Could the future for business be virtual?

Apr 16 2008 by Nic Paton Print This Article

Virtual and computer-generated worlds are set to revolutionise how people, and businesses, interact.

A study by consultancy Deloitte, "Breathing a second life into synthetic worlds", has concluded that such worlds, often dismissed as the preserve of geeks and teenage boys, are in fact growing in popularity yet their potential has not been grasped by most businesses.

Such virtual worlds have created a new way for people to socialise, entertain, innovate and transact business, it has argued.

And, as they become more popular and use increasingly sophisticated technology, they could potentially have a significant impact, particularly in the way they change personal and business interactions.

But entering such worlds can be a daunting reality for many companies, as their traditional inward-focused business models will not have long-term sustainability in these brave new virtual worlds, argued Deloitte.

Yet such self-organised online communities potentially present lucrative opportunities as they offer a new route to market, one that traditional business models are unable to embrace, said report author Kamales Lardi.

"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," she added.

Few companies understood, for example, how to assess or measure the potential of virtual worlds.

Many had tried to established a presence with much media fanfare, only to then quickly abandon it.

Their failure had cast doubt over the potential business value of virtual worlds, she pointed out.

Yet, within the next five years, synthetic worlds would begin to dominate and drive brand building in major companies, she predicted.

That would give a competitive edge to enterprises that had already established a presence in these interactive environments.

There were brand and reputational risks, similar to those found in the online environment, which businesses faced when entering virtual worlds, Lardi argued.

In fact, parallels could be drawn with the dotcom boom of the late nineties, where many companies failed to differentiate themselves or correctly tailor themselves to what was then a new market.

"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," she argued.

In order to develop a strategy specifically suited to consumers of this new environment, companies must first understand the virtual market and its users," concluded Lardi.