Virtual Worlds: A Review

Virtual Worlds: A Review

Manish Gupta (University at Buffalo, USA), Sung Jin (University at Buffalo, USA), G. Lawrence Sanders (University at Buffalo, USA), Barbara A. Sherman (Buffalo State College, USA) and Anand Simha (University at Buffalo, USA)
DOI: 10.4018/978-1-4666-6256-8.ch008


Virtual Worlds have emerged as important socio-technical artifacts with the potential to impact many important facets of contemporary society and to enable unique, novel business models in the digital economy. The authors present a rich account of the ways in which virtual worlds interact with modern society, their present heuristics, and future promise, with examples of successes and failures. The present and projected impact of virtual worlds on corporate business models, on the academic sphere, on cutting-edge healthcare, and on society in general are examined based upon existing literature, and legal issues arising from virtual worlds are summarized. This is done to develop a broad understanding of this emerging and serviceable new artifact, its numerous applications, and possible consequences. Based on this extensive review, the authors propose a research agenda for the information systems discipline vis-à-vis virtual worlds and identify critical issues connected with virtual world technologies and strategic management practices. The objective of this review is to establish a foundation for future research on virtual worlds.
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Virtual worlds are defined as “online immersive game-like environments where participants engage in socialization, entertainment, education, and commerce” (Mennecke et al., 2007). They are typified as massive multiplayer online (MMO) virtual environments that are part of the “entertainment/fantasy” sub-type of the broader concept of virtual communities (Carver, 1999; Jones & Rafaeli, 2000). There exist several types of virtual worlds: game-focused massive multiplayer online games (MMOG) that rely on fantasy and role playing (e.g., World of Warcraft) and socialization-focused massive multiplayer online social games (MMOSG) that function on the basis of shared interest communities (e.g., Second Life). What is unique about these MMOs is that users/players in these virtual worlds represent themselves as virtual characters (known as “avatars”) and interact to complete game tasks, create and exchange virtual assets, and to develop social relationships (Fink, 1999; Blackwood, 2006; Lessig, 2000).

Several factors make it difficult to accurately gauge the exact size of the virtual worlds market, or to compare market performances of various providers. These factors include differences in interpretation of the very definition of a virtual world; differences in the sample space of virtual worlds used; the fact that the detail provided by a source is often insufficient to clearly identify the sample space; the fact that types of data once reported are no longer updated and reported even though the virtual world is still actively used; the fact that information is often held by proprietary sources and are both expensive and not readily available to academic researchers; and international currency differences in both real and virtual worlds.

Notwithstanding these limitations to assessment, it is evident that virtual worlds have attracted high volumes of online users. Virtual world users were projected to exceed one billion by 2017 (Cohen and Gilbert, 2008). That projection was exceeded five years early, with 1.9 billion actual registered accounts reported in 2012 (KZero Worldswide, 2012a). Studies estimated that there were almost 8.5 million monthly subscribers of World of Warcraft in 2007, about 8 million registered participants of Second Life as of July 2007 and over 10 million users of Cyworld as of February 2007 (Camp, 2007; Cyworld, 2012). These figures increased significantly after these estimates were reported, and the trend that is continuing. Registered users of Cyworld doubled over the preceding year to exceed 25 million in February 2009 (Cyworld, 2012)and Second Life Grid Survey ( reported 31 million Second Life residents in 2012.

KZero Worldswide (2012b, 2012c) is a firm that researches and advises on virtual worlds and on the massively multiplayer online and social gaming sectors ( Since 2006, they have tracked revenues, market size, age profiles and branded virtual goods. Their report for the first quarter of 2012 shows a total 1.4 billion registered accounts across 61 virtual world environments and projects growth to an active virtual world user base of 1.9 billion in 2013. These figures are exclusive of the widely popular Second Life, CyWorld and Entropia Universe, which KZero does not provide figures for, making the overall market even larger. As many as 45 of 61 virtual worlds have over one million registered users each. The breakdown by user figures of these 45 virtual worlds is as follows:

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