Neopets - Virtual Online Pets

At an intersection between two of the most fluid markets today, virtual pet sites combine children’s toy ‘fads’ with the ever-evolving world of technology. Surprisingly, however, it is in this unique niche that we find some of the most well-known and longest-standing websites on the internet. Virtual pets themselves have been growing in popularity since the creation of the Tamagotchi by Bandai in 1997. These electronic friends soon migrated to the internet in the form of hundreds of sites where users can feed, care for and play with their digital pets. Web-based virtual pet games were able to grow quickly due to their worldwide accessibility and the fact that a user does not need a particular physical device to access the site, as is the case with appliance-based virtual pets like the Tamagotchi. The sites typically include virtual worlds in which the user can interact with their pets and other pet owners, play games, purchase items and earn spendable currency. Due to the fact that the websites appeal most to young users under the age of 18, and that these users are caring for digital ‘pets’, the return rate of players is extremely high, and can serve as a lucrative platform for advertising and product placement.

 The most well-known of these sites is called Neopets.com, the brainchild of two British college students that was created in 1999.  Upon creating what would one day become an internet giant, Adam Powell and Donna Williams soon realized that what began as an ‘inside joke’ between their friends was growing at an unprecedented and uncontrollable rate. Unable to keep the website going themselves, the duo sold the budding company to market research expert Doug Dohring in 2001. Under the supervision of Dohring, Neopets Inc. was formed and the company’s headquarters were moved to Southern California. Dohring’s most important contribution to the budding Neopets empire was the introduction of ‘immersive advertising’ to the site. Working in a manner similar to product placement, real-life products began to appear on the site in the form of games, food and toys. Users now had the option of playing “Pepperidge Farm Pinball” or purchasing McDonald’s hamburgers for their pets. Another important source of revenue for Neopets Inc. is the sale of physical merchandise to real-world clients. Partnerships with Wizards of the Coast (a trading card company) and Thinkway Toys has resulted in a line of trading cards, figurines and plush animals that produce a significant amount of revenue for the web-based company. In addition, other partnerships with various companies like fast-food giant McDonalds have produced spikes in merchandise consumption and user sign-ups. When the company was acquired by MTV, a subsidiary of Viacom in 2005, it boasted over 30 million unique user accounts and had been translated to ten languages for world-wide use. Children under the age of 13 dominate 39% of those 30 million users; while 40% was made up of children aged 13-17 and only 21% of were 18 or older. On top of that, a whopping 57% of Neopets users were female, an extremely high figure in the typically male-dominate online gaming market. An even more fascinating statistic is the amount of time the average user spends on the site. As of 2005, the average user spent almost six hours and 42 minutes on Neopets.com every month, which boils down to almost 100 minutes per-week.

Neopets has been able to maintain its status as one of the ‘stickiest’ websites on the internet for a number of important reasons. It offers high quality, engaging content to users of all ages. There are many things to do in the virtual world of Neopia aside from caring for a user’s pets. The website features many different regions, each with its own set of NPC (non-playable character) run shops where players can buy food and items for their pets. Players make these purchases using an in-game currency they can earn by playing a myriad of themed games, investing in the Neopian stock market, and trading with other players. The user-to-user trading element of Neopets has gotten so large that it has given rise to its own special type of in-game inflation—otherwise known as mudflation, the inflation of virtual currency—that affect the price of items for all users across the site. Another reason for Neopet’s high ‘sticky’ factor is the frequency with which the website is updated. Seasonal events are very popular on the site, as well as site-wide events that all users can participate in. This segues nicely into the third contributing factor to the site’s popularity; its strong user community. Interactions between users are facilitated in a number of ways. The site boasts a very active message board, offers a chat feature and also provides email between users in the form of ‘Neomail’. Players can add other players as friends, battle their neopets in the ‘battle arenas’ and even purchase items from their personal shops. Finally, Neopets offers many different loyalty rewards to members who have been on the site for a long time, or who visit the site daily. In addition, they also offer special bonuses to users who ‘recruit’ other new users to the site. Despite its popularity and ability to attract and retain players, Neopet’s rise to prominence has not been without criticism and controversy.

One of the most criticized aspects of the virtual pet site is the manner in which they deal with swindlers, cheaters or rule-breaking players. Neopet’s most popular and most dangerous user-control mechanism is account freezing, where a player is permanently locked out of their account and loses all of their items, money and neopets in the process. Fear of this permanent and powerful punishment compels most users to follow the rules, although there are many documented cases where accounts were frozen arbitrarily, or due to a rule infraction that the players themselves did not consciously commit. While the use of account freezing to punish offending players is not highly controversial in and of itself, the uncooperativeness of Neopets staff to  work with users who believe they have been unjustly banned is. With almost 30 million unique users, the site is simply too large for administrators to properly handle incidents on a case-by-case basis, a fact that has spawned much criticism for the online giant.

Neopets Inc.’s difficulties do not stop at criticism from their user base. The entity is also surrounded by a number of controversies that have yet to be properly resolved. The first of these is the fact that its CEO Doug Dohring is an active member in the Church of Scientology, donating large quantities of his income to the church every year.  While the corporation maintains that there is no material related to Scientology on the site, there are many unsubstantiated rumors that employees are forcefully encouraged to convert to Scientology upon being hired. More of a hindrance than the religious controversy, Neopets has also been attacked for the manner in which it directs advertising at young children. The ‘immersive advertising’ used on the site is targeted mainly at players under the age of 12, a market segment that is notoriously difficult for corporations to engage with. Neopets Inc. actively sells market research data on children under the age of 12 to other companies around the world, capitalizing on its ‘unparalleled access to young people’.  The parents of many of these young users are worried that their children are being buffeted with copious amounts of advertising, and that their development could be negatively affected as a result. In addition, many children cannot tell the difference between advertisements and game elements, and can be lead away from the site to other areas of the internet. While Neopets maintains that the age settings on a players account protect them from inappropriate content—such as the gambling-based games only available to users over the age of 18—there are currently no barriers preventing younger members from pretending they are older than their actual age.

These controversies, in reality, have not hindered the advance of the virtual pet site, as it continues to dominate its market in every way, shape, and form. Despite the fact that the site has been on the web for almost twelve years, it boasts more users than its more actively advertised competitors, including Club Penguin (a Disney subsidiary) and Webkinz, a plush toy that users can interact with online. Upon its inception in 1999, Neopets.com helped to carve out a niche for other virtual pet sites to grow, giving rise to hundreds of other competitors who have been able to attract substantial user bases from the still-popular fad the site created. In this way, what began as a project between two college students became the pathfinder for a new trend of online virtual gaming. The site also stumbled upon a new avenue for directing advertising to the previously unreachable market sector of young children; Neopet’s primary users. With the unprecedented rise in mobile gaming in recent years, it will be interesting to see exactly how the web-based virtual pet site adapts to the changing tastes and accessibility of its user base. Despite the increase in downloads of mobile games like Angry Birds, however, Neopets announced that it recently celebrated its 1 trillionth page view in June of 2011. The virtual pet site giant, it would seem, has no intentions of slowing down any time soon.