&t I met with Electric Sheep Company CEO Sibley Verbeck (pictured) after his keynote at the Virtual Worlds Conference here in San Jose. Verbeck pointed to early successes of virtual worlds among kids (Club Penguin, Whyville, HabboBarbie...).

“The kids virtual worlds market, so pre-teen, is really the first virtual worlds market that’s become mass market and successful from a business point of view”, he explained.

Those virtual communities business model are mostly based on subscriptions (e.g. $6/month for Club Penguin that was acquired last August by Disney for $350M) and/or linked to buying a "real" toy that, in exchange, gives the kid access to the virtual world. "And it's working", said Verbeck.
The ESC's founder also sees an uptake in popularity of virtual worlds for teens. Gaia Online is a popular one.

"But we're still looking for the killer application for adults virtual worlds. And right now it's limited to early adopters", Verbeck added.

According to Verbeck, there is currently little to see/do in a world like Second Life. But the advent of "vertical" virtual worlds like the one ESC is building with CBS and the creators of the CSI franchise might well shake up the virtual world market for adults.
Also, imagine when the kid and teen population reach adulthood... that's probably when you'll see a mass market adoption of virtual worlds... sort of Facebook meets Second Life meets Hollywood. Already today, the "Virtual Worlds" have about 100 million souls and that could well double by next year based on various analysts reports or predictions, like the one from K Zero (pictured).
Verbeck also sees virtual worlds as a powerful medium for advertising.

"Because it doesn't look like ads. It's more of an experience. It's the same business model but more effective than the banners, etc. So you'd think the Yahoo and Google of the "real" world will be all over virtual worlds? But actually, it's not the case. I don't see Yahoo and Google is playing with some avatars in their IM (instant messenger) but not much else. I guess because it's so different from what they are used to. Now it's all start-ups!"

On a seperate panel, Verbeck was very bullish in using virtual worlds to boost e-commerce:

"I’d love to do a retail project. I think virtual worlds are going to be more successful for consumer shopping than the Web, but there are a lot of things that need to be done".