[The following is an article I wrote for the September 2011 issue of Children’s Technology Review. If you’re interested in the new 360KID Q2 2011 virtual world report, you can purchase the full report, which includes an expanded Wizard101 interview, by emailing me at scott (at) 360KID (dot) com with “Virtual World Research Report” in the Subject line. The next quarterly report will be completed in late October, 2011.]

Being the number one virtual world for kids is no small thing, especially in these days of Disney, Nick and Cartoon Network. But what’s interesting about Wizard101 is that 60% of visitors are playing with another member of their family (at least, according to a recent Trinity University study). What’s are they doing right?

To find out, CTR correspondent Scott Traylor interviewed head wizards at KingsIsle: Josef Hall and Todd Coleman, on a quest for their magic formula. Note that portions of this interview have been condensed, and this interview is part of a larger report that is sold separately.

Where did the Wizard101 idea come from?

Josef Hall: We started talking about it seven years ago. I have three kids, they were young then, and I wanted them to have a safe and high-quality online game. Todd and I thought the children’s space really seemed underserved. We wanted to make something that was triple-A, super high-quality. Something we could feel comfortable with our kids and other kids playing.

Todd Coleman: Josef and I were founders of another game company that made hardcore fantasy games with violence and mature themes. We were interested in going in a different direction, a more lighthearted approach to gaming through storytelling.

So the founders of KingsIsle brought you on and charged you with developing a virtual world product for them?

Todd: The story goes back earlier than that. Elie Akilian, our CEO and primary investor had an idea to create a new kind of game company. He talked to a dozen or more game companies to find a partner. At the same time he was searching for a partner, Josef and I were out talking to big publishing houses about a new kind of game we wanted to create. What’s funny about both sides of that story, neither of us were finding traction. Elie found that game companies were mostly interested in making shooters or army games or post-apocalyptic games, hardcore games for hardcode players. When Josef and I were talking to studios, those were the same types of games they wanted to fund. We stumbled into Elie who looked at us, having come out of the hardcore game space, now pitching a wizard game for the family, and it became apparent we should join forces.

From the beginning the idea was to create a family-based wizarding world, even before KingsIsle was formed?

Todd: Yes, in fact if you go back and read the high concept document that Josef and I put together, it’s amazing how much of that original vision is exactly the same as what we created.

How long were you in development?

Josef: About two and a half years before we went into alpha with friends and family.

Todd: And another eight weeks before we went live.

Did the masses come right away?

Todd: It took time. It was about six months of steady growth, but we hadn’t yet hit the tipping point. That was in December 2008 when it started to pick up steam.

Josef: We did some national television advertising, then things really took off. We started growing quickly around that time, and we knew we had something special.

How has Wizard101 changed since you launched?

Josef: The game has stayed true to what it was when we launched, but we’ve added a lot of things, like a housing system and gardening. Everything has kind of the wizard slant. The gardening’s not a normal gardening system. You grow funny plants that have a lot of character and personality, like Couch Potatoes which are little spuds sitting on couches watching TV and talking to each other. It’s all very tongue-in-cheek. We’ve added a pet system where you can own pets and grow them through different in-game mini games. We’ve also added a lot of new worlds, some are pretty big departures from the existing world, like Celestia, which is underwater.

[CTR Editor’s note: Most of these are premium features, available only with a code that costs up to $39. That’s the magic of Wizard101’s business model.]

Have you learned anything surprising about your audience?

Todd: It’s a wider age spectrum than we expected. We started hearing grandparents were getting into the game, using it as a way to stay connected to their grandchildren. This was really surprising and just really cool to us. It’s something you can’t predict going in. You sit down, make the best game you can, and what you don’t really have control over is player behaviors. Players come into this empty world you crafted. They bring their own hopes and expectations and experiences and relationships. Then the world starts to take on a life of its own. It’s an amazing thing to watch.

How has the business of virtual worlds changed in the last few years?

