In a down economy, that might be an affordable luxury to a teenager or twentysomething hanging out in a virtual world like Gaia Online, which this week will start selling a range of digital accessories depicting the rock legend’s style, including blue suede shoes, a white-rhinestone jumpsuit ($4) and a pompadour ($1.50).

Younger people unfamiliar with Elvis might prefer to shell out $2 for Justin Timberlake’s signature fedora or $3 for a pair of Snoop Dogg Dobermans to raise the cool quotient of their characters, known as avatars.

That is the premise behind Virtual Greats, a start-up in Huntington Beach, Calif., that represents celebrities and brands in the burgeoning American virtual goods business. The one-year-old company acts as a broker between Hollywood and the technologists who run youth-oriented virtual worlds like Gaia, Whyville and WeeWorld.

So far, the deepening recession has not slowed sales of virtual goods, which executives attribute to people spending more time at home. Gaia Online, a youth world with seven million monthly visitors, sells more than $1 million a month of virtual goods and expects a record month in December, said its chief executive, Craig Sherman. One rival, IMVU, has also had a 15 to 20 percent increase in sales since September.

Facebook, the leading social network, allows members to spend real money to send virtual gifts, and it has worked with corporations like Ben & Jerry’s Homemade, which gave away 500,000 virtual ice cream cones in April as part of a Free Cone Day promotion in stores.

Consumers are tightening their belts, but they still want to socialize with peers and express themselves, industry executives say. Virtual goods like Paris Hilton’s pet Chihuahua or Mr. Timberlake’s puffy jacket can offer a cheap way to stand out.

“People are thinking that they’re sacrificing in other areas so I’ll indulge here with a dollar,” said Charlene Li, a social media analyst formerly with Forrester Research. “Is it worth it? It depends on them.”

By most estimates, customers spend about $1.5 billion a year on virtual goods worldwide. Tencent Holdings, a publicly traded Internet media company based in China, is the leader, with hundreds of millions in annual revenue from virtual goods in online games and other applications. Internet companies in the United States are behind the curve.

For celebrities, licensing virtual products is a new way to make a buck and stay hip with a young crowd. Snoop Dogg’s manager, Constance Schwartz, said she did not have a clue about virtual worlds when Virtual Greats approached her this year, so she and her team spent a week exploring Gaia Online.

After seeing that many teenagers were spending their time and allowances there, Ms. Schwartz explained the concept to Snoop Dogg. She said it was an easy sell, given that Snoop Dogg had been one of the first rap musicians to license works for ring tones and voice tones. His only requirement was that all of the goods be “true to himself,” down to the hair braids, house slippers and plates of Roscoe’s chicken and waffles he regularly eats in Los Angeles.

At Elvis Presley Enterprises, virtual worlds are just another drop in the bucket — 250 licensees worldwide sell 5,000 Elvis products and promotions, including talking dolls, Pez dispensers and a Facebook page. “Elvis is everywhere,” said Kevin Kern, a spokesman for the company, which controls the name, image and likeness of the rock star. “Why not the virtual worlds?”

Virtual Greats appeals to partners like Snoop Dogg and Elvis Presley Enterprises because it does the legwork that neither party — rights holder or virtual-world operator — has the desire or time to do. On one end, it courts celebrities and brands, negotiates licenses and aggregates talent; on the other end, it coalesces an otherwise fragmented market of virtual worlds starved for added sources of revenue.

Dan Jansen, former head of the Boston Consulting Group’s global media and entertainment practice, started Virtual Greats in partnership with Millions of Us, a marketing agency in Sausalito, Calif., that builds virtual worlds. The two companies shared the idea that virtual worlds lacked diverse revenue sources and had no presence when it came to celebrity or branded goods. The Omnicom Group, a marketing and advertising firm, and Allen & Company, an investment bank, invested an undisclosed sum in Virtual Greats.

Virtual goods have profit margins of 70 percent to 90 percent because they do not cost much to store, reproduce or distribute. Still, making a profit requires high volume. Next year, Virtual Greats hopes to represent 30 worlds and more than 50 artists.

It is talking with movie studios about licensing rights to characters like Ferris Bueller and with sports leagues for the rights to jerseys. It is also courting luxury brands like Gucci, Prada and Chanel for the rights to represent their goods online.

One challenge for Virtual Greats and its partners is to create legitimacy for the online brands while ensuring that there is not too much supply.

Mr. Sherman says Gaia uses “forced forms of rarity,” or limited editions of items. Over time, those items can command a premium in the secondary market, where members trade their goods for virtual currency. For example, a Gaia golden halo now out of production sold for $6,000 on eBay, he said.

