The New Avatar In Town

The New Avatar In Town

MARCH 26, 2007
Korea’s Nexon and others are edging onto Second Life’s turf, using simplified features

Cyndi Lester, 20, recalls her first meeting with future husband, Frank: "My avatar walked past his. He noticed me and typed: I like your hair." After their real-life wedding last year, Cyndi and Frank bought digital rings and staged a second, virtual-world wedding.

It all happened in
MapleStory—a fantastical online game where players hunt cartoon
monsters and communicate in text. For Lester, a Huntington (W.Va.)
homemaker who devotes three to six hours a day exploring this
two-dimensional universe, the allure of MapleStory is more about show
than shoot-’em-up. She spends up to $100 a month buying new clothes (at
9 cents to $7 apiece) and hairstyles ($5.70) for her digital double.

Suddenly it looks as if Second Life, that 3D virtual world that last
year became a favorite hangout for hard-core techies and trend-watching
corporations, has competition. A new crop of online multiplayer games
is coming, targeting a broader audience with simpler navigation and
customization than Second Life. These games also rule out lewd
behavior. The companies behind them have a novel way of making money,
selling digital goods such as avatars and their outfits. The games
themselves are free.

The mainstreaming of virtual worlds started, as so many consumer-tech
stories do, in the Far East. MapleStory, from Korean online game maker
Nexon Corp., has been a hit in Asia since 2003. The company’s U.S. arm
began marketing a North American version last September, riding the
virtual-world bandwagon after Second Life started grabbing headlines.
It now has more than 3 million North American players, joining a
further 50 million worldwide. Nexon is best known for KartRider, a
three-year-old online go-cart racing game that has been wildly popular
in South Korea. A U.S. version is due out later this year. In 2005,
Nexon had worldwide revenues of $230 million, 85% of it from virtual

Starting in the fall, Sony Corp. (SNE
) will offer PlayStation Home—a realistic 3D online world where players
can buy digital items such as T-shirts and Sony Brevia TVs—as a free
download for its PlayStation 3 videogame console. And Nintendo of
America is betting on the free, easy-to-design avatar feature of its
popular Wii console to attract older nongamers.

The rise of the avatars coincides with explosive growth for "massively
multiplayer" online games in general. The category, which includes
technically simple and nonviolent "casual" games as well as more
graphically complex shooter games, is expected to produce revenues of
$760 million this year in North America alone, and nearly triple that
in four years, says videogame researcher DFC Intelligence.

The new multiplayer games are tailored for nontechies. Simple images in
MapleStory and KartRider don’t require sophisticated graphics cards or
ultrafast Internet connections. Avatar details are a snap to customize
with drop-down menus for selecting things like "cutie hair" pigtails or
red rubber boots.

Nexon waited to court American players until "broadband reached
critical mass," says John H. Chi, Nexon America Inc.’s president and
CEO. But the company also needs to broaden its market. KartRider’s
popularity in Korea has been waning—as many as 100,000 Koreans log on
at a time today, vs. 200,000 in 2005.

Now the question is, will Americans spend real money in virtual worlds?
(Older games rake in subscriptions or down- load fees.) MapleStory "was
a litmus test to see if U.S. audiences would have spending patterns
similar to Korea," says Min Kim, Nexon America’s director of game
operations. To make it easy, Nexon Cash cards, which are used to buy
digital goods, are being sold at Target (TGT
) stores.

So far, so good: In February, North American players spent $1.6 million on 600,000 virtual products within MapleStory.

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