A critical eye's been fixed on virtual worlds and gaming in general lately, with academics, pundits and parents wondering whether such play is constructive-- or destructive-- to children. Examining the issue is London-based Brunel University's School of Sport and Education, where Dr. Simon Bradford and Nic Crowe followed a group of kids ages 13 to 16 for three years, as they played RuneScape, a fantasy MMO from Jagex.

According to the press release, the research found that rather than creating a legion of pale, anemic shut-ins, online worlds "enhance, rather than constrict the imagination of young people," by letting them experiment with different identities and abilities, and try their hands at opportunities and situations they might not have access to in their offline lives.

"We met many players taking part in online role playing, sometimes to extend or to compensate for experiences in the real world," said Dr. Bradford. "For example, young people whose parents could not afford a summer holiday enjoyed virtual holidays online– hanging out with friends, visiting beaches and going to clubs at night to meet new people.”

Further, according to the study, kids seem to be able to reap benefits from interacting in virtual worlds that reach beyond leisure, such as managing virtual currency and property. Bradford noted "how entrepreneurial young players engaged in business deals online, experiencing positive opportunities often not open to them in the material world.”

It isn't immediately clear what specific markers were used to evaluate the study participants, or how many there were. Still, Brunel says it plans to continue its research into gaming, hoping to study behavioral differences in gender next.

"Although Second Life has received the most attention from marketers and the press, its traffic is low compared with the crowds at virtual worlds specifically geared for children and teenagers," notes the report, titled “Kids and Teens Online: Virtual Worlds Open New Universe.”

eMarketer pegs the appeal for young folk down to the marriage of video game elements with social networking and communication -- connecting and communicating are "the two recurring themes" for online youth, it says. It adds that virtual worlds also allow kids to tap into their creativity, indulge their desire for self-expression and exercise their proclivity for exploration, compounding their appeal.

“The bad news [for marketers],” says Debra Aho Williamson, senior analyst and author of the report, “is that it is difficult to know what all this virtual interaction really means. What value is there in a person’s avatar drinking a Pepsi? Or wearing a shirt bought from a virtual store? What if a person’s virtual activities have no bearing on their real-world activities?”

Technology-focused research organization Yankee Group has released a report titled "Wither Second Life?" Examining the impact of the slowing rate of growth for Linden Labs' virtual world, which has waned since its peak in October 2006. The report also found that user engagement with Second Life has "leveled off" at 12 minutes per month, contrasting those figures with the steady increases seen by sites like MySpace and Facebook. As to the latter, Yankee Group pegs the average time spent per user at 186 minutes per month, a 24 percent increase over the last six months.

"The hype surrounding Second Life doesn’t match its actual marketplace impact," says the report, attributing the stagnation to Second Life's "PC-centric approach in an increasingly mobile world."

“All is not lost with virtual worlds,” said Christopher Collins, senior analyst in Yankee Group’s Consumer Research group. “However, for virtual worlds and metaverses to achieve greater potential in the marketplace and grow beyond early adopters, the experience must be untethered to meet the needs of the 'Anywhere Consumer.' Companies that provide remote access—through mobile devices or other means—to their web experience will have a greater impact than PC-centric companies.”

Virtual Worlds Management has just released a list of accountable transactions it culled from the boom of venture capital, tech and media firm investment news around virtual worlds in the past twelve months. Notably, the report assumes a total of $1 billion in investments spread across 33 companies, and of those, Disney's acquisition of Club Penguin accounted for $700 million, if you recall.

Oddly, however, the report includes Intel's recent $110 million acquisition of Havok, styling the company as a "3D virtual worlds graphics technology" company. It's a bit of a stretch to call Havok a virtual worlds company, since the Ireland-based company's modular run-time tech and artists' middleware has been used for console and PC video game physics and behavior for almost a decade, most recently on big sellers BioShock, Stranglehold and Crackdown, to name only a few.

Even more misleading is the inclusion of independent gaming pioneer GarageGames, who is best known for its proprietary Torque game engine. Same with Emergent Technologies ($12 million from Jerusalem Venture Partners), whose cross-platform C++ game engine, Gamebryo, launched in 2003 and has since been used in PC games like Civilization IV and, notably, critically-acclaimed single-player hit The Elder Scrolls IV: Oblivion.

