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Kids See Potential Beyond Gaming for Virtual Reality (Part 2)

This is the second half of our summary review of the Oculus Rift kids/tween user testing research. In part one we covered research areas including headset comfort, game perspective preference, favourite game genres and game ideation.

As a recap, the research objectives were as follows:

  • Gaming Usage – how they reacted to wearing the Oculus Rift headsets, how they acclimatised to being in a virtual reality environment and their reactions to the games they played.
  • Game Design and Ideation – how well they could come up with new ideas and genres for games suitable for VR.
  • Branding – which companies they thought should sell virtual reality headsets.
  • Pricing – how much they should the headsets should cost.

Here’s what else we explored…

Pricing

We asked the kids how much they thought a headset like the Oculus Rift would cost. The average answer was £430 GBP / $720 USD.

Additionally, when we placed the Oculus Rift alongside a variety of other devices included a PS4, XBox One, a smart TV and an iPad, they ranked the headset as the most expensive. A boy aged 10 said ‘it’s the best out of all the others and it’s better than any other game‘.

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Distribution and Branding

We gave all groups a large selection of company logos, ranging from game and software developers through to global technology manufacturers, toy companies and social networks. None of them were aware of the Facebook acquisition of Oculus VR. Continue reading →

Kids See Potential Beyond Gaming for Virtual Reality (Part 1)

In March we conducted what we believe to be the first ever qualitative user testing research with kids and tweens using the Oculus Rift. The research (in conjunction with Dubit) was a series of six one-hour play sessions with pairs of boys and girls aged seven to 12.

Research Objectives

We wanted to investigate the following:

  • Gaming Usage – how they reacted to wearing the Oculus Rift headsets, how they acclimatised to being in a virtual reality environment and their reactions to the games they played.
  • Game Design and Ideation – how well they could come up with new ideas and genres for games suitable for VR.
  • Branding – which companies they thought should sell virtual reality headsets.
  • Pricing – how much they should the headsets should cost.

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We’ve got a Slideshare presentation here or a free summary report of our findings can be ordered here. The first set of our high-level findings are as follows: Continue reading →

Fairy Forest, an Oculus Rift Virtual Reality Demo for Kids

The market for Oculus Rift games and experiences is ramping up at pace, with a wide variety of genres and applications being published. This first tranche of demos and games range from rollercoaster rides and scuba diving, through to first person space shooters and horror games.

These games are being developed by enthusiasts and indie developers right through to more established game studios such as Frontier Developments (creating Elite: Dangerous) and CCP (creating Eve Valkyrie).

From a user perspective, due to the fact that the Oculus Rift headset is still in ‘developer mode’ and Sony’s Morpheus device is scheduled for launch early 2015, the ‘players’ of these early games are adults. However, as our Consumer Virtual reality market sizing assessment illustrates, it will not be long before kids and tweens become a driving force in the market as headsets become consumer-ready.

[As a side note, from a strategic perspective Facebook would do well to consider the Oculus Rift as a key tool to appeal to the younger users they are struggling to attract. Tweens and early teens have flocked in their millions to browser-based virtual worlds. Now, with the advent of virtual reality, social virtual worlds and immersive experiences will become extremely engaging. This is also one of our key strengths – creating virtual worlds and experiences for the KT&T (kids, tweens and teens) marketplace.]

To that end, welcome to Fairy Forest.

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Fairy Forest is a virtual reality experience designed for kids and tweens. Developed in collaboration with Dubit, this is a prototype created to demonstrate the immersive qualities of VR.

3D environments, coupled with strong narrative and engaging game mechanics will combine to present massive growth opportunities for the KT&T market and we’re positioning ourselves to be at the forefront of this virtual revolution building on our expertise from browser and tablet screen-based virtual worlds.

Fairy Forest is available to download from the WeArVR virtual reality gaming portal.


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Looking to develop an Oculus Rift application? Contact us here.

Virtual World and MMO Universe chart: Tween/Teen segment for Q3 2013

Yesterday we published the Q3 2013 update of the Universe chart, starting with the Kids sector. This chart shows virtual worlds and MMOs with an average user age of 10 and under. The kids chart is here. Today we’re shifting focus towards the Tween and Teen segment, containing VWs/MMOs with average user ages between 10 and 15. Here’s the chart…

kzero universe chart q3 2012 seg2Whereas the kids segment is dominated by a very large world at the upper age range (Club Penguin), a handful of long-established worlds (Neopets and Webkinz) and a smaller (but growing) group of worlds, the Tween/Teen sector is more distributed.