Todd: Back when we started Wizard, the biggest game at the time was EverQuest, having amassed 400 thousand people. The prevailing thought in the industry at the time was any new virtual worlds to come out would simply carve up the same base of 400 thousand players. Then World of Warcraft launched and started racking up millions upon millions of players. All of a sudden people realized there was a new market. After that, the free-to-play model started in Asia. When it first came to the US, people thought that model would never fly, and of course that was not the case. Today you’re seeing these very casual games pop up on Facebook, and people who never considered themselves gamers, hundreds of millions of people, are now playing on a daily basis. Using those games as a way to connect with their friends.

What was your single biggest moment in the Wizard101 history?

Josef: One that jumps to mind was early on in development I came home and all the computers were taken over by my wife and kids. They were so deep into the game nobody noticed I came in the door. They were laughing and talking to each other, running around in the game. I knew at that moment we had built something that was a lot of fun for my family and would be fun for other families too. It was a wonderful moment.

Todd: My biggest moment was during development. I remember we had our first milestone, an internal test. We had created the art pieces and had engineering working on the code and a design group working on the players and the characters and pulling it all together. We fired it up, and Josef and I were able to jump in for the first time and play. It was that vision we had, taken from a “Wouldn’t it be cool?” conversation to actually seeing it on the screen. It was buggy, the sound wasn’t working, the cinematics were too long, the cameras weren’t working, but looking past all those warts and seeing it, at that moment I knew it was going to work. Josef and I were like, “Okay, we’ve got something here.” I think it was two in the morning. But that moment, you turn that corner and know you’ve gone from an idea to an actual game. Nothing beats that.

(Photo and images © KingsIsle Entertainment)

[The following is an article I wrote for the July 2011 issue of Children’s Technology Review. If you’re interested in learning more about my recent virtual world research, you can purchase an expanded report by emailing me at scott (at) 360KID (dot) com with “Virtual World Research Report” in the Subject line. My next quarterly report will be completed on July 20, 2011]

It’s been amazing to watch the virtual world (VW) space grow by leaps and bounds over such a short time. Using unique user traffic as a yardstick, the virtual world and massively multiplayer online (MMO) space increased more than 50% last year. Compare that with 15% for the prior year (in the US). The first thing to note is that traffic patterns seem to follow a seasonal rise and fall. Traffic increases from spring to early summer only to drop significantly when school starts in September. Then, as the holiday season approaches, it peaks before dropping off again in the new year.

WHAT’S HOT? The most popular destinations for both kids and adults are “casual gaming” destinations. For kids and tweens, that means Wizard 101, Poptropica, Club Penguin and Moshi Monsters (which was just valued at $200 million). While social and chat-based destinations like IMVU and Hi5 fall in second place for the young adult and older crowd, destinations that have a toy tie-in or real world connection, like Webkinz and Build-A-Bearville hold second place for kids and tweens. However, this VW/MMO type has been on a slow two-year decline, largely as a result of Webkinz loosing significant marketshare over that period, to newcomers like Wizard 101 and Poptropica. While Club Penguin has dropped in placement on the best top 10 list for kids, it has done a surprisingly good job of maintaining marketshare, loosing only a small percentage compared to Webkinz.

Two destinations have really taken off. Minecraft, a “better than LEGO Universe” online building (or “crafting”) world that appeals to both boys and girls is growing at an amazing rate globally. The funny thing about Minecraft is that it is still in public Beta! It’s not even a fully released product yet. (Note to execs, learn from this product’s creative expression thinking AND business model!) If you are not yet familiar with this low res, yesteryear looking world, tonight’s homework is to get familiar with it, NOW. Educators should note that teachers are beginning to create lesson plans around Minecraft’s in-world building activities. The second destination of note is Nickelodeon’s latest virtual world offering, Monkey Quest. This new 3D world is also growing quickly since its launch earlier this year and you can’t miss the advertising on Nickelodeon cable channels throughout the day. It’s a world that spent more than a couple of years in development and the polish shows now that it’s ready for prime time.

As we head into the summer months, the kids VW/MMO industry typically assumes that as the dog days of summer drag on, kids will become bored and start to gravitate to virtual world activities from the indoor comfort of an air conditioned room. If you watch any amount of children’s commercial television during the summer you can’t help notice the number of virtual world advertisements. However, while it is unclear if subscription rates actually rise during the summer months, unique traffic to kids VW/MMOs actually falls through July and August, especially in the casual gaming sector and in the toy and web connect space, an interesting trend that goes against popular belief.

