Gamertell

Virtual worlds are luring a myriad of people hungry for living virtual lives that run parallel to their real lives. Virtual worlds are an industry by themselves with spectacular growth prospects, and many investors have already taken note. A prominent media firm, Virtual Worlds Management, which keeps track of the virtual worlds industry, has revealed that investors poured in $425 million into virtual worlds in the fourth quarter of 2007.

In Q4 2007, venture capitalists and media firms invested $375 million in 13 different virtual world companies, and there were two acquisitions that, when combined, were worth $50 million. The investments during Q4 2007 are a considerable improvement from the previous quarter, when around 23 companies raised $220 million. The majority of the investors were venture capital firms, with Sony and Time Warner being the only two media players. Both invested in Gaia Online. Providence Equity Partners emerged as the most benevolent investor with its $300 million investment in ZeniMax Media Inc.

The funding patterns show that virtual worlds like Gaia, Hidden City, Numedeon, and Star In Me, which target kids and teenagers, were very popular among the investors. Although the jury might still be out on whether virtual worlds are video games, six of the companies that bagged investor’s affection cater to both the virtual world and online games industries.

Read [Virtual Worlds Management]

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