Sony latest entrant into war of virtual worlds

The success of Second Life of Linden Labs that allows you to create an avatar of yourself and escape into the realm of fantasy has spawned a generation of copycats looking to cash in on the hype. Some have found success by targeting niche cult segments such as those who have always dreamed of immersing themselves into Star Trek.

Sony is hoping that developing such a world could give its sputtering console business a shot in the arm. Sony trails rival Nintendo in the console wars and lags Microsoft's established services in video and multimedia downloads. But after several delays, it has launched Home, a 3-D virtual networking world.

The service is available free to those who have invested in the Playstation 3 console. How does Sony then propose to monetize the service? It hopes to draw commercial partners itching for a chance to interact with a consumer base. Such partners are banking on virtual transactions sprouting real revenue. Sony has made a credible start, drawing Paramount Pictures and Red Bull into its ranks of advertisers.

Beyond that it's not clear whether Home will offer anything not seen before. There are the usual customizable avatars and networking activities such as video chats. There are chances to define sub-networks, conduct meetings and establish living arrangements. How might Sony exploit synergies with its core strengths? Possibly by integrating promotions of upcoming games or even incorporating aspects of Home into some games. The primary strategy seems to be to induce people to spend as much time on the Playstation network as possible and hope advertisers take notice. Will that be enough for Playstation to re-establish dominance? Home doesn't seem like a killer application but it would be interesting to see if Nintendo responds by staying loyal to its mantra of "game first" or is willing to diversify.