What about education-based destinations? You might imagine these kind of sites have some appeal with younger audiences and kids, right? While the casual gaming space has captured almost 34% of all VW/MMO traffic, educational destinations hold less than 6% for all ages, and only 4.4% of all traffic for the top 20 kid and tween educational destinations. Out of this list, a majority share of traffic goes to Knowledge Adventure’s JumpStart and their new and fast growing world Math Blaster. Almost all other destinations show small numbers in comparison.

As I look back on the virtual world and MMO data I have collected over the past five years one thing is certain; expect to see many more virtual worlds launching in the months and years ahead. I remember a few years ago hearing one day there will be over 300 virtual worlds globally. I remember thinking “that’s impossible, we will never have that many.” Well, that day has recently come and gone. I continue to add another ten destinations to my list every month. Adding more new worlds to the existing list of players will create challenges for everyone in this field, pushing all players to continually improve, build out, and try to hold onto market share. Ultimately it will be the children and their parents that will benefit. Each new world that launches raises the bar for quality, engagement, innovation and ultimately, access. That’s the good for kids, but it presents an ongoing challenge for publishers who choose to play in the virtual space.

Start your engines! Disney’s newest virtual world, World of Cars, is at the starting gate! World of Cars recently went live and is the latest online community for kids. The LA Times posted a great interview with Rachel DiPaola (shown in photo above) who is the Product Director for Disney Online and commander in chief for Cars Online. Reading the piece reminded me that just a few months earlier I had a conversation with Lane Merrifield (also in photo above) about Cars. Merrifield, founder of Club Penguin, now oversees all virtual worlds for Disney. Below are highlights from our conversation together as he discusses the thinking behind Cars Online. This interview was conducted in the Spring of 2010 and has been edited for clarity purposes.

QUICK QUESTION PICKER:

In our last interview together, Club Penguin had just been acquired by Disney. Today you’re in charge of all virtual worlds for Disney. How many virtual worlds are you managing?

You were made the Executive Vice President of Disney Online Studio. Where do you start with this role?

What makes World of Cars unique compared to other virtual worlds?

What 3D solution are you using for Cars, Unity?

Was John Lasseter involved with this project?

In addition to Cars Online, what else can Cars fans look forward to in the near future?

INTERVIEW:

Scott Traylor: In our last interview together, Club Penguin had just been acquired by Disney in August of 2007. Today you’re in charge of all virtual worlds for Disney. How many virtual worlds are you currently managing?

Lane Merrifield: We have four actively launched virtual worlds. ToonTown was the first, Pirates of the Caribbean Online, Pixie Hollow, Club Penguin, and soon to be World of Cars. That’s four live currently with a fifth virtual world actively being worked on. It’s a lot of worlds to manage, but we have really strong teams who own the product, who are passionate about it, and passionate about their audience. For me, I’m less inclined to feel like I have to manage the worlds themselves, and more inclined to make sure that the values are lined up, the priorities are right, the expectations on quality are consistent. (Return to Question Picker)

Traylor: You’re under Disney’s wing now, which was nothing unfamiliar to you since you first worked in the parks at Disney as a teenager. You’re brought on as the Executive Vice President of Disney Online. Where do you start with this role? Do you focus on business models for these virtual worlds? Do you coordinate branding? Do you modify these virtual worlds to meet the business objectives of Disney Online or maybe the entire Disney enterprise?

Merrifield: When I first came onboard, almost all of these worlds, with the exception of Cars, had already been launched. So all of them had a nature. They were all in different parts of their life cycle. Some were struggling a little more than others. Pirates, which had great content, was not technically functioning as well as it could. It wasn’t working well on all machines. The team had reached pretty far with what they could do technically, but as a result, had made the site less accessible. For Pirates, we put a halt on a lot of new development, went back to the drawing board, and retooled to get it to a place where it is now. Recently we started to move the content ahead again, and the experience is far more accessible. You can play it in a browser now. Anyway, these virtual worlds are all on different paths, and a lot of my focus has been stepping in, bring the two studios together (the Club Penguin studio in Kelowna, now called Disneyland Studios Canada, together with the Disneyland Studios LA, ) and bring together a lot of shared learning.

