Investors put $184 million in 23 virtual worlds in the first quarter
We’re going to have a veritable galaxy of virtual worlds soon. Investors put $184 million into 23 virtual world companies during the first quarter of 2008, according to Virtual Worlds Management. That may sound like a lot, but the froth in this sector is actually down from the past.
The investors include angels, venture capitalists, and media companies. In a sign that the kids market is heating up, eight of the investments, worth a combined $16 million, were in youth-oriented virtual worlds.
Mirror worlds also drew three investments worth $15 million. These worlds either try to duplicate a reality, like a luxury travel destination, or mix the real with the fantastic.
The investments were down compared to last year’s fourth quarter investment of $425 million across 15 companies. But $300 million of the fourth-quarter amount went to one company, Zenimax Media, which was more of a game-related investment than a virtual world. The game investments in this past quarter were a mixture of social networking and games.
Joey Seiler, Editor of VirtualWorldsNews.com, said the recession is hurting investment and the first quarter results show that. He noted other surveys show that confidence among Silicon Valley venture capitalists has hit a four-year low. So in this context, the virtual world fundings were still significant. Chris Sherman, executive director of Virtual Worlds Management, predicted that enterprise-related virtual worlds (such as the Unisfair virtual trade show builder we wrote about) will continue to pick up momentum.
About $100 million of the first quarter virtual world investment total was raised by 9You (a Chinese music game/virtual world) and came from Temasek Holdings. For a list of the other investments, look here.
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About the Author, Dean Takahashi
Dean is lead writer for GamesBeat at VentureBeat. He covers video games, security, chips and a variety of other subjects. Dean previously worked at the San Jose Mercury News, the Wall Street Journal, the Red Herring, the Los Angeles Times, the Orange County Register and the Dallas Times Herald. He is the author of two books, Opening the Xbox and the Xbox 360 Uncloaked. Follow him on Twitter at @deantak, and follow VentureBeat on Twitter at @venturebeat.