig Sherman told the reporter those features have been "extremely successful."

It's possible that Time Warner will also begin bringing some of its properties into the Gaia world; none of the terms of the investment were revealed.

[Via Hollywood Reporter]

Mochi Media's online games ad network MochiAds has launched the "Flash Rock Star Games Contest” with Gaia Online, hoping to recognize talent among new Flash game developers.The three-month contest will accept game submissions to be judged by a professional panel with input from the Gaia community. The contest winner receives over $25,000 in cash and prizes, and possible game development contracts with Gaia.

Flash games are currently considered a major growth area for casual online gaming -- MochiAds says one in three Internet users plays casual Flash games online. They require fewer developer resources compared to traditional games, and distribute easily in the free-to-play format. Because of the reduced resource requirement, the Flash development scene attracts many independent developers, and MochiAds says it hopes to help bring some of this innovation to light.

MochiAds offers a custom API allowing developers to create games with custom leaderboards and the ability to communicate with publisher sites. Gaia Online integrates MochiAds games into its chat and avatar system, through an agreement that provides Gaia with a premium catalog of games through which Gaia users can earn virtual currency and goods for playing.

Mochi Media CEO Jameson Hsu commented, “This contest is a unique opportunity for Flash game developers to get the exposure they deserve. There are a lot of talented developers out there, and we’re excited to bring them tools that increase community interaction with their games.”

Partnering with Project Runway season 4 winner Christian Siriano, Gaia Online has announced that it will be hosting a four-day virtual prom event, titled Prom Crashers. Siriano has designed an exclusive line of fierce avatar prom garb for the event and will reward one attendee with a real-world, custom-designed garment.

Gaia Online users aged 13 and older can register for the free virtual prom at the event’s site. Users will be able to socialize, participate in dance contests, create user-generated play lists, take pictures, and sign a yearbook.

Leading up to Prom Crashers, users can secure prom dates or groups, discuss plans in Gaia Online’s forums, and purchasing prom fashions, including exclusive limited edition Christian Siriano avatar prom pieces. Siriano’s designs are available for purchase with Gaia Gold, Gaia Online’s virtual currency, or Gaia Cash, standard U.S. currency.

“At Gaia Online it’s important to us to listen to our users and provide them with a place to hang out that is a natural extension and enhancement of their real-world experiences,” said Scott Kinzie, vice president of creative and user experience, Gaia Online. “With Prom Crashers, we wanted to take a completely new spin on an old tradition, and who better to help us than an edgy young fashion designer like Christian Siriano who embodies the independent and innovative spirit of our Gaians.”

Gaia Interactive has announced that its online community Gaia Online has been expanded with the launch of a closed beta for a casual MMO, and has announced that the upcoming title's official name is to be zOMG!.

10,000 community members will be able to participate in the beta program, selected from 120,000 applications received since April.

zOMG! has been in development since 2006, and is a flash-based environment that is to be released for free and require no downloads. Players are to interact in zOMG! by engaging in quests, battling monsters, exploring the world and socializing with friends. zOMG! also serves as an extension of the Gaia Online virtual world, extending current Gaia Online offerings such as mini games, customizable avatars and forums.

“Our Gaian community is loyal, vocal and not afraid to ask for what they want,” said David Georgeson, senior developer of zOMG! at Gaia Online. “It only makes sense for online worlds to place a huge emphasis on community involvement. In our case, they aren’t just the people who will play the game; they’re the ones who asked for it.”

Gaia Online is unique among virtual worlds, beginning as a forum before evolving into a virtual world which boasts over 7 million users every month. Gamasutra's Christian Nutt talks to CEO Craig Sherman about the site's evolution, the challenges of balancing the business model against creativity and community needs, and upcoming MMORPG zOMG!.

We recently did profile Gaia and what I found interesting is the site started as more traditional community site, and then grew into an online world.

