Virtual economy booms to $5bn and rising

Interesting post over at forbes.com that the $5bn global virtual (items/goods) economy is booming, although the journalist does mention that 80% of it remains rooted in East Asia (Japan, SKorea, China). I would say most of the mobile virtual economy would be firmly locked into the Japan-SKorea zone, considering their love of everything mobile, everything online and everything virtual/gaming.

There is a reason why the virtual economy is locked up in East Asia: imagine a world where your average joe has 100Mbps internet at home since 2005 and within 6 months will have 100Mbps internet on their mobile phone... now stop dreaming. That place is 10 hours flight time away from London, and it's called Japan.

Cue futuristic Denno Coil anime scene with 200 metatags virtual baubles being traded by primary school kids in the backstreets of an LBS-drenched near-future Tokyo? Yes, but people have been living in this virtual economy via online games for quite some time now.

Note the case of one high-ranking female player in the MMORPG World Of Warcraft game who offered sex in return for virtual money to buy a much coveted item in the game. She assembled real-life photos of the contenders, background-checked their characters in the game, demurred and chose the winner for her favours, and demanded the money upfront. The result was that the next day (!!) the player got her virtual money, another player got the sex. And that was April 2007 (2.5 years ago) and the blurring of real and online boundaries is only accelerating... more on the story here.

Paid-for LBS mobile concierge service nets $20m/yr

It seems NTT Docomo, Japan's largest mobile phone operator, has cracked the nut of successful money-making mobile location-based services. Their recent location-based mobile concierge service "iconcier" has garnered in excess of 1.8m paying subscribers since its introduction last autumn, each paying a minimum of 105yen (ie. $1) a month. A simple calculation gives us $1.8m*12=$20m/yr with the current installed base alone. Does this signal a resurgence of interest in location-based services?

Although many imagine Japan as the natural birthplace of location-based mobile services (along with South Korea), we must remember that the dominant local-search-cum-public-transport-search application in Japan, Navitime, has been around for 9 years now and only just hit the 4m paid subscribers mark 2 weeks ago. Adjusting Navitime's subscribers for the importance of NTT Docomo in the Japanese mobile handset market (50%), the iConcier Docomo-only service is set to cruise past the efforts of 9 long years within the next month or two.

Is it the passive nature of the flash screensaver that streams local data based on where you are which is the killer feature? Introduced in 2005, Docomo's underlying iChannel infrastructure, using Adobe's FlashCast platform, allows feeds to be streamed into the flash screensaver from predefined external sources or from Docomo's news databanks. The iConcier takes things a step further by building on the open Japanese location APIs that allow any mobile phone to find its location from the network, and feed+location+flash=localised realtime feeds. The application is easy-to-customise, and can draw in basic info like traffic jams, subway delays, to local supermarket sales, local weather warnings and various coupons. Everything is buy-in, so potential spam becomes personalisation. I don't know how regular the updates are, but it's a slowly rolling text update, not a page of spam ads.

I guess this shows the rise of what I call "non-map LBS". There doesn't need to be a map there to convey location-based information. In some cases it's helpful, in others, I don't want to have to search a map, I want the information to come to me in the form of a simple buy-in streamed feed or in the form of a simple text sms. Wonder who will try to do this outside Japan, if indeed it was noticed at all...