Engagement in virtual worlds has become pervasive, particularly among the young. At the same time, the number of virtual environments has increased rapidly. Due to intensifying competition, promoting sustained usage, i.e. continuance, has become a top priority for virtual world operators. Prior research has shown that network externalities play a key role in the adoption of communication technologies. However, a small amount of research has examined the role of network externalities in continued IT usage in general or with respect to the virtual world participation in particular. To fill in this gap, we examine how perceived network externalities affect the continuance of social virtual worlds. To this end, we introduce the concept of perceived aggregate network exposure (PANE). We extend the original information systems (IS) continuance model with perceived enjoyment and position PANE as a moderator. We test the model with data collected from 2134 Finnish Habbo Hotel users and employ structural equation modelling in the analysis. The results demonstrate that PANE moderates the influence of motivational factors on continued use intention and satisfaction.