Others included in the report fall into somewhat of a gray area -- for example, PlaySpan, who received $6.5 million in Series A funding from Easton Capital, Menlo Ventures and Asian investors, could apply its technology equally to gaming networks as to multipurpose virtual worlds. The taxonomy of virtual worlds is a bit tricky to define and will continue to be under discussion for some time, to be sure; similarly, it can be anticipated that many video game companies may broaden their involvement into the virtual worlds space (such as Entropia Universe's graphics upgrade to Crytek's CryEngine).

But it's less useful, and more misleading, to use such arbitrary delineation when trying to quantify an industry by investment numbers -- certainly virtual worlds are enormously attractive to investors, with large dollar amounts involved, but it would seem $1 billion is somewhat an inflated number.

The Gartner analyst group has released some research on what it calls "Generation V" (Generation Virtual), and says that in 10 years, the largest influence on all purchases will be the virtual experience associated with them. Gartner states that by 2015, more money will be spent on sales and marketing online than off, with this Generation V driving the trend.

Said Gartner analysts, "Generation V is the recognition that general behavior, attitudes and interests start to blend together in an online environment. The idea of Generation X (and later Generation Y) was conceived as a way to understand new generations that appeared not to have connections to the culture icons of the baby boomers. Marketers use the categories of baby boomers, Generation X and Generation Y to segment the population for targeting products and services with a focus on age."

However, Gartner notes that this generational divide breaks down as more tech-savvy baby boomers are going online at the same time and in some of the same spaces as their younger counterparts. "Customers will hop across segments at various times of life for various reasons and are likely to act like several generations at any given time," the analysts add.

Gartner principal analyst Adam Sarner explained, "For Generation V, the virtual environment provides many aspects of a level playing field, where age, gender, class and income of individuals are less important and less rewarded than competence, motivation and effort. For example, an 11-year old individual can be the leading "go to" person for advice on how to upgrade/hack a digital video recorder (DVR) for more recording space. An unpopular office worker can be a highly revered, accomplished 40th-level half-elf in World of Warcraft. The opportunity for reputation, prestige, influence and personal growth provides a powerful social draw for the masses to spend more time in a virtual world."

With the amount of time spent by all age groups online, Gartner recommends, "Companies will need to shift from collecting personal data about individual customers toward collecting more-complete and more-relevant data around online customer behavior and influence on others," Mr. Sarner said. "Companies will need new processes, new skills and a restructuring of how data is collected and used as they shift from demographic to psychographic insight. If companies follow a truly persona-centric approach, they can use the highly relevant information the persona leaves. Although the real person may never be known, far more intimate information of the persona's actions, personality, lifestyle habits and attitudes can be collected and exploited for business goals."

With that in mind, Garner concludes with some recommendations for marketers targeting Generation V:

Companies should organize their products and services around multiple online personas.
Sell to the persona, not the person. A persona will show you how it wants to be treated.
Create virtual environments as a way to orchestrate customer exploration toward purchases.
Shift Investment from known customers to unknown ones. Focus on the influencers within the meritocracy.
Develop and retain or outsource new skills to attract, connect, contribute and gain insight from Generation V and its virtual environment

CBC News has an article about some research currently going on at Japan's Tokyo University experimenting with enabling avatar control in Second Life using one's own body and brain waves. Apparently, the research subjects work on a colored mat in front of a web camera so that the subject's position can be calculated in three dimensions, and the result fed back into the virtual world to create corresponding movement with the avatar.

Keyboard controls in general are usually a barrier to entry -- learning the controls made our acclimation to Entropia Universe challenging, for example -- so seeking a more naturalistic, motion-based control scheme is definitely a right-track kind of idea. But would people really want to strap a webcam to their hip and walk around on a mat when they want to visit their favorite virtual world? Adding extra steps and peripherals seems counter-productive to reducing barriers to entry.

