Virtual Worlds Management posted an article about the amount of investment that has been going into virtual world companies.

Yes, I know that the $1 billion number is highly skewed by Disney’s purchase of Club Penguin. And yes, it is easy to dismiss virtual worlds as just hype, to say its dot-com all over again. These are perhaps true, but I feel, missing the point. The point is that when there is that much money being invested into an industry, it tends to drive innovation, and consequently, economic growth and opportunities.

Even if the entire industry came crashing down in a couple of years (which I’m hoping will not), it would have made a huge impact in those years. Some people will lose money, yes; but some will make it, and those that do will make A LOT more, and make a huge difference to the lives of others (imagine having to rummage through 10 different book stores to find a rare title instead of just searching for it on amazon). Technology doesn’t generally regress and the advancements made in those years will continue to benefit society long after the bubble bursts.

1 billion in investment is not a lot compared to most other industries. However, if we look at the numbers 2-3 years ago, they were probably much, much less. This increase in investment activity was spurred by the initial increase in market activity and will in turn increase market activity which will further drive more investment activity and so forth. A self-feeding cycle such as this usually results in tremendous and exponential market growth.

Well, I for one, am hoping that this is what will happen, not just because First Meta is dependent on the growth of virtual worlds, but also because I DO believe that virtual worlds will change the world. But, I’ll have to leave this to another discussion or we’ll never get done with this post. :p

What are your thoughts on this?