Similarly, Virtual Greats has learned that it underpriced some items, like the Hulk Impact Crater, which originally sold for 50 cents, then went up sixfold in the Gaia aftermarket. In its several months of testing, Virtual Greats has found that people prefer more expensive items with a brand name over cheaper, generic items. And larger items that are easier to see are more popular than small ones.

Licensed virtual goods probably will not be more than a tiny niche business. Generic items are a huge portion of the virtual-goods market, and company-sponsored promotions like the Ben & Jerry’s cones on Facebook will probably grow in importance as marketers try to extend their brands onto social networks.

The economic downturn could make many people reconsider the notion of spending real money to outfit fictional personas with an Elvis pompadour or a Snoop Dogg hoodie.

Still, Mr. Jansen argues that people always crave a bit of brand-name glamour. “Maybe you can’t afford that Louis Vuitton bag, but you could in virtual form,” he said. “They’re an affordable luxury in this difficult economy.”

Metaplace, a startup that allows users to craft their own virtual worlds, has closed a $6.7 million funding round led by Charles River Ventures and Cresendo Ventures along with Marc Andreessen and Ben Horowitz. The round brings Metaplace’s total funding to $9.4 million. Alongside today’s announcement the site is also opening an invite-only private beta, and 200 TechCrunch readers can sign up immediately by going here and entering the code “MPTECHCRUNCH”.

Metaplace (which was formerly known as Areae) is building a platform that allows users to build their own Flash-based virtual worlds, and caters to both novice and experienced gamers alike. New players who’d just like to throw something together can drag and drop items from the site’s marketplace, much as they would in the game The Sims. More experienced users can choose to create and submit their own designs to the marketplace. And for experienced programmers, the site features a full scripting engine (similar to what is found in Second Life), allowing users to create entirely new gameplay features.

It’s an ambitious project to be sure, but it’s headed by industry veterans behind some of the biggest massively multiplayer games ever released, including Ultima Online (a precursor to Everquest and World of Warcraft that continues to have an avid following a decade after its release). Users have already created worlds ranging from Zombie-filled graveyards to puzzles and platformers. We’ll have a more thorough review once the game launches to the public and is more feature-complete.

Metaplace will be facing some stiff competition. This is a very crowded space, with browser-based virtual worlds from the likes of Second Life, Google’s Lively, and WebFlock, along with a host of worlds that are geared towards a younger crowd.

When most people think of computer games, they think of escapist titles like World of Warcraft, Call of Duty, or Super Mario. Even most games that label themselves as simulations, like the ever-popular Madden football series, are meant to more for fun than realistic training.

Development studio Intelligence Gaming is behind a different kind of game, dubbed “serious gaming” – games that are designed to teach users rather than entertain them. The company has previously created games for the United States Navy, and has now been contracted by the Army to develop a new kind of game that is part virtual reality, part movie. The company teamed with development and design firm EffectiveUI to create a technology called RealityV based on Adobe’s upcoming Flash 10 platform. The result: 3D interactive simulations that could revolutionize training in the military, health care, retail stores, and any number of other industries.

At the core of each RealityV experience is a a full motion movie shot in 360 degrees. This movie is projected into a special headset that strongly resembles the “Virtual Reality” googles of yore. As the user rotates, their perspective in the video rotates as well (they can only rotate around a single point, as the technology doesn’t yet support movement). During the videos users are forced to make quick decisions that affect the scene’s outcome – it’s sort of like a ‘Choose your own adventure’, except you feel like you’re actually there. Users can also use RealityV from their browser, but this effect is lost.

The first application of the technology is “Immersive Cultural Simulation Product”, a game created for the Army that teaches soldiers how to handle cultural differences in Iraq. Soilders are forced to make decisions in real time as they watch the people surrounding them, paying attention to gestures and facial expressions to decide who to pay attention to and look for any possible threats. The first scene available involves a group of soldiers attempting to convince a small village’s leader to cooperate with a checkpoint station that they are setting up, and the Army has ordered three more episodes taking place in Iraq.

Steve Weyl and Anthony Franco, presidents of Intelligence Gaming and EffectiveUI respectively, say that the team initially considered using traditional 3D models for the scenes but realized that current technology simply isn’t able to capture the subtleties of human expressions. Instead, they chose to go with professionally produced videos, which may in the end be a blessing when it comes time to licensing out the technology to third parties.

