Show Initiative, the leading virtual worlds and virtual goods trade media company, has announced findings from a comprehensive study of public transactions showing that investors put more than $68 million in 13 virtual worlds-related companies in Q1 2009.

That's substantially down from both Q1 2008, when $184 million was invested in 23 companies, and Q4 2008, when $101 million was invested into 13 companies. However, the decline in investment for virtual worlds is consistent with the overall drop in venture capital activity during the recession and, compared to some sectors, favorable.

Not included in the final accounting are four acquisitions made by virtual worlds companies. Linden Lab, the developer behind Second Life, acquired OnRez and Xstreet SL in January to build out its virtual goods and transactions systems; Stardoll, a teen dress-up world, acquired Piczo as part of its effort to rebrand for tweens; and Mindcandy, the developer behind kids world Mochi Monsters, acquired Tutpup for its educational quizzes. Likewise, teen world Meez, after raising money from Anthem, acquired/merged with Pulse to bolster its mobile options.

To me that's a sign of our maturing industry. While investment may be down for a crowded sector in a recession, some of the early leaders in virtual worlds have built up enough cash reserves and clout to make their own acquisitions and secure their spots.

There is still funding for innovators, though, not just for established players. SuperSecret, a new tween world, raised $10 million. As I noted at the time, that was the largest single investment for a new youth-oriented world in the last year. When we followed up with CEO Ted Barnett, he explained that part of his company's appeal to investors was a new approach to content, platform, and distribution.

The single largest round of funding in Q1 ($15 million) went to Offerpal Media, which manages offer networks for apps, games, and virtual worlds. In particular, the virtual goods space is proving attractive, as our sister site Virtual Goods News reports that investments in the space have stayed flat from quarter to quarter at $69 million.

Read more here.

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3.25 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."