We are currently doing a lot of research and writing on VTS (virtual team spaces) which have been around since the ‘80s. Currently these mostly asynchronous tools are being combined with real-time technologies to provide a more compelling experience for those using them. But what will the future of VTS look like? Could a VTS be a virtual world populated by team member avatars?

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Avatars R US

Those 15-25 year olds that every online marketer seems to be targeting in the consumer space are a generation that grew up with computers. My nephew Dylan was better on the computer then his mom when he was 4. This generation is willing to spend real money on ringtones, wallpaper (almost a billion dollars in 2005) and now avatars.

Sean Ryan, founder and CEO of Meez allows users to create caricatures of them selves and then use that avatar (image) wherever they want. Meez has received over $4 million in venture funding. Ryan got his idea from watching people in Korea (the number one connected country on the planet) interact with each other.

Meez is currently a free, Web-based service that offers thousands of facial and costume combinations, but Ryan plans to make money by offering users the chance to have their avatars wear licensed brands, like Major League Baseball and National Hockey League jerseys, and premium clothing designs for a fee. Pricing should be similar to the cost of a ringtones or wallpapers download.

Not the First

But Meez is not the first to offer avatars. Tixeo, a 3-D collaborative environment from France uses avatars to represent people in a common (collaborative) space. Yahoo! has offered up free avatars for almost two years, but the caricatures can't be personalized as extensively, and the pictures can only be used within the Yahoo! network. Palo Alto, Calif.-based chat startup IMVU also offers avatars, but the 3D images can't be used on other instant-messaging systems. Comverse Technology has announced an avatar service called "Klonies," designed solely for mobile services, but the product has yet to launch in the U.S. Ryan says Meez doesn't yet let users move the images to their phones but will eventually.

Virtual World Avatars

The online game Second Life is drawing legions of eager players -- and big bucks from VCs who see hard profits in a booming fantasy world is taking avatars a step further, and supporting a whole virtual economy from it. With 165,000 users (one of whom is Jeff Bezos, CEO of Amazon.com which put $11 million into Second Life), Linden Labs has just scored a $32 M round of funding (they got $8 million in October or 2004).

Last summer at the SuperNova Conference, Linden Labs had a demo of Second Life at one of the cocktail parties. In the demo you could create a character (Avatar) and place him/her into a virtual dance party atmosphere. Your stock avatar was pretty boring, but you could buy him/her some new virtual clothes, and even buy some “dance moves” for your avatar that would make them seem cooler and more attractive.

Second Life is a three-dimensional digital world in which players can do just about anything: Create an avatar that acts as an online alter-ego, fly around landscapes dotted with dance clubs and gardens, and socialize via text messaging with friends' avatars. The population inside Second Life has grown eightfold from a year ago, when just 20,000 "residents," as they're known, called it a second home.

Second Life is one of many Massively Multiplayer Online Role-Playing Games (MMORPGs), such as No. 1-selling World of Warcraft from Vivendi's Blizzard Entertainment unit, which has more than 6 million players, each paying $15 a month. But unlike World of Warcraft, where players go on quests and slay monsters, participants in Second Life create their own reality. This is much like what you do in the “Sims” game.

The Virtual Economy

EverQuest with more than 450,000 players worldwide also has its own internal economy in which players’ trade virtual goods. Players generate goods as they play, often by killing creatures for their treasure and trading it. The longer they play, the more powerful they get. There is even an artificial currency "platinum pieces" inside the game. EverQuest which was launched in 1999 now has some veteran players who own entire castles filled with treasures from their quests.

However, this economy is not just a virtual economy and there are "player auctions." EverQuest players would sometimes tire of the game, and decide to sell off their characters or virtual possessions in an on-line auction site such as eBay. A Belt of the Great Turtle or a Robe of Primordial Waters might fetch forty dollars; powerful characters would go for several hundred or more. And sometimes people would sell off 500,000-fold bags of platinum pieces for as much as $1,000. An out of work economist did some calculations based on these auctions and found that a “platium piece” was worth about one U.S. penny, and that on average an EverQuest player was making about $3.50/ hour.

These virtual worlds use software, available through detailed menus, to create everything from avatar clothes to buildings to games that are played inside the virtual world. Each “resident” of a virtual world is like an annuity, the longer they subscribe and the more complex their character becomes the more tightly they are hooked into the subscription service, so no wonder the venture capitalists love this model!

