[October 03, 2007]

$1 Billion Invested in 35 Virtual Worlds Companies in the Past 12 Months

SAN JOSE, Calif. --(Business Wire)-- Virtual Worlds Management, the leading media company tracking the virtual worlds industry, has announced findings from a comprehensive study of accountable transactions that venture capital, technology and media firms have invested more than $1 billion dollars in 35 virtual worlds companies in the past 12 months, from October 2006 to October 2007. The announcement comes just prior to the Virtual Worlds Conference and Expo taking place October 10-11, 2007, at the San Jose Convention Center in San Jose, California. The investment numbers and the future of the industry will be discussed in depth at the conference.

Of the $1 billion, $196.8 million was invested in 33 companies. Significant investors in the space include Redpoint Ventures, Charles River Ventures, Intel, and Rustic Canyon Partners. Media companies are also making sizable investments, including Disney, CBS, Time Warner, and GE/NBC Universal's Peacock Equity Fund. The remaining $810 million went to two acquisitions: Walt Disney's $700 million acquisition of Club Penguin and Intel's $110 million acquisition of 3D virtual worlds graphics technology company Havok.

"Investors are not just venture capital firms, but also include major technology, media and entertainment companies," said Christopher Sherman, Executive Director of Virtual Worlds Management. "The amount of money invested in this period of time is staggering. We don't see any slowing in the market adoption of virtual worlds technologies and expect investment in the space to continue. In fact the market is growing significantly, with the rate of adoption of virtual worlds increasing as the technology matures and has more to offer both consumers and enterprise customers."

Investment spanned the entire virtual worlds value chain, including technology platform companies, virtual worlds developers, service providers and tools providers. Business models of the companies raising capital vary, ranging from advertising and subscriptions to virtual item sales, to enterprise software licensing, hosting and services.


Virtual Worlds Companies Funded From October 2006 to October 2007:
Company          Amount      Investor
-------------------------------------------------------------
---------
Anshe Chung Studios       unknown  Gladwyne Partners
Areae             2,000,000(a) Charles River Ventures /
                      estimate
Club Penguin         700,000,000  acquired by Walt Disney
Conduit            5,500,000  Charles River Ventures,
                      others
Donnorwood Media         500,000  unknown
Doppelganger          5,000,000  Greycroft Partners
Doppelganger         11,000,000  ComVentures
Double Fusion         26,000,000  Norwest Venture Partners,
                      others
Double Fusion Japan       unknown  Sedona Capital
The Electric Sheep Company   7,000,000  Gladwyne Partners and CBS
Emergent           12,000,000  Jerusalem Venture
                      Partners, others
FlowPlay             500,000  Angel Funding
Forterra             unknown  In-Q-Tel
Gaia             12,100,000  Benchmark and Redpoint
GarageGames           unknown  IAC
Greystripe           8,900,000  Steamboat Ventures
Havok            110,000,000  acquired by Intel
Hipihi             7,000,000  NGI Group
Journeys             600,000  Elron Electronic
                      Industries
K2 Network          16,000,000  Intel Capital
Kreeda Games           unknown  IDG Ventures, others
Leeuu             2,000,000(a) Redpoint Ventures /
                      estimate
Media Machines         9,400,000  Mohr Davidow Ventures
Millions of us         1,000,000  unknown / amount estimated
Multiverse           4,000,000  Sterling Stamos Capital
                      Management
Network Game Interaction   10,000,000  GSR Ventures
PlaySpan            6,500,000  Easton Capital
Quaq              2,000,000(a) KPG Ventures / estimate
Sparter            2,000,000(a) Bessemer Venture Partners
                      / estimate
Stonfield InWorld        unknown  Credit Agricole
Timeless Cities        1,000,000  LightSpeed Gemini Internet
                      Lab
Trilogy Studios        3,200,000  Chichen Itza Ventures
Trion World Network      30,000,000  Rustic Canyon Partners,
                      others
Weblo             3,200,000  VantagePoint Venture
                      Partners
Whyville             440,000  Texas Workforce Commission
Winking            8,000,000  NIF SMBC Ventures Asia
Total invested      $1,006,840,000
Source: Virtual Worlds Management
(a) estimates

For additional details on each of these investments and links to both investors and companies, please visit http://www.VirtualWorldsManagement.com/.

About Virtual Worlds Management

Virtual Worlds Management is the leading provider of trade events and media for the emerging virtual worlds industry. Virtual Worlds Management services include, Virtual Worlds Conference and Expo, Virtual Worlds 2008 Conference, Virtual Worlds Weekly email newsletter, the VirtualWorldsNews.com trade industry blog and Virtual Worlds Connect, the online community for professionals in the virtual worlds industry. Virtual Worlds Management maintains a strong, experienced management team, allowing it to achieve its mission to be a leading provider of high-quality, high-profile events to targeted business and professional markets. Virtual Worlds Management is a division of Show Initiative, LLC. More information about Virtual Worlds Management can be found at http://www.VirtualWorldsManagement.com.

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