Virtual Worlds

Mogobe is part of one of the fastest growing Internet phenomena today: virtual worlds. Virtual worlds (VWs) are the answer to an increasing demand for a safe place for kids to spend their time meeting old and new friends of their own age and background, playing games, wining prizes, and having fun.

Our virtual worlds will target children, ages 6-12, in different cultural communities around the world. These WVs will provide a safe, fun and exciting place for kids to play online.

Market Forecast

Key Growth Drivers (KZERO worldwide report)

Buckle-up - It’s going North. We’re extremely bullish on the virtual worlds sector. Now of course, we would be and we should be, but there’s too much momentum from both the demand and supply sides of the market to slow down the growth. We see specific market-wide drivers contributing to the overall growth in the virtual worlds

sector as follows:

Perceived Value: As virtual worlds continue to attract new users, we expect greater perceived value to be Created. By this, we’re referring primarily to a greater acceptance from parents both to allow their children to play in virtual worlds and as important, an increase in permitted spending, approved by the parents.

Greater Funding: Whilst the number of new business cases in the virtual worlds space didn’t slow in 2009, the supply-side of financing (the VC’s) pulled-back from investing, slowing the growth. Now, in Q4 2009, we’re seeing a small subtle increase in investment that we expect to strengthen significantly in 2010.

Brand Awareness: Coupled with the increase in perceived value, we see the real-world presence of virtual worlds assisting in the market growth. Virtual worlds are increasingly moving into offline environments, with Pre- Paid cards being a great example. Simply being able to see virtual world brands on store shelves will assist in brand recognition and subsequently brand recall when potential users go online.

Payment Mechanics: Whilst the majority of existing virtual worlds rely primarily on credit card payments for user monetization, we see the growth in premium SMS transactions from cellular devices being a powerful force.

This payment mechanic has benefits in several areas. Firstly, many younger users are given pre-paid phones, meaning their parents are less likely to monitor their usage. The result here is that these users are more able to purchase virtual currencies/goods. Secondly, the actual process of purchasing is significantly easier with phones than credit cards - typically a five-digit code is sufficient to activate a transaction.

Growth in Numbers

Our Q4 2009 forecast for the growth in virtual worlds is shown right. There were circa 85 worlds in the market at the end of 2008 and we’re forecasting 150 by the end of 2009.

From here, moving into 2010 we anticipate a simple doubling of worlds, with the Kids, Tweens and Teens (KT&T) sector leading the charge in terms of new offerings. Just as every major toy and TV programmed has its own website, we expect them to have their own virtual world.

This, and the other growth drivers detailed in later sections, leads us to the conclusion that from 2010 onwards we will see a dramatic uplift in the total number of virtual worlds, resulting in close to 900 virtual worlds by 2012.

Virtual Worlds: 2010 and beyond KZero Worldswide

Virtual accounts

  • The 10-15 yrs old group is the dominating group
  • 367 M account users in Q3 2009 for this age group alone
  • 45% of all virtual account users

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