It’s interesting, the two studios are almost identical in size, although one was focused on just one product and the numerous facets of that product, and the other was focused on multiple products. One studio wasn’t involved with as many languages. The other wasn’t as tied into their consumer products and other things. One was driving very deep, and the other was focused on all the pieces. Internationally, Club Penguin was really leading the way, and now the infrastructure that we developed for Club Penguin is going to allow all of our virtual worlds to be able to grow internationally in the same way that Club Penguin did. The sharing between the two studios has been a great cross learning experience. (Return to Question Picker)

Traylor: What makes World of Cars unique compared to other virtual worlds that compete in the same space?

Merrifield: Well the most obvious is that it starts from such a strong place in terms of its intellectual property. People know the product, people know the characters, they know what Radiator Springs should look like and feel like, although they haven’t necessarily experienced it like this before. There’s great strength in that, but it’s also a double-edged sword. It means people’s expectations are going to be higher. We already had a head start in the narrative, and in the environment and the characters. I don’t like to focus on the technology, but we’ve also created a way of doing 3D in Flash that’s pretty unique and different from Papervision and some of the other technologies out there. (Return to Question Picker)

Traylor: The front-end is in 3D using Flash? You’re not using Unity?

Merrifield: We’re using Flash, at least until some of these other tools get to the same adoption rate. Our goal is never to try and perpetuate the technology. We’d rather come in behind it once it’s already reached a significant adoption level. This is not to say we’re not looking at all of these other new tools, playing with all of them. Just the same, we’re not locked into Flash either.

We always talk about being technologically agnostic. That’s a big focus for us. It’s difficult to bring a Pixar 3D movie to life in 2D. Not to say we didn’t experiment with it, but it just wasn’t the same thing. The character of the cars, and the ability to bring them to life, and the way they are articulated, we knew we had to address that problem. And yet, the requirement was always not to chase technology. If we’re going to do it in 3D, it has to have a 98 percent install base, which is what Flash has. It was a tough challenge, but the team rose to it. In part, it’s also why we’re making sure everything will work right for the launch. This is a technology approach that hasn’t been done before. We need to make sure when there are 60 cars driving around on the same page at the same time, that it’s still as strong an experience as if there were just two cars driving on screen. (Return to Question Picker)

Traylor: Was John Lasseter involved with this project?

Merrifield: Yeah, John’s been pretty involved. He would do check in meetings throughout. He also has the dedicated gurus of Cars at Pixar who are involved in work on Cars II and the Cars Land Experience. The relationship has not been like a licensing situation where we say “Okay, can you tell us everything about Cars, and we’ll go make it.” It’s been a real collaboration. In fact, there are elements of what we’ve created that are being incorporated into the Cars manual, the Cars bible. Some point down the road, it could be incorporated into future movies or theme parks or whatever else. It’s neat to see this. It’s a collaborative effort, more than it is one way. John’s been a big fan, and he’s very interested in this because it presents a new medium for storytelling. (Return to Question Picker)

Traylor: What you have shared with me so far is that there’s a new Cars Virtual World, a new physical world theme park called Cars Land, you’re also talking about the next Cars movie. I’m seeing a “tent pole” approach with the Cars brand that has many different elements circling around that center pole. Fans of the Cars franchise are soon to see much more than just the Cars virtual world, is that correct?

Merrifield: There is a lot of cool stuff coming out. The neat thing about everything you mention is that the center pole IS the story and IS the narrative. People sometimes say, “The virtual world is the connection point.” The Internet may be the connection, the vehicle, and Cars Online will be a browser experience. However, as devices get more and more connected and smarter, as we connect more with mobile, as we connect more with console games, as we connect more with the physical environment, my hope is that this next evolution of engaging with the Cars franchise will be more about this connected experience. Disney has been making similar connections from a franchise perspective for years. It’s not just about the replayability of these various experiences. It’s really about one continuous story across multiple experiences. (Return to Question Picker)

In mid-February, the annual New York Toy Fair held their conference at the same time as the virtual world conference called Engage Expo. Both industries compete for kids’ interest and at times, even collaborate in engaging them through both online and offline play. The two conferences offered a rare opportunity to hear how both industries are thinking about engaging kids through digital play.

