A recent report by Virtual Worlds Management states that, as of April 11th of this year, there are over 100 tween and/or virtual worlds now operating or in development. Virtual worlds like MyPenguin, GirlSense, and Doko are big business, generating sales around 1.5 billion for virtual pets, icons, clothing, and even virtual real estate in Second Life.
Over on the Ad Age blog Reuben Steiger reports that retailers such as Target, WalMart and Walgreens now sell pre-paid gift cards for use in these virtual worlds. That's right: tweens are spending real money on virtual items. According to Steiger, here's how the dots connect:
"Now here's where the cards come in. While these kids have a seemingly endless appetite for virtual goods, they don't have credit cards. Even if they did, the stuff they're buying costs between 20 cents and $5 -- creating a problem when the cost of clearing the transaction is greater than the value of the item.
The cards solve this by allowing a parent to buy their child $10 or $25 worth of virtual currency. The card company takes a fee off the top, generally somewhere in the neighborhood of 20% (nice business model, huh?) and the rest goes to the kid to spend at the virtual mall."
In other words, kids today are doing the same things previous generations have done, they just use different tools. While all of this talk of spending hard currency on virtual products sounds a bit crazy, think of it this way:
We hung out at the mall, they hang out in virtual worlds. We communicated with our friends by passing notes, they send text messages. We used the telephone to plan our social calendar & gossip (the one with a cord, connected to the wall), teens use the mobile phone to chat or text their friends.
Where adult social networks are still struggling to find a viable business model, teen virtual worlds seem to have found a successful strategy to tap into parents wallets. This is also the continuation of a well established trend.
In the last 25 years, we've watched parents go wild to provide their children with Cabbage Patch Dolls, Beanie Babies or Tickle-Me-Elmo. Now, in the digital age, parents seem willing to do it all over again.
Same behavior, new tools.