Google blessed the virtual world market with its own entry yesterday. But it is hardly alone. Investors poured $161 million in 16 virtual world companies in the second quarter, according to Virtual Worlds Management.
The investments help put the launch of Lively by Google into perspective. Lively is more like a virtual room business rather than a true virtual world. There is a ton of competition in a market that has had only a handful of successes to date.
The numbers are down a little from the first quarter, when investors put $184 million into 23 virtual worlds. But each quarter is lumpy, based on the occasional big investment. But the rate of investment is still breathless. To date, $345 million has been invested in 39 virtual worlds in the first six months of this year.
A couple of the companies that were acquired hadn’t actually produced virtual worlds yet. IAC bought teen fashion community GirlSense and Hi5 bought PixVerse. Joey Seiler, author of the report, said that more investments are going into peripheral interfaces and platforms. That is, investments are being made not just in the worlds themselves, but in the surrounding products as well, such as a $200,000 investment in Metaverse Mod Squad, which provides support for virtual world events.
Most of the money went into two massively multiplayer online companies. Turbine picked up $40 million and Reatime Worlds raised $50 million. While there were eight youth-oriented world investments in the first quarter, only a $1.9 million investment in Akoha and the GirlSense deal fit that category in the second quarter.