At the end of both of these events, a number of industry experts gathered together to discuss key trends with kids, technology, virtual worlds, and play. What were some of the key findings for 2010? Less virtual world announcements. Deeper virtual world experiences. Less technology toy announcements. Lower price points across all products. Less “watch me” toys. More touch screens for tech products that were screen-based. The desire by kids to stop being “micro-paymented” to death.

These and other trends can be heard in the video recording of this group get-together offered below. Also included in the video are photos of new products announced at the show that you will see rolled out later in 2010.

For those who would like to simply cut to the chase, I’ve also included a look up table below to find the location within this video where the group talks about specific products you’re interested in. After you’re done viewing, share your thoughts about what key trends you see in the world of digital play. Enjoy!

If you’re attending a conference on forward thinking ways to help kids learn, or maybe an event on learning through video games, chances are you will be listening to thoughts offered by James Paul Gee. Dr. Gee is a noted expert on the topic of video games and learning. He is the Mary Lou Fulton Presidential Professor of Literacy Studies at Arizona State University and is a member of the National Academy of Education. His work has been published widely in journals in linguistics, psychology, the social sciences and education. Dr. Gee’s recent book, What Video Games Have to Teach Us About Learning and Literacy argues that good video games are designed to enhance learning through effective learning principles supported by research in the Learning Sciences. His new book, Women and Gaming: The Sims and 21st Century Learning, written with Elisabeth R Hayes, will be available this coming May, 2010. At the recent Breakthrough Learning in a Digital Age conference held at the Google headquarters, I had the opportunity to speak with James. You can view a short video of my interview with Dr. Gee on the Cooney Center YouTube channel or read the complete interview below. Portions of this interview were edited for clarity:

QUICK QUESTION PICKER:

What successes do you see in the learning games movement?

Why do you think games are not perceived as effective learning tools?

Would a funding approach that is similar to public television be a good model for the learning games industry?

What excites you when you see kids developing their own games?

How are learning games best used to accelerate learning?

INTERVIEW:

Scott Traylor: Where do you think things stand today with the learning games movement? What successes do you see?

James Paul Gee: Successes have been slow in coming, much more slowly than I would have thought, but they are coming. What I’m seeing is the beginning of noncommercial games for learning.

Looking back on the gaming industry, developers made products that were expectable, products that were designed by baby boomers and made by principles of instructional technology. These games didn’t break the mold, and didn’t break out of a pattern. They were not good games and did not include good learning. Today we’re beginning to see games being developed by young game designers who understand learning and understand game design. They’re making good games, and they are making things that work. Over the next few years we’re going to see a real explosion in better products. Some of this has to do with the appearance of the independent game studios. In the commercial world the independent games community has been very slow to develop. For a while there really was none, but now with downloading services across all major platforms, you’re seeing many independent games being developed. Games like Flower and Braid, made with relatively small budgets, but they are really top games. Independent games like these are doing as well as many of the commercial games out on the market, and they’re setting the standard for so called “serious games, ” games that have the ability to teach. If we can make commercial games that are as good as Flower or Braid for a modest budget, we certainly can make games in the learning sphere that are equally as good. (Return to Question Picker)

Traylor: Why do you think games are not perceived as effective learning tools?

Gee: I think the major reasons are cultural, along with the slow development of an independent game industry, but also the power of baby boomers. People of my age, baby boomers, have theories and are in relatively solid positions in institutions. They get to call the shots, but this is a changed world. We’re talking about learning and using technologies that people under thirty know a lot more about. It’s not surprising when they apply our theories and do a better job than when we applied our theories. I think that’s all good, we need to release that creative energy.

