How The Pioneering Website Neopets Eventually Fell From Grace

Neopets, the online fantasy world that dominated the early Internet and many Millennial childhoods, is now a shadow of its former self. A thorough history from The Kernal details how this happened.

According to the article, Neopets, which allowed users to create their own virtual pets and help them thrive by obtaining “neopoints,” made money based on sponsored games and mining customer data:

That time was important: The business model relied on what Dohring called “immersive advertising”—branded Flash games and activities with titles including “Spider-Man Cheese Nips Hunt” and “Orajel Kids Memory Match.” Around 60 percent of its revenue came from sponsorships. The company also harvested marketing data, monitoring player activity to construct trend reports it called “Youth Pulse” research. Advertisers clamored for access to information about the buying habits of millions of users, 39 percent of whom were younger than 13.

Years later, unfortunately, this is precisely how Neopets lost its way:

The flood of games created a flood of Neopoints, and you don’t have to be an economist to predict the result. Activity from one game could easily create 250 million Neopoints a day. By 2010, inflation in the virtual economy had become so severe that the company offered users prizes to remove as many Neopoints from the economy as possible. The not-so-subtle attempt at a deflationary policy did not sit well with many players.

Everything else was neglected in the chase for sponsorship. The result is a site that frequently glitches, including an incident last month in which the site’s moderation system failed, allowing users to post obscenities and other inappropriate content.

As a result, the site shut down the user forums that had been breached. A year before that, parent company Viacom sold the website to another company. It remains to be seen whether a revival is in the offering.

(Via The Kernel)