The most financially successful virtual worlds are not 3D and sophisticated, but flat and appealing to younger audiences.

Think Neopets, Webkinz, Club Penguin and Runescape, not Second Life.

Habbo, whose graphics are reminiscent of the Code Monkeys cartoon and 8-bit 80s video games, announced today that its 100-millionth avatar had been created.

That does not translate as 100m active members - the service had 10.3m unique visitors in May, according to comScore - but it is still an impressive indication of the growth of the service since its launch in Finland eight years ago.

Financial comparisons are difficult. Electronic Arts announced in April that it had sold 100m units of the The Sims, the video-game precursor to online virtual worlds. Blizzard Entertainment said in January it had passed 10m paying monthly subscribers for its World of Warcraft online game.

The companies do not break out the hard cash they make from these properties and neither does Sulake, the privately held Finnish company that owns Habbo and dropped the “Hotel” from Habbo Hotel in 2006.

However, it did reveal today it was “on track to reach our projected revenue goal of $85m, which indicates a healthy profit for the company” in 2008.

Teemu Huuhtanen, executive vice president of marketing, ad sales and business development, told me he thought Habbo was the largest independent virtual world, following Disney’s acquisition of Club Penguin for $700m last year, with its more than 20m users.

Monthly visitors are up 51 per cent on a year ago in Habbo’s 32 communities worldwide.

” I think the biggest reason for the growth is the redesign we did in October/November focusing on easy access and play, making sure that anyone without previous knowledge of virtual worlds could come to the web site and create their own character and start exploring,” he said.

Habbo has also partnered with movie studios and brands to help make the site more relevant to its teen target audience.

Around 85 per cent of revenues come from users paying for virtual items in the world, but advertising and sponsorship is expected to take a bigger share this year as the medium matures.

The maturity of its users does create a churn problem for Habbo. While Second Life may lose users because of the level of difficulty they face, Habbo members simply grow up and move on to more adult virtual worlds.

“Every year we need to reach the users in each market that turn 13, so it’s like a constant flow of new customers for us,” said Mr Huuhtanen.

June 26th, 2008 in Digital media, Games, Internet, Media | Permalink