But at another Japanese university, Keio University (also in Tokyo), another research team is reportedly taking a different tack. With electrodes strapped to the head, subjects can move their avatar simply by thinking of commands like "left" or "forward." But according to the article, there are some difficulties with this method:

"The difficult part is to stop thinking," said research student Takashi Ono as he made his avatar stroll through a virtual Tokyo neighborhood in Second Life.

"I want to go left, so I think, 'left' — but then the avatar turns too far to the left before I can get rid of the command in my head," he said.

The research team isn't planning to commercialize their technology, although they're seeking to patent it, and the use they've got in mind -- video games -- seems as if it might have a bit more potential than to navigate virtual worlds, where we're stressing ease of use and simple, universal methods of access.

[Via CBC.ca]

Market research Strategy Analytics has launched new research into various factors required to capitalize on virtual world trends, looking into consumer behavior, benefits to business and other issues.

The firm says "virtualphiles" and evolving gamers have historically been the main interest group for the market, but believes that the marketplace is now mainstreaming toward commercialization. The firm plans to analyze corporations attempting to attract and engage users and address their needs, in order to determine best practices and critical benchmarks.

While virtual worlds, such as Second Life have attracted millions of early adopters, virtualphiles and evolving gamers for several years, only recently has the marketplace appeared to have turned the corner toward serious commercialization. Through programs of qualitative and quantitative research, Strategy Analytics is examining the challenges facing corporate attempts to attract and motivate consumers, develop internal applications and address the needs of potential business-to-business customers in virtual worlds.

Strategy Analytics president Harvey Cohen commented, "Virtual worlds represent an evolutionary step in the convergence of digital content, the internet, and consumer behavior through digital devices. Strategy Analytics is exploring the factors necessary to succeed in this environment. Companies like IBM, Cisco, Dell, Vodafone, GE, and Intel are pioneers in this commercialization. Strategy Analytics analysts are focusing on the metrics for success and the drivers for consumer adoption."

In its first-ever quarterly online game subscription tracking report - covering October 2007 to March 2008 - the NPD Group has gathered data claiming that online subscriptions, including MMO, casual, and console titles, represent over $1 billion annually to the U.S. gaming industry.

The NPD Group calculated these results by taking the monthly averages it had estimated from a newly compiled gamer panel for Q4 2007 and Q1 2008, respectively $94.3 million and $80.1 million, and multiplying the average of those two by 12 to get the annualized equivalent.

Said NPD spokeswoman Anita Frazier: "Now that NPD can estimate the value of the subscription market, it's clear that there is a sizable chunk of revenue being generated by PC gaming beyond what is reflected in retail sales."

The online subscriptions tracking report went on to show claims that 11 million North American gamers hold monthly subscriptions to online games. According to the report, revenues from console subscriptions rose 9% on an average monthly basis since Q4 2007 to Q1 2008.

The NPD Group also listed its own estimates of the top 5 rankings for MMOs and gaming subscription (largely casual) websites during the Q4 2007 to Q1 2008 period.

MMO/PC Game Subscribers:

1. World of Warcraft
2. RuneScape
3. Lord of the Rings Online
4. Final Fantasy XI
5. City of Heroes

Gaming Website Subscribers:

1. Pogo.com
2. Realarcade.com
3. Bigfishgames.com
4. Gametap.com
5. Disney.com

Said Frazier: "By contrasting the demographics of MMO players against those of gaming website players, the broad appeal of PC gaming is clearly evident. While the majority of gaming website players are females over the age of 35, MMOG players are largely males under the age of 35. The variety of content available to play games on the PC clearly can draw a diverse audience."

[The preceding article originally ran at Worlds in Motion sister site Gamasutra.]

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.

Virtual worlds are a "powerful and engaging" interactive alternative to more passive activities, such as watching television, potentially enabling children to rehearse useful real-life activities in a virtual space, according to a BBC-sponsored study conducted by the University of Westminster on BBC virtual world Adventure Rock.

The group's research analyzed how children explored and used Adventure Rock, gathering feedback on perceived good and bad aspects. Researcher Professor Gauntlett found that the children often assumed one of eight roles in the world, acting as explorers, social climbers, and power users seeking information on the virtual world's mechanics.

The study noted that children who took part in the study enjoyed the ability to create their own content, such as music, cartoons, and videos. They also enjoyed tools that allowed them to compare their standing in the virtual world with others.

