1. 1 Higher education in Virtual Worlds- Industry and Competitor Analysis in Europe/USGroup 3aFebruary 7, 2011 1

3. Case Study VWET

4. Industry Analysis

5. Conclusions, thoughts and recommendations

6. References2

8. The bargaining power of buyers (universities, governments, organizations) is medium but are expected to decrease due to external trends.

9. The bargaining power of suppliers (3D VW’s, open source frameworks) is low but are expected to increase due to technological advances in the near future.

10. The threat of substitutes (2D platforms, e-learning) is high but are expected to decrease due to higher acceptance of the use of 3D virtual platforms and consumer requirements.

11. The barriers to entry (relationships, know-how) are at the moment medium and are expected to decrease because of better integration and availability of technology.

12. The key success factors for the industry are: good use of mobile internet devices, Relevant contacts/ networking and on long term, develop a strategic focus.

13. Future predictions point towards learning, social interaction and entertainment will become integrated; growing share of user-generated content and self-created platforms; freemium models

15. Higher Education in Virtual World’s can be divided into two main strategies based on the platforms:Non-specialized Specialized Virtual Worlds with optional eLearning possibilities Virtual Worlds that have eLearning as their single purpose e.g. Second Life e.g. OLIVE Sponsor interviews 4

17. Active Worlds

18. OLIVE

19. Universities

20. Governments

21. Organizations

22. ReactionGrid

23. 3rd Rock

24. VWET

25. Students

27. Croquet Consortium“Support-centered companies focused on helping universities, organizations and other institutions for educational and business usage of virtual 3D environments” Warburtson, S, 2009; OpenSim Grids; 3D Virtual Worlds List

29. Use SL as one of their environments

30. Designed own platform as well, making them a VR provider

31. Currently support some of the most forward thinking institutions in SL

32. Biggest competitive advantage: “Clients are still acquired face-to-face, not only virtually”

33. Committed to providing the highest quality environment and support for educators working to provide educators with a viable option to current platforms“ESMG/VWET offers the kind of service and support that makes the transition from real life to virtual life almost effortless” Sponsor interviews, http://www.virtualworlded.com/

35. Organizations

37. Open source frameworksBargaining Power of Supplier (-) High ability by industry buyers to do backward vertical integration (create own platforms) (-) Supplied products (platforms) are undifferentiated (-) Many suppliers LOW Sponsor interviews, Porter (2008) 7

40. Knowledge/ know how (-) Low capital requirements (+) High switching cost for buyers (-) Low product differentiation (-) No legal/regulatory Barriers (+) A few companies have a first mover advantage likely to change Sponsor interviews, Porter (2008) 8

41. 9 Industry Analysis – Porter’s Five Forces Rivalry (+) Equally balanced competitors (-) High industry growth (-) Low fixed costs low exit barrier (-) Possibility of strategic differentiation in strategy (-) High profit potential LOW :Sponsor interviews, Porter (2008) 9

43. Social media integration

47. Central decision on R&D and harmonizationPolitical Internet sources: ”STEEP” 10

48. 11 Industry Analysis – Overview 11 Sponsor interviews, Internet sources; STEEP

50. Ease of use

51. Adaptability

52. Proximity to IRL relationships to peers, teachers etc.

53. Technical functionality

54. Training of/ communication with buyers

56. Good use of mobile internet devices

57. Relevant contacts/ networking

58. On LT, develop a strategic focusSponsor interviews, http://www.pjb.co.uk/npl/bp34.htm 12

60. Growing share of user-generated content and platforms where educators can build their own environment

61. Freemium models/ larger proportion of free material http://www.googleartproject.com, Sponsor interviews

63. While the threat of substitutes is high, the bargaining power of buyers and the barriers to entry can be categorized as medium

64. Rivalry within the industry and the bargaining power of suppliers (VW platforms) on the other hand, appear to be relatively low indicating potential for companies involved

65. This is supported by the STEEP analysis which reveals support amongst all factors (e.g. future technological developments and social acceptance of VW:s)

66. Therefore it can be concluded that Higher Education in Virtual Worlds will play an important role in future learning and – as an industry – offers opportunities of profitability14

67. 15 Sources Warburtson, S; Second Life in higher education: Assessing the potential for and the barriers to deploying virtual worlds in learning and teaching, British Journal of Educational Technology, Vol 40 No 3, 2009 Interview John Fennessy, 2011-01-31 Interview Jeroen van Veen, 2011-01-28 Interview Steve Mahaley, 2011-02-04 Interview Erik Wallin, 2011-02-02 http://www.virtualworlded.com OpenSimGrids, http://arianeb.wordpress.com/2010/04/11/open-sim-grids/, 2011-02-05 3D Virtual Worlds List, http://arianeb.com/more3Dworlds.htm, 2011-02-05 http://www.pjb.co.uk/npl/bp34.htm Porter, M.E., “The Five Competitive Forces that Shape Competitive Strategy”, HBR, 2008. STEEP http://www.pjb.co.uk/npl/bp34.htm2011-02-05 http://www.budde.com.au/Research/European-Telecommunications-Infrastructure-and-NGNs.html2011-02-05 http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-10-050/EN/KS-QA-10-050-EN.PDF2011-02-05 http://www.reuters.com/article/2009/08/31/us-europe-mobile-idUSTRE57U1IQ200908312011-02-05 http://www.eua.be/fileadmin/user_upload/files/Newsletter_new/economic_crisis_19052010_FINAL.pdf2011-02-05 http://ec.europa.eu/public_opinion/archives/ebs/ebs_313_en.pdf2011-02-05 http://ec.europa.eu/public_opinion/archives/ebs/ebs_313_en.pdf2011-02-05 http://www.siliconrepublic.com/innovation/item/17956-eu-makes-massive-780m-inve2011-02-05 15