Craig Sherman: Yeah, it was started by a group of comic book artists and one sort of genius developer literally out of their apartment. They built something for themselves, and for their friends, that just ended up resonating with, at this point, five million plus users every month. But it was extremely authentic, and they're just trying to build something that fit around their own internal passions. So I think it did start out with a very strong anime, and gamer, and community focus. And over time it's broadened, so now you can describe it more like an online hangout for teens and people in their twenties. Or you can say it's an activity hub, and activity portal on the net, but with a meta experience around it that feels more like a place, rather than a tool or a website.

We last mentioned Gaia Online's new MMO, zOMG! when it entered closed beta, and the development team has announced that they are to begin rolling out access to Gaia community members.

8,500 "Golden Ticket" holders are to be the first entrants – players who took part in booth promotions at NY Comic Con and Anime Expo, or purchased zOMG! "Rumble Boxes" in Gaia Online's virtual goods marketplace.

After Golden Ticket holders, community members with the longest active accounts (4+ years on Gaia Online) will be given access. The complete roll-out schedule will be announced shortly, and general public access will be established "once the Gaia community is safely in-game."

“We received over 120,000 applications for the Closed Beta from our virtual world community, but obviously couldn’t let them all in,” said Craig Sherman, CEO of Gaia Online. “Members complete hundreds of thousands of micro-transactions per day in the marketplace, and we think the Golden Tickets are a great way to choose which loyal users win this very cool opportunity.”

You might remember last week we mentioned that Gaia Online was rolling out the open beta for its new MMORPG zOMG!, starting with their "Golden Ticket" holders and longest active members. Well, they've now launched their open beta in earnest, with all members of Gaia Online able to access the world.

Within the open beta period, Gaia Online hopes that players to provide feedback on the game through the site’s message boards and forums.

And I don't think we've discussed this before exactly, but zOMG!'s story is quite wacky – " In the world of zOMG!, inanimate objects such as lawn gnomes, rubber boots and alarm clocks are coming to life, threatening to overwhelm all of Gaia, and it's up to players to stop them!"

To do so, players battle through sixteen zones and collect and trade battle rings, and the developers promise that "as the zOMG! world continues to grow, so will the plotlines, each new story arc building on the others to evolve the world of Gaia far beyond where it stands now."

“Our top priority is providing a high-quality MMO gaming experience that’s fun and challenging, and also user-friendly for all levels of players,” said David Georgeson, Senior Producer of zOMG! at Gaia Online. “We received a lot of great feedback from gamers during our Closed Beta, so we’re throwing open the doors as we update the game with new features and additional content.”

We're a bit late on this news, but it's still more than worth mentioning—Gaia Online has announced that over half a million players have signed up for their browser-based MMORPG zOMG! Since the game entered open beta.

That's still a small amount of players considering the size of their full community—a remarkable seven million users are active at least on a monthly basis—but does show incredible growth for a beta stage.

In zOMG!, users battle "inanimate objects such as lawn gnomes, rubber boots and alarm clocks" through sixteen zones to collect battle rings which can be traded with other players.

“Positive feedback from satisfied players not only aids our team in modifying and ultimately perfecting the zOMG! gameplay experience; it is truly rewarding,” said David Georgeson, Senior Producer of zOMG! at Gaia Online. “After a lengthy development process, it’s almost surreal to watch players dig right into the storyline and begin realizing the game’s full potential.”

One of our commentators noted our news post covering Gaia Online trumpeting its record users was terrifically ill-timed, because despite that kind of news, the company announced that this week it is laying off 36 employees (or accordingly, 13% of its workforce)—sixteen of which were full time and twenty of which were contractors.

According to a blog post from the company, the layoffs are the result of "the huge downturn in the economy" requiring "staff reductions and other operating cost cuts as [they] head into an uncertain 2009."

"While we are still anticipating a healthy upcoming year, we're going to grow less than we originally expected," the post continues, "and we have to adjust costs to reflect the new realities."

The post concludes that the company has "raised a lot of money from investors a few years back"—indeed, as recently as this July—and as a result does "not need to make as deep a headcount reduction as most other internet companies."