• by Gavin O'Malley  @mp_gavin, October 15, 2008

Venture capital and media firms invested over $148.5 million dollars in 12 virtual worlds-related companies during the third quarter of this year, according to a new report from market research and media company Virtual Worlds Management.

That brought the total investment in virtual worlds for this year to over $493 million--the vast majority of which came from U.S.-based venture capital and media firms, according to Christopher Sherman, executive director at Virtual Worlds Management.

"That's where nearly 100% of the investment we measured came from," said Sherman. "There's obviously investment supporting the Asian virtual world market, but that information isn't available to measure."

The bulk of the U.S.-based investment is in the entertainment space, with all but $22.4 million going to developers of worlds with strong "gameplay" elements, ties to media brands, or the youth sector. Seven virtual worlds aimed at kids and teens accounted for $35.6 million in the third quarter of this year.

"Youth worlds are constantly on the rise, and investors remain interested in backing them as long as they can find unique propositions," said Sherman. "The enterprise market holds a lot of promise for future growth, but it's completely immature."

The investment numbers were down from earlier quarters this year--a trend the report attributes to an overall decrease in venture capital investment this year. The virtual world space, however, could potentially weather hard economic times better than other sectors, according to Sherman.

"Even when the economy is taking a downturn, consumers still want to have fun," he said. "And in the enterprise arena, corporations are just beginning to see the cost-saving implications of virtual worlds, and virtual conferencing in particular."

In the third quarter, MMO publisher Trion received $70 million from a single financial institution and Act II Capital, among other investors--more than any other player in the space.