As businesses compete in the real world, they also compete in virtual worlds. As there has been an increase in the buying and selling of products online (e-commerce) this twinned with the rise in the popularity of the internet, has forced businesses to adjust to accommodate the new market.
Many companies and organizations now incorporate virtual worlds as a new form of advertising. There are many advantages to using these methods of commercialization. An example of this would be Apple creating an online store within “Second Life”. This allows the users to browse the latest and innovative products. You cannot actually purchase a product but having these “virtual stores” is a way of accessing a different clientele and customer demographic. The use of advertising within "virtual worlds" is a relatively new idea. This is because Virtual Worlds is a relatively new technology. Before companies would use an advertising company to promote their products. With the introduction of the prospect of commercial success within a Virtual World, companies can reduce cost and time constraints by keeping this "in-house". An obvious advantage is that it will reduce any costs and restrictions that could come into play in the real world.
Using virtual worlds gives companies the opportunity to gauge customer reaction and receive feedback. Feedback can be crucial to the development of a project as it will inform the creators exactly what users want.
Using virtual worlds as a tool allows companies to test user reaction and give them feedback on products. This can be crucial as it will give the companies an insight as to what the market and customers want from new products, which can give them a competitive edge. Competitive edge is crucial in the ruthless world that is today's business.
Another use of virtual worlds in business is where you can create a gathering place. Many businesses can now be involved in business-to-business commercial activity and will create a specific area within a virtual world to carry out their business. Within this space all relevant information can be held. This can be useful for a variety of reasons. You can conduct business with companies on the other side of the world, so there are no geographical limitations, it can increase company productivity. Knowing that there is an area where help is on hand can aid the employees. Sun Microsystems have created an island in second life dedicated for the sole use of their employees. This is a place where people can go and seek help, exchange new ideas or to advertise a new product.
According to trade media company Virtual Worlds Management, commercial investments in the "virtual worlds" sector were in excess of USD 425 million in Q4 2007, and totaled USD 184 million in Q1 2008. However, the selection process for defining a "virtual worlds" company in this context has been challenged by one industry blog.