The other thing you touch on, and it’s a very serious matter, is that we really don’t have many new business models. Think about it. We’re trying to make things that do social good, but if the social good is done for free, it dies when the grant ends. Right? We now realize we have to think about how to make products that can go on for a long period of time, and at some level earn enough money to sustain themselves while still doing social good. Lots of people are now thinking about how we can create new and innovative business models so that everybody wins. Models that allow people to make enough money and at the same time spur new businesses, new enterprises to open up, models which will help everybody benefit. Until we really get that down, what you’ll end up seeing are products that are made on government dollars that die the day the grant is over. The same is true with academic research, the day the grant money stops coming in the research stops. (Return to Question Picker)

Traylor: Would you suggest a financial approach that is similar to public television? Would that be a good model for growing a learning games industry?

Gee: There’s going be a whole new set of models. Open source, the public sharing of programming resources, is one very important area. A public television model around games that would include both design workshops as well as giving out products, and also encouraging consumers to make products, would certainly be one model. We just have to have new models for new businesses. There are going to be “double bottom line” businesses; businesses that are committed to social good by solving our educational problems but these same businesses would be committed to making money. Making money not just to enrich individuals, but to also keep the social good going. There are a number of models we can think of for that. As is true of many academics, we didn’t think that business models were important. Now people are starting to see that business models are needed to bring about long-term impact. (Return to Question Picker)

Traylor: What excites you when you see kids developing their own games?

Gee: I’m excited that so many young people today are taking gaming beyond gaming. They’re not just playing games. They’re making games. They’re designing things for games. They’re setting up discussions and guilds and websites around games. They’re learning new software, software that contributes to these sites and discussions and products. And very often, they organize themselves into learning communities to do all of this. Their passion for learning in these communities grows beyond their passion for the games themselves. In other words, it’s a trajectory towards learning communities, and towards thinking like a designer, and producing, and not just consuming, that some of our best games give rise to.

The video game Spore is a great example. Spore is designed so that you play, and then you design, and then you play, and you join a community, and you get the products you have designed to appear within the game, and then you design with others collaboratively. This game provides very good tools to do that. Anyone, from the very young to the very old, can play.

Another great example is the game Little Big Planet. There’s a whole bunch of products coming out that say why don’t you see playing and designing as things you can do together in a game. These things are integrated together, so the game becomes as much your product as it is ours, and becomes a community event and not just an individual event. The lessons here for education are massive, because it means we’re going have to start designing, not just pieces of software, but ways for people to set up learning communities that they’re productive within. (Return to Question Picker)

Traylor: So the perception that learning games alone will result in really good learning outcomes, is not the full story. What you’re saying is that learning games, supported by learning communities, are really the combination that accelerates the learning opportunity?

Gee: Those of us who study learning games make the distinction between a game, which is just the software, and the game with a capital “G”, which is the whole set of social learning interactions built around the game. We used to argue, if you’re going to use games for learning, you have to have a community of learning built around the game. Now the commercial industry realizes you won’t make money if you don’t build a learning community around the game. It’s an integral part to gaming, to participate in a collaborative community around the game.

My work has never been that of an advocate to put games into schools. That’s a fine thing to do, but that’s not what my work is about. It’s about putting the learning found in games into schools, learning that’s centered on problem solving and collaboration.

In school students get a bunch of facts and information. You can’t solve problems with it, so you get nothing. The interesting thing is if I make you solve a problem, and I really design the experience of that problem, guiding you and mentoring you, which is what good game design does, you get problem solving and you get facts and information, because you have to learn that in order to solve the problem. I will also get you to collaborate in a community where you might even innovate. You’re going to design new things and do new stuff. I want to see that model go into schools and that model doesn’t have to be a game. We can do that in the world in many different ways.

The other thing I really want to stress about games is that, in my opinion, it’s not a good idea to try to teach a whole curriculum through games. Industries are building up to try to do this. It’s too expensive. We want to learn in many different ways. Games are particularly good for preparation for future learning. If you want to motivate somebody in an area like chemistry or physics, a game is an ideal way to not only motivate that learning, to get learners to see why you do it, what is good about it, why it would be a turn on to do it, but it also prepares them to get ready for learning in the future. That future learning doesn’t have to occur in games. We tend to get obsessed with one platform, but just like in the world where kids don’t just game, they also go on the internet, and they write fiction, and they mod games. They do a whole bunch of stuff. We want our curriculum to be a whole bunch of stuff as well. (Return to Question Picker)