Dark clouds are hanging over the economy, but they haven’t reached “ourWorld.”
The colorful and multi-dimensional Web site – created by Seattle startup FlowPlay – is signing up tens of thousands of kids every day who gather in the virtual world to chat, shop and play games. The growth spurt – despite the bleak economic forecast in the real world– has led to more investment capital.
FlowPlay founder and CEO Derrick Morton tells me that the company has reeled in an additional $1 million, a relatively small round of financing that will propel FlowPlay to profitability this summer.
“We are a hair’s breadth away from profitability,” says Morton. “This is to make sure we get there.”
The former RealNetworks and GameHouse executive said he contemplated going out for a larger second round of funding, but decided that it wasn’t needed given the recent success of the business.
Last year, the company raised $3.7 million from Intel Capital, former RealNetworks executive Michael Schutzler and Google social media guru Dick Costolo.
“OurWorld” has already attracted a whopping 1.3 million registered users. Many of those have signed up in the past two months following a crucial marketing partnership with the online gaming portal, Miniclip.
That’s the same distributor that helped Club Penguin, the wildly popular virtual world for kids that was sold to Disney for up to $700 million in 2007. Morton says that Miniclip has on the order of 57 million unique visitors each month, a tremendous base of traffic from which to draw.
In the next two months, Morton estimates that registered users for “ourWorld” will surpass two million. Much of that growth is being driven by Miniclip deal, which features an embedded version of “ourWorld” on its Web site.
The two companies split revenue when users sign up for more detailed game play, though Morton did not offer particulars of that deal.
Developed for kids between the ages of 12 to 16, "ourWorld" costs $5.99 per month. Users also pay for virtual goods – furniture for apartments, clothes for characters and gifts for friends. Morton says the average user spends about $6 per month on virtual goods.
Some of the company’s growth also is coming from overseas, since “ourWorld” has unexpectedly attracted a following in Turkey, Brazil and India. Asked why, Morton said he wasn’t sure.
“I can’t say I have a good answer for you,” he said. He’s now looking at partnerships in those countries in order to help monetize the audience.
FlowPlay also has begun licensing the core virtual world technology behind “ourWorld” to other companies. Morton expects to announce a deal on that front in the coming weeks.
It’s a risky strategy turning over the core technology asset to possible rivals, a strategy that was hotly debated at the company.
But Morton said he would rather play a part in the success of other virtual worlds rather than watching them develop competing technologies on their own.
FlowPlay’s success fits with another thesis we’ve talked about on TechFlash in recent months. That’s the idea that makers of low-cost, casual entertainment are actually doing well in this economic downturn.
Morton said he has no evidence that’s the case with FlowPlay since “ourWorld” is just a year old, with the main marketing thrust coming in the past few months.
But with a fresh round of capital and new users joining every day, Morton is hopeful the trend will continue.
“I am a happy guy,” he says. “In this economy, I am happy to be where we are.”
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