Wednesday, March 19, 2008

Virtual Worlds and Real Estate

Virtual Worlds and Real Estate

Virtual Worlds continue to evolve and enchant marketing professionals as rich media experiences continue to improve and integrate blogging, instant messaging, podcasting, discussion forums, gaming, and rich communication interaction experiences. One of the major opportunities for Virtual Worlds is to help sell real estate property as it provides an opportunity to navigate real estate properties leveraging three dimensional experiences. Second Life, the 10 pound gorilla, founded by Linden Labs, has been innovating in Virtual worlds since it was founded in founded in 1999 by Philip Rosedale to create a revolutionary new form of shared experience, where individuals jointly inhabit a 3D landscape and build the world around them. Second Life, has a rapidly growing population of over 10,000 Residents from around the globe, who are creating and inhabiting a virtual world of their own design. Just today, when I signed in to my account under Syndi Lane and, there were over 200,000 member’s teleporting (navigating or flying) from one real estate landscape to another.

There has been a number of innovative real estate developments enter Second Life including Starwood Hotels where they initially launched a new hotel brand, aloft, in the massively multiplayer virtual world of Second Life over a year ago. Their in-game implementation, called “aloft island,” was based on early designs and floor plans and will serve as a 3D dress rehearsal for the actual hotel. Another active Real Estate company, based in Canada that aggregates market information on condo projects around the world is Global Condos.

On November 12th, 2007 they unveiled its comprehensive virtual directory of new condo developments in Second Life. An international project with locations in Dubai, India, and South Africa, developments are organized by the city and region in which a developer’s project is located. This ensures the property is showcased in searches by local residents as well as global buyers. Condo Centre offers access to information about multiple developments in a single location and a Web site listing condos for sale in different cities. Potential condo buyers in SL can to explore new developments, view information detailing real-world properties with interactive floor plans and design options. “We wanted to create an immersive and interactive experience for prospective buyers”, says Cliff Bowman, President of Global Condo Centre. Bowman’s SL avatar name is Barry Janus. “Our real estate developer clients around the world pre-sell condo developments aimed at several demographic profiles. Namely the Boomers, X, Y generations and the newest profile, the “Net Generation or Thumb Generation”. Visitors to Global Condo Centre Island may get the chance to a walk through floor plans in real time and interact with design options, altering the flooring, kitchen cabinets and wall colors that better fits their lifestyle: urban, resort or ski recreation.

What are the implications to Real Estate Developers in Canada?

1.) Marketing Strategies and Online Web Planners will need to start thinking about how to develop virtual world experiences to reach out to a new market segment of buyers that are tech savvy. In looking at future segments like Gen X and Gen Y’s who in less than 10 years will be able to make major investments in the real estate or condo market….companies that get ahead of the game and build relationships with their future customers here will have a lead advantage

2.) These environments provide low cost and low risk ways to test new real estate design plans and seek customer feedback on the design using online focus groups in virtual worlds.

3.) Opportunities to sell virtual world real estate and develop a new revenue line.


We have been analyzing marketing approaches to Virtual Worlds with CMP Media out of New York for over a year, with Dr. Dobb’s brilliant visionary, John Jainschigg and in our seminal evening conversations when we were key note speakers last year at the International KM World Conference, we both concluded that we are entering another generation of web presence, where the experience economy promise is rapidly changing how consumers, and markets will interact in purchasing their products and services. There was a day when people could not fathom how eBay could dominate a global community auction, with staggering growth rates

Marketplaces net revenues totaled a record $1.5 billion in Q4-07, representing a year-over-year growth rate of 21 percent. With 46 percent from US operations and 54 percent from its International business.

In Q4-07, gross merchandise volume (GMV), the total value of all successfully closed items on eBay’s trading platforms, was $16.2 billion. (Total GMV for the full year 2007 was more than $59 billion.)

eBay users worldwide trade more than $2,039 worth of goods on the site every second.

There were 637 million new listings added to eBay worldwide in Q4-07. At any given time, there are approximately 113 million listings worldwide, and approximately 6.7 million listings are added per day. eBay users trade in more than 50,000 categories.

We predict that like with communities like eBay, virtual worlds will create new communities of interaction which will shift traffic patterns of consumers. Early predictions by Gartner Group have indicated that by 2011 over 80% of tech savvy users will have an avatar. This is only three years away.

If this growth rates happens as aggressively as forecasting this has significant implications to not just real estate markets, but also to all marketing professionals world-wide in their struggle to capture eye balls.

The real question is your organization prepared for a virtual world tsunami – it is moving and gaining strength and momentum – although skeptics are still resting on the beaches – those that are smart are entering virtual worlds now to test and learn to ensure there are positioned effectively to ride the constant currents of change.

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