Conclusions in a paper from Deloitte’s technology integration team highlight the currently unrealised business potential of virtual worlds.

Synthetic or virtual worlds have created a new way for people to socialise, entertain, innovate and transact business. As they become more popular - and increasingly sophisticated technology increase their potential - they will have a significant impact and revolutionise personal and business interactions.  This can be a daunting reality for many companies, since traditional inward-focused business models will not have long-term sustainability in these new virtual worlds.

The paper written by Kamales Lardi entitled; ‘Breathing a second life into synthetic worlds’ points out that self organised online communities present lucrative opportunities as they offer a new route to market, one that traditional business models are unable to embrace.

‘Breathing a second life into synthetic worlds’ concludes that:

• Few companies understand how to assess or measure the potential of virtual worlds.
• Many companies have established a presence in virtual worlds, with sometimes inappropriate strategies, to much media fanfare and then quickly abandoned their online business. Their failure has cast doubt over the potential business value of virtual worlds.
• Within the next five years, synthetic worlds will begin to dominate and drive brand building in major companies. That will give a competitive edge to enterprises already established in these interactive environments.
• There are brand and reputational risks, similar to those found in the online environment, which businesses face when entering virtual worlds.  These new environments are consumer-controlled and organisations have little power over the impact of their message on the consumer.
• Parallels can be drawn with the dotcom boom of the late nineties where many companies failed to differentiate themselves through a business model that was correctly tailored to suit the new market.
• Virtual worlds have been through a cycle of inflated expectations, excessive hype and disillusionment and are now ready to enter a period of maturity and productivity. 

Commenting on the implications of the growing use of virtual worlds Kamales Lardi said: “Virtual worlds present opportunities that business would be wise to realise sooner rather than later. The inevitable changes brought about by virtual environments will redefine the way businesses interact with consumers and enable more sophisticated collaboration within organisations.

“Although the number of active visitors to virtual worlds has yet to reach a critical mass, those that explore and understand these environments today will win consumer loyalty tomorrow. In order to develop a strategy specifically suited to consumers of this new environment, companies must first understand the virtual market and its users,” she said.

Three phase process
The Deloitte paper recommends that businesses should take a long term strategic view and then adopt a step by step approach in order to make an informed decision on whether to establish a presence in virtual environments.

For further information, read our executive summary and download our publication Breathing a Second Life into synthetic worlds. (PDF, 87KB)

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Notes

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country's leading professional services firms.  Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu ("DTT"), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other's acts or omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.