The two companies won’t reveal much about RealityV’s future outside of the military, but they acknowledge that the technology could be used in a variety of fields. Medical students could take part in a stressful surgical theatre, getting an idea of what goes on without getting in the way. And retail chains could use the system to create a scenario for dealing with upset customers. The companies have plans to license the filming technology out to these businesses as well so that they’ll be free to create their own scenes (something that couldn’t be done with 3D game models).

To get an idea of what a RealityV scenario looks like, check out the embedded video or click here to watch an extended version

Second Life’s virtual world is providing real-world recruiting help to Ontario Public Service.

10/8/2008 5:00:00 AM By: Brian Jackson

A firefighter turns his hose towards the sparse collection of tall pine trees surrounding the building and aims its stream of water into the flames that are exploding outwards from the branches and foliage.

Protected by a heavy, flame-retardant vest and a helmet with a transparent face shield, he is doing his best to deter a total disaster.

But the conflagration is spreading – inexorably moving from one tree to the next and soon the entire landscape is ignited in an orange glow. The crackling sound is menacing and the fire’s determination to consume the building, unstoppable.

This would be one heck of an expensive and dangerous training exercise if it were happening in real life.

But it isn’t. It’s an experiment in Second Life, the virtual world designed and hosted by San Francisco-based Linden Lab Inc.  And the point of this flaming simulation isn’t to train a firefighter, but to give an average person an idea of what it might be like.

“You can don the firefighter gear that our Ministry of Natural Resources has and take on a fire in a simulation,” says Glen Padassery, acting director of the youth and new professionals’ secretariat at Ontario’s Ministry of Government Services. “That idea is you are a career tourist – you have a day-in-the-life type of interaction.”

Ontario’s Public Service is hoping to find new young professionals to replace its ageing workforce. As the average age of a Second Life user is 32, the virtual world is an ideal environment to attempt recruitment.

The award-winning simulation set up by the government may be a virtual island, but it isn’t alone.

Many organizations are turning to virtual worlds as a useful recruitment vehicle and honing techniques for measuring the success of such projects.

Analysts say it’s one more step towards virtual worlds becoming more mainstream and less dominated by a population of computer nerds.

“As youth move more towards the online space, we wanted to make sure we had a presence that would be fulfilling and meaningful to them,” Padassery says.

The government worked with New York-based virtual world design firm The SL Agency to launch a pilot in April. The team selected five of the 18 careers that Ontario was looking to draw attention to: firefighter, medical technician, civil engineer, economist, and traffic analyst.

“They wanted an experiential marketing package that would really show what it’s like to work as a fireman, or in a health clinic,” says Leigh Rowan, vice-president with The SL Agency. “Second Life is perfect for that.”

Aside from the forest fire simulation, users can take water samples from a virtual pond and analyze its contents. A healthcare simulation allows your avatar to perform cardiopulmonary resuscitation (CPR) on a dummy, or watch a bank of television screens to monitor live traffic flow across the province – the real video feed supplied from real highway cameras.

“From Second Life, you can actually send HTTP requests,” Rowan explains. “So we bring in snapshots as thumbnails into Second Life. When you click on that, it launches into an actual video from that camera.”

21 July, 2007

According to PHYSORG.com, “[...] police in Canada are turning to an unusual candidate pool for crime fighters: the virtual world of Second Life.

“Policing has to reflect society, and as technology becomes more pervasive in society, we have to make sure that officers we hire are familiar with the technology,” said Inspector Kevin McQuiggin, head of the Vancouver Police Department’s technology crimes unit.

“Anyone we meet online, by virtue of being on Second Life, likely has an interest in cutting-edge technology or is comfortable with technology … and could make an excellent candidate,” he told AFP.

Second Life, created by Linden Lab in 2003, is one of the most popular digital virtual worlds on the World Wide Web, with more than eight million users worldwide.

Hoping to attract technology-savvy candidates to their unit, the Vancouver cops created online personas or avatars with the help of local university students, and held their first recruiting session on Second Life in June.

A second session is planned by year-end, said McQuiggin, whose team is responsible for computer forensics, investigating harassment by text messages, child porn cases, financial crime, decrypting cell-phone calls of organized crime rings and so on.

Last year, the unit was involved in 18 out of 19 homicides in Vancouver on Canada’s Pacific Coast, scanning computers, cell phones and handheld e-mail devices.

In most ways, the Vancouver Police Department’s June online session mirrored a real-life recruiting session: explaining the force’s selection process, training and job opportunities, he said.

However, the veteran cops found themselves in a virtual world surrounded by 30 avatars with spiked hair, wings and mercenary accouterments.