Gauntlett concluded that online worlds are useful rehearsal spaces in which children can use their imaginations and try out actions without having to worry about the consequences often present in the real world. He urged the BBC and developers behind other virtual worlds to involve children early on.

Said Will Davies, a teacher at Peterston Super Ely primary, one of the study's participants,
"The kids know what they are doing and are very good at telling you in a brutally honest and forthright manner about what they want to see." Irene Sutherland, a teacher at Merrylee primary, another school which took part, added, "Children were adamant about the bits they did not play but were full of ideas about how to improve them."

The Nelson Marlborough Institute of Technology will receive a $500,000 grant from the New Zealand government's Encouraging and Supporting Innovation fund for a new project exploring the potential of virtual worlds as an educational platform, according to a report from daily newspaper The Nelson Mail.

NMIT will be conducting its research through Second Life, where the polytechnic has maintained a presence for 18 months. The organization purchased an island in the virtual world last year, christening it Koru and renting out the land to five other polytechnics and Massey University.

Though NMIT will be leading the project, Otago Polytechnic, the Wellington Institute of Technology, and the Open Polytechnic will make contributions as partners. IBM will also provide support and advice as the groups study the educational possibilities for audio and visual interactive presentations.

Speaking on whether virtual worlds can offer value to education, NMIT information technology tutor Dr Clare Atkins predicted, "We believe that they do, even though it's early days and no one knows how to use it best. It's a brave new world ... The big part really is identifying the teaching methods that are likely to be most suitable to Second Life."

One to One Interactive research arm OTOinsights has released a report entitled
"Serious Games for Marketing: Learnings from Corporate and Amateur Efforts in Second Life," a free-to-download study comparing Second Life's ten most popular user-created sites with the ten most popular corporate branded locations.

In its study, the firm noted that overall, the top user-generated sites are more popular than the top corporate sites in Second Life. "Perhaps the explanation for this disparity is that corporate sites offer different content or experiences than user-generated sites, and builders of user-generated sites are more effective at offering the content users want. Or perhaps the corporate sites offer similar content, and the reason is that Second Life users are simply resisting corporate influence as a part of their hipster ethos. "

In the report, OTOinsights provides five insights for building future branding- and marketing-oriented sites based on its analysis:

1. Invest less in production quality and more in social interaction design.
2. Avoid virtual suburban sprawl and encourage people to gather.
3. Offer robust, high-quality shopping at multiple price points.
4. Promote builds by advertising events across in-world and out-of-world media channels.
5. Offer regular, hosted social events to drive and maintain traffic.

Said One to One Interactive president and co-founder Jeremi Karnell: "OTOinsight's t=zero initiative is an industry-academic collaborative research project between One to One Interactive and Indiana University's School of Informatics. Our objective is to determine useful measures of user engagement and experience with digital and social media. Our first publication, focused on Serious Games for Marketing, is meant to take a step back and objectively evaluate what worked and did not work in the rush to establish early footholds in Virtual World spaces. Our hope is that these findings will help guide future efforts as we see new entrants and innovations in that space."

U.S. MMORPG publishers may need to offer more free-to-play titles - not games with subscriptions models - to attract new players and grow the market, according to Electronic Gaming in the Digital Home II, a recent consumer study conducted by market research firm Parks Associates.

Of the 2,000+ online gamers polled, only hardcore gamers were found to be interested in subscribing to an MMORPG service, whereas "social, dormant, and leisure gamers all show significant interest in a free-to-play, microtransaction-based model."

The study's numbers show that 14% of gamers currently not playing MMORPGs would be interested in playing them if they could for free, while only 2% of gamers from the same group were interested in playing an MMORPG requiring subscriptions.

According to Parks Associate's director of broadband and gaming, Yuanzhe (Michael) Cai, the barriers to entry with subscription-based MMORPGs, such as time and money, are too high for potential customers. Free-to-play models, however, offer flexibility and enable players to choose how much they want to invest based on interest level and play patterns. Thus, the firm believes that microtransaction models have the best potential to grow the U.S. MMORPG audience.

