Virtual worlds were at one point in time going to be the next big thing but many of them were hit hard by the economic downturn. Doppelganger, and Nickelodeon’s Nicktropolis all folded while Gaia Online has stopped referring to itself as a virtual world.

However, things might be turning around with Sulake announcing that revenue on Habbo Hotel has increased 20 percent over 2009. They’re starting to use labels like social game and community while they’ve been running promotions for teen brands like the Twilight movies.

Meanwhile, tween-girl aimed Stardoll has passed the 100 million member mark. Mattel will be launching a Stardoll-branded product line starting this Fall and JC Penney has committed to an exclusive Stardoll brand of clothing and accessories this fall in 300 stores.

Source: AdWeek {link no longer active}