Virtual worlds have produced some surreal rags-to-riches stories. In Second Life players were impressed to see a female avatar industriously building a sprawling monster home, only to find out later that the reality behind the avatar was a homeless person in British Columbia logging on using her single remaining possession, a laptop. Penniless in the real world, she belonged to the social elite in the fake one.

Over the last year there has been an emergence of a fledgling economy inside Second Life, in which residents sell virtual clothing, mansions, and land to each other. Once residents "own" virtual land, they have reason to stick around -- in some cases paying hundreds or even thousands of real dollars a month in "land maintenance" fees. Such users are golden for game and Web companies, which like the recurring revenue they generate.

Today there are more than fifty active games worldwide, and anywhere from two to three million people playing regularly in the U.S. The games range from Star Wars Galaxies (where you can wander around as a Wookie and fight the Dark Side) to There.com (where you can wander around Disneyfied islands as an attractive Gap-style model and admire your hot new body). In Korea, a single game called Lineage claims more than four million players.

The Value of Gaming

Millions are already playing online games. Recent research from the Conference Board, NFO and Forrester reveals that 67% of males under 35 are online gamers with 62% of females in the same age category also following suit.

Not to be left behind big retailers like Chrysler have used games on a new web site to promote its new Wrangler Rubicon, directly generated fourteen percent of the vehicle's initial orders. The U.S. Army "recently spent more than $7 million on a suite of games to support the increasingly difficult task of signing on 120,000 new soldiers each year". The results are impressive. Since July 4th, 2002, 1.2 million registrants played 55 million game missions for an average of 10 minutes each; 758,584 players completed the game's basic-training component; Web site hits went from 30,000 hits per day pre-game launch to half a million post-launch.

When I talked to the people at Linden Labs last summer they pointed out that it is not just all fun and games, but that people with Asperger’s Syndrome (a mild form of autism that often gets in the way of social interactions) have a chance to practice social interactions (through their avatars) online, and through that practice get better at social interactions in real life.

Online gaming is more and more seen as a good training tool, and is being used for: enhancing congintion, simulations of difficult situations, decision making, leadership training, military training, increasing perception, problem solving, social comunication, and strategic analysis.

OnLine Options

Second Life has competitors, some of which are here in the SF Bay Area. A startup called Multiverse Network Inc. in Mountain View, Calif., has created virtual world creation software. It is software that allows other companies to build their own virtual worlds.

In the open source world there are already at least three groups implementing some form of open, metaverse-like platform: The Open Source Metaverse Project, or OSMP, the Croquet Project and MUPPETS.

MUPPETS, or Multi-User Programming Pedagogy for Enhancing Traditional Study, is the brainchild of Andy Phelps, an assistant information technology professor at the Rochester Institute of Technology. He uses the project to immerse new students in their coursework even before they develop sophisticated programming skills.

My Team of Avatars

If we follow the “self service” trend we have seen in the collaboration space, then it will not be long before users themselves will be able to create their own worlds. I can envision a future where the leader of a team rather then just creating a team workspace, creates a virtual world, allowing each of the team members to create their own avatars, and the avatars interact with each other virtually to perform a task or reach a goal. Team members or players could be paid in “platinum pieces” which later could be converted for real cash or bonuses if the team reached their goal within the time frame and budget.

A well known science fiction authors Larry Niven and Steven Barnes in their 1986 book Dream Park postulated a virtual world where teams were given not only challenging mental assignments (they had to solve a murder) but also physical assignments (playing in a virtual world like the “holo deck” on Star Trek) that helped them loose weight and gain skills and confidence over the course of the game.

France Telecom has designed a virtual world (Virtual Collaborative Environment: VCE) where clones make it possible for persons at a distance to collaborate in real time. Baptized Spin-3D, this interface takes the form of a virtual scene in 3 dimensions (a conference room, for example) on the users' multimedia PCs. The clones reproduce the activities, words and postures of the participants on-screen, and virtual 3D objects can be shared, handled and transformed. Reality isn't reproduced in its finest details. Only the interesting characteristics of the real world are used in order to obtain both a good quality in communication and a good perception of the actions of the participants.

Such a VTS would certainly put the “fun” back in distributed team work. It would also go a long way in solving the collaborative compensation problem (what is your value to the team and do specific actions bring more value to the team and project), in other words how do you reward people (or penalize them) for collaborating? My bet is it will not be long before we see the focus of these avatars and VTS shift from consumers and Warcraft to business avatars and M and A deals!