Said Cai, "World of Warcraft, with over 10 million players, exceeded expectations for subscription-based MMORPGs, but it's unlikely any other publishers will achieve the same in the near term using a subscription model."

Funded by a MacArthur Foundation grant and seeking to analyze the merits of virtual worlds for research applications and controlled experiments, researchers with the Synthetic Worlds Initiative (SWI) at Indiana University Bloomington conducted a study which found that gamers in fantasy-based online worlds conformed to the Law of Demand, which states that increasing the price of a good, all else equal, will reduce the quantity demanded.

For the experiment, two identical virtual worlds (Arden) were created with players randomly assigned to one or the other. The only difference in the two environments was the price of a single good, a health potion, which was priced twice as high in the experimental world than in the control.

Players in the experimental condition purchased 43.1% fewer of the potions, well within the range one expects for normal economic agents. According to SWI, this can be taken as evidence that the Law of Demand holds in fantasy environments, suggesting in turn that fantasy gamers could potentially be economically normal despite skepticism due to abnormal fantasy-themed environment.

According to the paper in which these results were published, A Test of the Law of Demand in a Virtual World: Exploring the Petri Dish Approach to Social Science, this testing in general behavior theory could lead towards further explorations on virtual worlds' viability as social science Petri dihes: "It may be worthwhile to conduct controlled economic and social experiments in virtual worlds at greater scales of both population (thousands of users) and time (many months)."

A recent Manchester University study on gold farming pegs it as a $500 million global market, where some 400,000 workers -- 80 percent of which are based in China -- earn an average of $145 per month.

Speaking with the BBC News, Manchester University's Richard Heeks compared the gold farming industry's size to India's outsourcing industry.

"The Indian software employment figure probably crossed the 400,000 mark in 2004 and is now closer to 900,000," he said. "Nonetheless, the two are still comparable in employment size, yet not at all in terms of profile."

The study, titled "Current Analysis and Future Research Agenda on 'Gold Farming': Real-World Production in Developing Countries for the Virtual Economies of Online Games," describes its "$500 million per year" prediction as a "best guess," taking into account subscription and employment data.

According to Heeks, the somewhat criminal nature of gold farming made it difficult to predict a definite number for the industry. "It seems unlikely to be less than $200 million per year, and it could well be more than $1 billion per year," he said.

Internet traffic analyst Hitwise posted its findings from a case study documenting Stardoll's recent promotion with department store chain Kohl's.

Kohl's launched a line of virtual apparel in Stardoll, a teen and 'tween social networking site and doll dress-up community, which users were able to purchase for their online characters. The virtual line featured pieces from a clothing collection designed by singer Avril Lavigne.

The study found that users who visited shopping or classifieds sites after visiting Stardoll most likely visited Kohls.com, presumably due to the promotion.

During the peak week of the promotion (week ending August 16), Stardoll accounted for .26% of visits to Kohls.com, just behind Ask.com.

Hitwise advised that retailers seeking to implement similar promotions need to research any potential partnerships first before expecting similar gains, as the Kohl's Stardoll benefited from their users sharing a common interest in fashion.

Said Hitwise: "Firms looking to establish such partnerships can analyze clickstream data to understand relationships and to find appropriate promotions, thereby reducing the risk of a flop."

Of the 1,541 girls surveyed, over half of the girls surveyed claimed that they are devoting more time to playing video games and using consumer electronics now than they did in the previous year.

The report shows that though girls age 9 to 12 still prefer to play with traditional toys over games or electronics, the number of 'tweens migrating to computer and video games is increasing.

According to the study, girls age 6 to 8 are also spending more time in 2008 with virtual worlds, attracted in particular to their social elements, as well as board games and arts and crafts.

"Girls, in general, are famously social creatures," says NPD Group analyst Anita Frazier. "The growth in use of social networking and virtual world websites by girls is a natural extension of this core value which needs to be recognized by manufacturers who count girls as primary market for their goods and services."

[The preceding article by Eric Caoili originally appeared on Worlds in Motion sister site Gamasutra.]

