Kids and teens have pushed at least 6 immersive online worlds to over 2m UU/mth in the US

Wagner James Au has a great post on GigaOm about Gaia. Gaia is a casual immersive MMORPG that describes itself as:

“The world’s fastest growing online world hangout for teens.”

In an interview with Gaia’s CEO, Craig Sherman, he quotes that Gaia has gone from 0.5m unique users/month midway through last year to 2.5m UU/mth last month. (nb Comscore only has them at 700k UU/mth in March). Furthermore, he claims 300k users log in each day for an average of 2 hours per session, and in their forums area they are getting an average of 1m posts per day for a total of over 1 billion posts so far. And its mostly (85%) US traffic. Impressive stats. Gaia has been pretty quiet about its growth until recently, but Susan Wu was finally able to get them to break their silence by getting Craig to speak at her panel at Web2.0 Expo last week.

Casual immersive worlds have not previously been as popular in the US as they have been in Europe (Habbo Hotel) or Asia (Cyworld). ( I draw a distinction between casual immersive worlds and games such as Runescape and World of Warcraft). Even press darling Second Life, currently reporting 1.7m log-ins in the last 60 days, is lagging Gaia’s usage.

Interestingly enough, Gaia isn’t the only casual immersive world that is getting meaningful usage in the US. The original casual immersive world, Neopets, is still going strong, with 4.2m UU/mth in March according to Comscore.

Neopets® is the greatest Virtual Pet Site on the Internet. With your help, we have built a community of over 70 million virtual pet owners across the world! Neopets has many things to offer including over 160 games, trading, auctions, greetings, messaging, and much much more. Best of all, it’s completely FREE!

Club Penguin, who Susan also got to speak for the first time on her panel at web2.0 expo, is also growing like crazy - 4.1m UU/mth in March.

Club Penguin is a kid-friendly virtual world where children can play games, have fun and interact with each other.

* Kid-friendly chat
* Lots of fun games
* Nothing to download
* Lots more!

Webkinz, who I mentioned last week as one of the few sites getting their users to visit more than 10 times per month, is also at 4.1m UU/mth.

Webkinz pets are lovable plush pets that each come with a unique Secret Code. With it, you enter Webkinz World where you care for your virtual pet, answer trivia, earn KinzCash, and play the best kids games on the net!

And a dark horse entrant that I was unaware of until recently - Millsberry, run by General Mills (the manufacturer of cereals), is getting 2.2m UU/mth.

Millsberry is a fun virtual city for you to explore. You create a citizen of the city and discover Millsberry through his eyes. You’ll need to make sure he takes care of himself, so you’ll need to get food (from the shopping area) and make sure he exercises (by playing games), but you’ll also get to go on adventures, solve mysteries and have all kinds of fun while visiting Millsberry!

.

Even Lego has announced its plans to release a casual immersive world in 2008

These worlds are all exploring different business models. Some are mainly ad supported (Neopets, and effectively Millsberry), others rely on subscriptions (Club Penguin) that deliver certain privileges, and others rely on transactions, either in the real world (Webkinz) or for digital goods (Habbo Hotel, Gaia.

Its worth noting that all of these are websites with no download required. This has likely helped them grow more quickly than other casual immersive worlds such as Second Life and IMVU, which are also growing fast, but not as fast.

One can’t help but notice that all of these immersive online worlds are targeted at kids and teens. If demographics are destiny, then we can expect more and more people to interact with each other in casual immersive worlds over the next few years. Susan Wu thinks so too, and her prediction about web 3.0 (are we there already?) is that it will be:

continuing down this path of improving the user experience of living and socializing online. This story is about human context, social proximity, and a sense of place.

I think she is right. What are your thoughts?

UPDATE, April 26th, 2007: Barbie is now also getting in on the action with Barbie Girls.

UPDATE, April 29th, 2007: Techcrunch reports that IAC’s Zwinky is also launching a casual immersive world. In this case, they are also employing a different business model than the other virtual worlds as the toolbar that enables much of the functionality includes a search box and will be usable both when the user is and is not “in world”. Note that the search box occurs to the LEFT of the URL box… This tactic worked great for previous IAC products such as Smiley Central and Cursor Mania.

Successful MMOGs can see $1-2 in monthly ARPU

There are not many publicly available statistics on the free-to-play industry in the western world. Here is what I found on the web for some of the popular virtual worlds and MMOGs:

Second Life

Second Life’s economic statistics are reported monthly. In May 2007, Second Life reported:

$165m Linden dollars sold by Linden Lab through the Linden Exchange in May
$127m Linden dollars paid via weekly stipends in May
860k residents logged in over the last 30 days

Since Linden pays $300 Linden dollars in weekly stipends to premium members, there are around (127m/300/ 4 weeks=) 100k premium subscribers paying $6-10/mth. Lets call that $800k in monthly revenue from premium subscribers.

Linden dollars currently exchange at 264 Lindens to the USD, so Linden Labs made $165m/264 = $625k in currency sales.

These are the two primary sources of Linden dollars into Second Life’s economy, so Linden Labs made at least $1.4m in revenue from the 860k residents that logged in over the last 30 days, or roughly $1.70/active user.

UPDATE: Several comments note that I have ignored the bulk of Second Life’s revenue which is derived from land maintenance. An updated analysis is here.

Club Penguin

When Club Penguin was bought by Disney in August 2007, it was reported to have 12m registered users and 700k paying users. As the monthly charge for paying subscribers is $6, this suggests monthly revenues of around $4.2m. Compete reported 2.6m UU to Club Penguin in that month. Dividing these two numbers we get around $1.62/active user (where an active user is defined as a unique user in that month).

Habbo Hotel

At AGDC in September of 2007, Habbo Hotel’s lead designer, Sulka Haro gave some statistics on Habbo Hotel’s usage:

Habbo Hotel has approximately 7.5m unique players per month globally — nipping at the heels of World of Warcraft. In the seven years since the game launched, 80 million accounts have been created. Globally, the game typically has 100,000 concurrent users playing at one time.

Furthermore, Habbo was estimated to do $77m in revenue in 2006. In the middle of 2006, Habbo had around 53m accounts. Assuming a similar ratio of monthly players to total accounts in mid 2006 to what Habbo has today, that suggests that there were around 5m unique players per month at that time. Dividing $77m by 12 months by 5m unique players suggests about $1.30 in revenue per active users.

Runescape

Finally, Jagex’s Runescape claimed 1m players paying $5/mth in May 2007 and 6m players per month in October 2007. That suggest $5m/mth in revenues from 6m players, or around $0.84 in revenue per active user.

In summary then we have:

Second Life: $1.70/mthly user/mth UPDATE: Should be $9.30/mthly user/mth
Club Penguin: $1.62/mthly user/mth
Habbo: $1.30/mthly user/mth
Runescape: $0.84/mthly user/mth

The average across these four is $1.40/mthly user/mth*. UPDATE: excluding Second Life, should be $1.25/mthly user/mth.

Having spoken to many other MMOGs and virtual worlds on a private basis, this estimate seems to be a good gauge for what a well performing MMOG can aspire to from a free to play business model.

Do readers have any datapoints that they can add to this survey?

* Note that this is based on monthly users. Many MMOGs calcuate their average revenue per user (ARPU) based on Peak Concurrent Users. On this basis, ARPU can be more than an order of magnitude higher than the $1.40 guideline.