Corporate virtual worlds implode at hyper speed

15 May 2008

Creating corporate virtual worlds could prove a cheaper alternative to videoconferencing but nine out of 10 such projects fail within 18 months, according to analyst firm Gartner.

Gartner said the impact of virtual worlds on organisations could be as big as that of the internet itself, but the failure rate so far is so high because companies are focusing on the technology rather than on understanding end-user requirements.

The company blames the high failure rate on businesses starting virtual world projects for the ‘cool’ factor or because competitors are doing it, saying many that it had studied were closed down or abandoned due to a lack of clear objectives and a limited understanding of the demographics, attitudes and expectations of virtual-world communities.

“Businesses have learned some hard lessons. They need to realise that virtual worlds mark the transition from webpages to web places and a successful virtual presence starts with people, not physics,” said Steve Prentice, vice-president and fellow at Gartner.

“Realistic graphics and physical behaviour count for little unless the presence is valued by and engaging to a large audience.

“An effective project starts by focusing on the audience’s needs and ultimately delivering the technology to support the community of people.”

The cost of implementing a corporate virtual platform starts from around US$50,000 and trials can start from around US$5,000, said Gartner. A benefit is that it can save costs by reducing use of expensive videoconferencing facilities.

Organisations have three choices when creating a virtual world: they can enter an existing one (such as Second Life or, create their own public world or create their own internal, private world.

“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.

“The challenge generic projects inside Second Life face is they do not know who their audience is and therefore do not know what their needs are. Organisations cannot effectively market a product for the whole world. They need to be focused and targeted.”

Gartner advocates organisations start using virtual worlds in role-based, scenario-driven training exercises or complex situational simulation, such as for training emergency services personnel, and to start experimenting with virtual worlds on a small, internal scale.

By Niall Byrne