A couple of interesting reports worth mentioning:

First up, Virtual Worlds Management has announced the numbers of their study of investments in virtual world companies by venture capitalists and media fims, revealing that over $148.5 million dollars were invested in 12 virtual world companies in the third quarter of 2008 alone -- including, for example, $11 million in Gaia Online and $5 million for the Hollywood Interactive Group (working on MyHollywood.com).

The report also stated that the total investment so far for 2008 is $493 million(!).

Similarly interesting is a new report from Dubit Research (via Virtual Worlds Forum) which shows that 73% of British 7-12 year olds use a virtual world -- with 43% in Club Penguin, 27% in Habbo, and only 8% using a virtual world that isn't one of the top ten 10 -- but it's worth noting that the top ten includes the BBC's Adventure Rock, MapleStory and RuneScape.

The entire report (in PDF) is very worth reading if you want to know about the virtual world habits of British Teens -- but particularly worth noting is that the gender split is almost meaningless, virtual world use increases until age 10 and seems to decrease after that, and the details on advertising in virtual worlds – while 45% of children didn't notice/remember advertising, most ranked brand presence in the world very positively.

Game Developer Research has revealed select results of its newly released 2009 Game Development Outsourcing report, helping to illuminate the practice of worldwide outsourcing in video game production.

To construct a comprehensive look at the segment, almost 200 professional game developers were polled anonymously about their studios' use of outsourcing, their outsourcing budgets and plans, regional factors, and much more.

Furthermore, the results of the survey build on a previous survey conducted privately in 2007, allowing Game Developer Research to discern emerging trends in game outsourcing -- which, despite its already-wide usage, is still undergoing considerable growth.

Significantly, between 2007 and 2008, the proportion of respondents whose studios use outsourced game development rose 10 percent to 86 percent -- from an already considerable majority of 76 percent.

That trend is certain to become more pronounced. Among participating developers, fully half of those who still do not use outsourcing plan to begin outsourcing going forward, and an overwhelming 95 percent of those who already engage in the practice expect to continue doing so.

Results suggest that one major contributor to the explosive growth of outsourcing is the increasing cost and bandwidth required to create a high volume of assets for modern console systems. Respondents reported that Xbox 360 and PlayStation 3 are the two platforms for which elements of game creation are most frequently outsourced.

Outsourcing is clearly on the rise in terms of overall budgetary allocation as well. The high end of outsourcing budgets increased nearly twofold, with the proportion of companies planning to spend $2 million or more on outsourcing rising to almost 20% in 2008.

The new Game Developer Research report also discusses overall budgets, reasons for outsourcing, the selection process for choosing firms to outsource to, and the regions of the world that our respondents worked with.

It also includes a named list of established outsourcing studios from all regions of the world, specifically and solely using firms cited in the survey results -- with particular attention paid to those mentioned multiple times.

For more information on the report, which should be of use to companies wanting to further understand the outsourcing market, please visit the official Game Developer Research website.

New data from analyst group Pearl Research shows that China's online games market grew 63 percent in 2008 to a total $2.8 billion.

In its new Games Market in China report, Pearl Research forecasts that the Chinese online market will be worth more than $5.5 billion by 2012.

Online operators in China have apparently seen little downturn in their business during the world economic crisis, with six companies now making revenues greater than $200 million (Tencent, Changyou, The9, Netease, Shanda and Giant).

The most popular online game in China during 2008 was Netease’s Fantasy Westward Journey, with 1.8 million peak concurrent users. This was followed by Giant’s Zhengtu Online on 1.5 million, Tencent’s Dungeon and Fighter on 1.2 million and Blizzard’s World of WarCraft on 1.0 million.

Out of a total of 298 million Internet users in China, 70 percent are under the age of 30. The reticence of this demographic to cut down on low-cost entertainment such as online gaming is seen as one of the main reasons for the market’s continued growth.

"Trends to track in 2009 include the growth of social networking sites in China, with over 55 million users, and their cross-pollination with games," said Pearl Research managing director Allison Luong.

"One overall concern is the lack of diversification with many game operators relying on a single title for the bulk of revenues. In addition, a glut of content with more than 200 games on the market makes releasing a breakout hit increasingly difficult."

[The preceding article by David Jenkins also appeared on Worlds in Motion sister site Gamasutra.]