At the younger range of this segment, Poptropica is clearly the leader, with 292m cumulative registered accounts. But, this end of the age range also has power-players such as Moshi Monsters (85m accounts), Bin Weevils (huge in the UK and growing overseas), and Moviestar Planet. Moviestar Planet has quite dramatically grown its userbase in the last 24 months, assisted to a high degree through TV advertising, coupled with localisation into several languages.

Moving older into the age 12 – 14 year old range, Wizard 101, Roblox and Minecraft are slugging it out in the 30-35m account bracket, albeit with different game mechanics.

Finally, shifting up to the 14 – 15 year old segment, girls become more engaged than boys, which reflects the dominance of fashion/dress-up properties such as Stardoll and GoSupermodel, the former just about to hit 250m global registered accounts – and it’s global for a reason as Stardoll has branched out aggressively into new territories.

The full KZero Universe chart is now on Slideshare here.

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Virtual World and MMO Universe chart Kids segment for Q3 2013

Hot off the press, we’ve just updated the KZero Universe chart for Q3 2013. The Kids segment covering virtual worlds and MMOs with an average user age of 10 and under is shown below (and the Tween/Teen chart is here).

kzero universe chart q3 2012 seg1Club Penguin dominates the Kids market for virtual worlds and MMOs and added 20m registered accounts from Q1 2013, taking their cumulative total to 220m.

Other userbases in this segment such as Webkinz, Bearville and Neopets, whilst having large 20m+ cumulative accounts, showed slower growth through 2013.

Inversely, the trio of Knowledge Adventure worlds, namely Jumpstart, Math Blaster and recently released School of Dragons all grew strongly year to date, with a combined total of 26m cumulative registered accounts. These guys are leveraging their expertise gleaned from growing Jumpstart, across into their newer portfolio.

Looking at the newer companies in the kids sector, key themes present include mobile/tablet versions (from launch), cross-platform functionality and real-world brand/IP based plays.

Next up we’ll be publishing the tween/teen segment of virtual worlds and MMOs targeting 10 to 15 year olds. The full presentation is over on Slideshare.

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Latest Trailer for ‘Legends of Oz: Dorothy’s Return’ Movie (with added KZero goodness)

Here’s the latest trailer for the upcoming Legends of Oz: Dorothy’s Return movie. Created by Summertime Entertainment, KZero was tasked with creating the virtual world strategy to support the film. Development of the virtual world is nearing completion, coinciding with the pre-launch promotional activity for the film. Watch this space!

 

 

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TV Advertising Ups the Stakes in the UK Virtual Worlds Sector

With above average ARPPUs and paying user conversion rates, the UK market has long been a high-value territory for virtual world companies targeting kids and tweens.

And, whilst the likes of Moshi Monsters, Stardoll and Club Penguin lead the way in terms of user penetration, a group of newer virtual worlds are activating UK TV advertising in order to grow their userbases and take a piece of the market.

At present, Minomonos, Space Heroes Universe, Fight My Monster, Herotopia and Bin Weevils are all buying UK air-time across the major kids channels. Here’s a selection of TV ads shown in the UK.

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Slideshare presentation: Q4 2012 Universe chart

And following on from our last post, here’s the Slideshare presentation for the Q4 2012 Universe chart. The hi-res version can be ordered here.

 

 

Universe Chart for Q4 2012 Now Ready to Order

Back by popular demand, we’ve been busy bees over Xmas getting the KZero Universe chart ready. Shown below is an extract from the Universe chart showing virtual worlds and MMOs with an average user age between five and 10.

As per usual, high res versions of the Universe chart presentation can be ordered here, Also included within this report is our forecast for Active Users as at Q4 2012 as well as Market Penetration rates and the Usage Multiplier.

Here’s the chart for the five to 10 year old segment.

Poptropica remains the dominant player in this segment both in terms of their overall user base size as well as forging into new business development efforts such as licensing – a strategy becoming increasingly popular amonst the larger worlds as well as the more aggresive smaller players, such as Fight My Monster.

