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The New Avatar In Town

Cyndi Lester, 20, recalls her first meeting with future husband, Frank: "My avatar walked past his. He noticed me and typed: I like your hair." After their real-life wedding last year, Cyndi and Frank bought digital rings and staged a second, virtual-world wedding.

It all happened in MapleStory—a fantastical online game where players hunt cartoon monsters and communicate in text. For Lester, a Huntington (W.Va.) homemaker who devotes three to six hours a day exploring this two-dimensional universe, the allure of MapleStory is more about show than shoot-'em-up. She spends up to $100 a month buying new clothes (at 9 cents to $7 apiece) and hairstyles ($5.70) for her digital double.

Suddenly it looks as if Second Life, that 3D virtual world that last year became a favorite hangout for hard-core techies and trend-watching corporations, has competition. A new crop of online multiplayer games is coming, targeting a broader audience with simpler navigation and customization than Second Life. These games also rule out lewd behavior. The companies behind them have a novel way of making money, selling digital goods such as avatars and their outfits. The games themselves are free.

The mainstreaming of virtual worlds started, as so many consumer-tech stories do, in the Far East. MapleStory, from Korean online game maker Nexon Corp., has been a hit in Asia since 2003. The company's U.S. arm began marketing a North American version last September, riding the virtual-world bandwagon after Second Life started grabbing headlines. It now has more than 3 million North American players, joining a further 50 million worldwide. Nexon is best known for KartRider, a three-year-old online go-cart racing game that has been wildly popular in South Korea. A U.S. version is due out later this year. In 2005, Nexon had worldwide revenues of $230 million, 85% of it from virtual items.

Starting in the fall, Sony Corp. (SNE) will offer PlayStation Home—a realistic 3D online world where players can buy digital items such as T-shirts and Sony Brevia TVs—as a free download for its PlayStation 3 videogame console. And Nintendo of America is betting on the free, easy-to-design avatar feature of its popular Wii console to attract older nongamers.

The rise of the avatars coincides with explosive growth for "massively multiplayer" online games in general. The category, which includes technically simple and nonviolent "casual" games as well as more graphically complex shooter games, is expected to produce revenues of $760 million this year in North America alone, and nearly triple that in four years, says videogame researcher DFC Intelligence.


The new multiplayer games are tailored for nontechies. Simple images in MapleStory and KartRider don't require sophisticated graphics cards or ultrafast Internet connections. Avatar details are a snap to customize with drop-down menus for selecting things like "cutie hair" pigtails or red rubber boots.

Nexon waited to court American players until "broadband reached critical mass," says John H. Chi, Nexon America Inc.'s president and CEO. But the company also needs to broaden its market. KartRider's popularity in Korea has been waning—as many as 100,000 Koreans log on at a time today, vs. 200,000 in 2005.

Now the question is, will Americans spend real money in virtual worlds? (Older games rake in subscriptions or down- load fees.) MapleStory "was a litmus test to see if U.S. audiences would have spending patterns similar to Korea," says Min Kim, Nexon America's director of game operations. To make it easy, Nexon Cash cards, which are used to buy digital goods, are being sold at Target (TGT) stores.

So far, so good: In February, North American players spent $1.6 million on 600,000 virtual products within MapleStory.

By Reena Jana, with Moon Ihlwan in Seoul

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