Kid e-Land
Disney's DGamer Enters the Crowded Virtual World

By Mike Musgrove
Washington Post Staff Writer
Friday, May 16, 2008

Disney is hoping that after kids check out the new "Chronicles of Narnia" movie this weekend, they'll want to go online and chat about it using game characters dressed in fashions from the movie's dreamworld.

This week, the entertainment company is launching a virtual play environment that kids can access through Nintendo DS devices and their computers. The software for the service, called DGamer, comes free on copies of a video game tied to the movie, "The Chronicles of Narnia: Prince Caspian."

As companies scramble to replicate the success of recent surprise hit sites such as Webkinz, where kids tend to the lives of stuffed animals, some industry watchers say DGamer is the latest entry in a category that is about to get crowded. As one venture capitalist put it, kid-oriented online worlds are "popping up like mushrooms everywhere."

There's no question kids are spending more time online. According to research firm eMarketer, 12 million kids between ages 3 and 17 will regularly access virtual worlds this year. The firm expects that figure to rise to 20 million by 2011.

"This is still experimental," said Debra Aho Williamson, an analyst at the firm. "From a business standpoint, companies like Disney are still trying to figure out how much time kids want to spend in virtual worlds."

Williamson said the list of companies entering the market is practically a who's who of kid entertainment. Nickelodeon launched a virtual world called Nicktropolis last year, and Mattel has launched one for its line of Barbie dolls. Online words from Lego and Time Warner's Cartoon Network, among others, are on the way.

It's difficult to forecast which of these online worlds will catch on, said Sharon Wienbar, managing director of Scale Venture Partners, a venture capital firm.

"Some get phenomenal traction, some don't," she said. "It's completely unpredictable."

Wienbar said this space drew a lot of investor interest after Disney bought Club Penguin in a deal worth $700 million last year. Club Penguin is a snowy virtual world where kids interact with one another and play games in the guise of penguins. It was designed by programmers in Canada and launched in 2005. At the time of the deal, the service counted 12 million users, including 700,000 who paid a subscriptions averaging $6 per month for access to in-game perks.

Ever since that deal, kids sites have seemingly been launched or announced on a regular basis, Wienbar said. It's similar to the wave of social-networking sites that debuted after the sale of MySpace to News Corp. for $580 million in 2005, she said.

DGamer isn't Disney's first virtual world aimed at the youth market. It has launched one themed around the "Pirates of the Caribbean" film series, and one inspired by the Disney-Pixar movie "Cars" is on the way.

Disney pitches DGamer as part virtual world, part social-networking site. "It's a little bit of everything we thought was appropriate to this trend," said Michelle Golding, the service's senior producer.

Golding said the company has strived to build a safe environment by giving parents control over how their children can use the service. At the most basic level, they can only message one another with preselected words and phrases. On higher levels, they are allowed more freedom, but there are filters for profanity.

Disney plans to include the virtual world's software with all of its upcoming games for the Nintendo DS. There are no subscription fees; the company sees DGamer as a way of building consumer loyalty among its young fans.

Chris Byrne, an independent toy industry analyst, said Disney doesn't mind that it will not directly draw revenue from the service. In a world where kids are offered many entertainment choices, anything that keeps their attention in one place longer than the competition is good for business.

"The strategy is, frankly, 'How much of a kid's leisure time can I own?' " he said. "It's such a crowded marketplace, that if can get a kid making an avatar based on Narnia, I have a better chance of keeping that kid in the franchise."

Some virtual worlds for children are even taking an educational approach.

Knowledge Adventure has an online world set to launch this summer. To access the fun parts of the online world, such as areas where kids can race against one another, users have to earn points on educational exercises. Parents will be able to tweak the types of assignments the online game world doles out; if a child is falling behind in math, for example, the game can dispense more math-related activities.

"Think of it as World of Warcraft for 3- to 10-year-olds," said David Lord, chief executive of the Torrance, Calif., company.

Michael H. Levine, executive director of the Joan Ganz Cooney Center, which studies how technology can be used to speed children's learning, seemed to like the idea.

Schools in the United States sometimes seem stuck in a "time warp" that ignores the digital revolution, he said. An offering like Knowledge Adventure's might be helpful as long as "the kid doesn't know that it's supposed to be educational."

In other words, he said, "The real trick is making sure it doesn't turn out to be a spinach sundae."

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