Founded in the UK, Fight My Monster used (and continues to use) TV advertising very early after launch. The company has also inked several licensing deals which is quite unique considering their relatively small (compared to other UK VWs such as Moshi Monsters and Bin Weevils) user base of circa 2m.

Neo Geo’s Animal Jam continues to expand in line with year one growth, closing Q4 with circa 9m registered users. Another property with ties back to TV is Toonix from Turner. Toonix has pushed through 1m registered accounts in just over a year.

For the full high-res set of Universe charts as well as other data-sets such as Active Users and Market Penetration rates, order here,

The KZero Universe chart is sponsored by Dubit.

Extracts from this report as well as other KZero insight will be presented at the upcoming Digital Kids conference in New York City next month.

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Lessons in Launching Virtual Worlds. Mistake #3: We’re Going With a Monthly Subscription

This is number three in our series explaining common mistakes made by companies launching virtual worlds.

In the first post we discussed the need for market (or rather user acquisition) budget and the target market range was explored in the second post.

Now the focus switches towards the monetization strategy – the pricing method that users will be encouraged to use.

Most virtual worlds targeting the KT&T marketplace opt for a monthly subscription pricing method – charge users a fixed monthly fee and provide them with enhanced/premium features. These premium items take the form of access to special areas, bundles of virtual goods, additional features and the like.

Worryingly, the pricing decision for a lot of virtual worlds and MMOs in the sector isn’t a decision at all. Instead, worlds just opt for a monthly subscription based on the following thinking:

  • If it works for Club Penguin then it will work for us
  • It provides parents with peace of mind – no unexpected charges
  • Having a recurring monthly subscription is less hassle

You get the picture.

And in principle the arguments above are sound. And indeed, virtual worlds such as Moshi Monsters, Jumpstart, Club Penguin and Wizard 101 all have monthly subscriptions. But, these worlds have become ‘brands’ in the space helped a great deal by spending sizable amounts on user acquisition (see mistake number 1).

However, there’s a much bigger picture that many virtual worlds completely miss.

Firstly, switching costs.

What many virtual worlds do not realize is that users who are most likely to be monetized are already being monetized somewhere else, i.e. a competitor virtual world. In this instance, the new virtual world has to shift the user’s attention away from their existing world and move them to their world. It’s important to bear in mind that the propensity for KT&T to have monthly subscriptions in more than one world is virtually zero, due to the issue of switching costs and an unwillingness for parents to be paying for two at the same time.

Another issue is brand awareness and reputation.

When a new virtual world launches, brand awareness and more importantly brand reputation is zero. Nobody knows and nobody cares. Yet worlds think parents will willingly pull out their credit cards and commit to a monthly subscription. If only it was that easy.

A far better pricing strategy is using microtransactions (MTX) at lower price points than a typically monthly subscription (which, surprise surprise is usually $5.95). Allowing users to purchase a virtual currency (which can be used to buy all the elements that a typical monthly subscription offers in smaller chunks) makes the payment decision much easier for parents.

Not only is the paying amount lower (read: cheaper) but also less riskier than a monthly subscription. This neatly side-steps the concern parents have that their child will get bored playing in world X and move onto to another one (whilst still paying for the first).

Implementing lower -priced MTX has an additional benefit of widening the paying user catchment. In other words, for a lot of users, paying $6ish a month is simply not an option. Whereas paying as low as $1 for a ‘taste of the good life’ is much easier to swallow. You just have to look at the app market for evidence of this. By lowering the paying entry threshold you can go after those users that haven’t been monetized by other worlds.

The bottom line is that pushing users over the monetization line is about showing KT&T whats on the other side of the fence. If you have a great VW then users will want to stay as paying users – give them a really low hurdle to jump over, then focus on raising it once they’re over it.

As a closing PS, another point missed by many virtual worlds is that by having a monthly subscription – a take it or leave it fixed price for premium content, you’re actually setting the upper limit of what users can pay. This means that the really engaged paying power users that reside within KT&T worlds can’t get anymore out of their world over and above the monthly subscription level and benefits. This is a poor longer-term strategy.

PPS: KT&T virtual worlds and MMOs with virtual currency based MTX convert three times as many users as subscription-only worlds and have a monthly ARRPU on average 20% higher.

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