$1 Billion Invested in 35 Virtual-World Companies in Past 12 Months

October 8, 2007

This article is included in these additional categories:

B2B | Financial Services | Media & Entertainment | Retail & E-Commerce | Videogames

Venture capital, technology and media firms have invested more than $1 billion dollars in 35 virtual worlds companies from October 2006 to October 2007, according to Virtual Worlds Management, which tracks the industry (via BtoB Online).

Investment spanned the entire virtual worlds value chain, including technology platform companies, virtual worlds developers, service providers and tools providers; and business models of the companies raising capital vary, ranging from advertising and subscriptions to virtual item sales, to enterprise software licensing, hosting and services, Virtual Worlds Management said.

Overview of findings:

  • Of the $1 billion, a single transaction accounted for some 70% of deal value: Walt Disney’s $700 million acquisition of Club Penguin.
  • Intel’s $110 million acquisition of 3D virtual worlds graphics technology company Havok accounted for some 11% of deal value.
  • The remaining $196.8 million was invested in 33 companies.
  • Significant investors in the space include Redpoint Ventures, Charles River Ventures, Intel, and Rustic Canyon Partners.
  • Media companies making sizable investments include Disney, CBS, Time Warner, and GE/NBC Universal’s Peacock Equity Fund.

Virtual Worlds Companies Funded from October 2006 to October 2007:

 virtual-worlds-management-virtual-world-funding-oct-06-to-oct-07.jpg

“The amount of money invested in this period of time is staggering… [and] we don’t see any slowing in the market adoption of virtual worlds technologies and expect investment in the space to continue,” said Christopher Sherman, executive director of Virtual Worlds Management.

“In fact the market is growing significantly, with the rate of adoption of virtual worlds increasing as the technology matures and has more to offer both consumers and enterprise customers.”

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