McQuiggin said recruiters should try to ignore some of the outlandish costumes worn in Second Life. One man reportedly attended another virtual job fair as a female avatar named Dragon while another appeared as a teddy bear.

“The interactivity in Second Life is really neat,” McQuiggin said.

But the avatars can be tricky to maneuver. One job-seeker told the daily Globe and Mail he accidentally presented a recruiter with a beer online, instead of a resume.

And unintentionally sending your avatar hurtling into a wall could spoil that crucial first impression. Of course, with the virtual environment being new to employers too, most are understanding of such gaffes.

According to reports, a growing number of organizations are turning to virtual online communities to find employees for real-life positions, because of their global reach.

In May, TMP Worldwide Advertising & Communications held its first virtual job fair, attracting hundreds of applicants.

Hewlett-Packard, Verizon and Microsoft are also purportedly experimenting with online hiring.

After its first virtual session, the Vancouver Police Department received three applications from Second Life users, including one from Italy, McQuiggin said.

“He had planned to vacation in Canada and decided he’d like to meet with us next week,” he said.

Candidates must still be vetted and interviewed the old-fashioned way, he said.

“We weren’t looking to establish a police station or conduct investigations on Second Life,” McQuiggin said.”

Source: PHYSORG.com

September 2, 2008

New World Notes has been following the use of a Second Life-based simulation for training Canadian border guards designed by Loyalist College‘s Virtual World Design Centre. It’s saving money and having real-world impacts on the interview section of the students’ final test. “2007 – Without using Second Life, student interview skills average grade: 58%,” Ken Hudson of Loyalist told New World Notes. “2008 – after using Second Life simulation, student interview skills average grade: 86%.”

November 2007

Yesterday, Canada Post announced that it has boldly gone to perhaps the last place anyone would have expected it to go: Second Life.

The official launch of Maple Grove will be celebrated tomorrow, November 3, with a six-hour virtual live music festival. As well, throughout the holiday season, the virtual city will host concerts, film screenings and shopping events.

To augment the inaugural festivities, many retailers are offering incentives for Second Life visitors. SkyMall, which recently entered the Canadian market, has a “ship to anyone in Canada” option, allowing Canadian and US shoppers to send gifts to families and friends in Canada. The Shopping Channel will broadcast its special offers throughout the holiday season. Niche retailer Everything Olive will give eco-friendly gift totes with purchases. And Brookstone will take $15 off all purchases of $100 or more.

Why did Canada Post choose to set up shop in Second Life’s worldwide virtual community of more than 8 million registered users? “Today’s net-savvy consumers value convenience and relevance, and there are hundreds of thousands of Canadians in Second Life,” explains Laurene Cihosky, SVP for Canada Post’s direct marketing division. “Maple Grove is our way of meeting those expectations; a virtual place for friends to meet, shop and enjoy the culture that Canada has to offer.

“The post office is the centre of many communities across Canada,” notes Cihosky. “And just like your local post office, visitors to Maple Grove can visit Canada Post and send packages, buy stamps, cards, gift cards and send them to anyone, anywhere in Canada.”

No paid advertising is planned for the Maple Grove venture. Instead, Paulina Sazon, of Canada Post’s direct retail strategies division, tells MiC, “A buzz marketing campaign will take place within Second Life, across social media networks and directly through the mainstream media.”

The initiative will include a series of live entertainment events, discussion forums and a virtual scavenger hunt, all promoted through Second Life’s events calendar, group notices and blogs. Maple Grove will also be similarly promoted on other social media sites including MySpace. As well, says Sazon, “We expect extensive media coverage about the initiative from mainstream media, which are already expressing great interest” in the venture.

Promotional activities are being handled in-house at Canada Post. Development of the Maple Grove initiative was done in collaboration with the mail carrier’s US reps, French West Vaughan, of Raleigh, NC.

October 1, 2008 – 5:40 am PDT – by Adam Ostrow 

Oddcast is taking its talking avatars to the next logical place: virtual worlds. The company is launching a new product called AvatarSpace, a Web application that enables custom avatars to talk to one another through voice or text. However, as opposed to massive services like SecondLife or Club Penguin, Oddcast is targeting individual brands, allowing them to launch their own mini-virtual worlds as opposed to either developing their own or buying ad space in an established one.

The features of AvatarSpace aren’t nearly as advanced as those of some of the larger virtual worlds – it’s more of a group chat that utilizes Oddcast’s existing avatar technology. Using your own voice, you can talk to other avatars in a given chat room, or type them a message via text. Users in the room can also watch videos simultaneously. Moving around is simple enough, and can be done either via your computer’s arrow keys or mouse. 

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