In October, the year-old North American version of Nexon's Kaneva had 84,000 members, according to comScore. Once players download the game, they see advertising and can buy all sorts of virtual clothing and upgrades for a few dollars apiece.
It's a substantially different business model from online fantasy games like World of Warcraft, which tend to require subscriptions, at $15 or so per month, and usually don't allow users to buy things for real money, online or off.
"Think of World of Warcraft as kind of closing the book on this generation of games," says Christopher Sherman, executive director of Virtual Worlds Management. "Those folks who are developing the next generation of massively multiplayer games really need to raise the bar anew."
Venture capital, technology and media firms invested more than $1 billion dollars in 35 virtual worlds companies between October 2006 and this October, according to a study by Austin-based Virtual Worlds Management, a company that organizes conferences to discuss emerging online trends.
Second Life— where users can buy their own plots of land to build stores, castles or anything else they can imagine — is creating a game within a game with CBS, called The Virtual CSI: New York, that melds networking and gaming. Avatars will be able to go to crime scenes and figure out what happened.
The lure of interactive online games is so strong it can cut into users' sleep and boost the time they spend playing, according to a month-long study by Syracuse University psychology professor Joshua Smyth.
Smyth found that MMORPG players spent on average 14.4 hours a week playing — twice as long as video game players who don't interact online.
Stephen Prentice, a senior analyst for the Gartner Group in the United Kingdom, believes the time is right for such online social video game services to take off. The big question is who will succeed first.
"The huge opportunity is for a lightweight, three-dimensional environment, a virtual world equivalent of Facebook," Prentice says. "Trying to predict who that is going to be is difficult. Anything could happen here."