You Only Live Twice

By Rebecca Goozee, Deputy Editor

Second Life has attracted big business since it opened to the public in 2003, with companies like IBM and Toyota investing significant time and money to create an online business environment for consumers and employees. But five years in, the platform’s early promise remains largely unfulfilled. Is Second Life losing its appeal, asks Rebecca Goozee, or is this just the start of something bigger and better?

Unlike other online games such as World of Warcraft or Star Wars Galaxies, there are no dragons to slay, no levels to attain and no lives to lose in Second Life. Instead, the platform offers the opportunity to buy and develop online real estate, attend music events with your friends and sell your own creations to other users. Second Life truly aims to be a second life for users, with opportunities for both work and play. But don’t be fooled into thinking this is some virtual utopia; Second Life means big business. And even the warlocks and wookies have a stake.

Created by San Francisco-based company Linden Labs, Second Life is a 3D virtual world where people use avatars to explore and communicate with other residents. In 1999, Linden Labs’ founder Philip Rosedale left his position as CTO at RealNetworks in order to start working on his ideas around networking and the possibility of creating a brand new web experience. “I always felt that using computers to digitally simulate a world, to simulate the physics of reality, was the ultimate thing you could use computers for,” he explains. “If you could use networking, the potential was limitless.” At that point, Rosedale believes that Second Life was born, although it wasn’t until June 2003 that the platform was available to the public. Even then it took a further three years for the proliferation of consumer technologies such as Web 2.0 to hit critical mass and become ubiquitous enough for people to finally start taking notice. Artists like Duran Duran and Suzanne Vega played live concerts, law schools put on lectures, businesses began experimenting – even Mark Warner, a possible Presidential candidate, put his avatar on Second Life. In November 2006, online entrepreneur Ailin Graef became the virtual world’s first millionaire.

Second Life has grown dramatically since then, and there are now a reported 1.6 million residents who have joined from all over the globe. The virtual land area is now four times the size of New York City. “As both the number of Second Life residents and the amount of unique content grows, the overall experience will become increasingly rich for businesses and individuals alike,” says Rosedale. “In Second Life there are virtually no boundaries or limits to what you can do or create. The platform is already being used for business, education, entertainment and social networking, and it will ultimately be up to individuals and companies to develop unique ways of interacting with their respective communities.”

Down to business
It is the potential business benefits of Second Life that have become increasingly attractive to companies looking to transform their training, prototyping and technology development functions, amongst other applications. The immersive aspect of socializing, creating and collaborating is just one of the reasons behind the intense interest, and as a tool for exploring innovation, Second Life attracts individuals and entrepreneurs as well as marketers from big brands, universities and non-profit organizations alike.

Indeed, Second Life has essentially become a giant test bed environment for those businesses that wish to experiment with new ideas before making them public. One such example is Implenia, a large construction firm based in Switzerland that has been working on figuring out how to create a virtual operation center to physically monitor building operations from within Second Life. To do this, the firm created a virtual operations center in Second Life, integrated it with the operations center of the physical building, and now uses it to monitor and manage energy usage, HVAC and security, among other things. What Implenia found during its experiments is that it has been able to reduce the cost of managing buildings by $20-$25 per square meter in real life. It is now thinking about how this could apply to individual homes.

Justin Bovington is Founder and CEO of Rivers Run Red, a new breed of agency that specializes in developing virtual worlds as a new channel of communication. The company was created as a reaction to the apparent disconnect between real-life and immersive experiences. “We were very concerned at the time that we were losing the emotional touch and reach of the internet,” he explains. “When we came across Second Life, we felt it represented the promise of the internet 10 or 15 years ago, so it was a logical choice for us to go forward.”

In a virtual world, customers are able to immerse themselves more completely in a brand, and Bovington has seen unprecedented implementation levels with brands in virtual worlds – some people spend as much as two to three hours with a brand in one sitting. There aren’t many other channels of exposure that can give that kind of return, he suggests. “Brands are becoming content guardians. A brand enables a good contract of engagement between itself and the consumer; it’s all about give and take. It’s about giving something back to the consumer and they’ll give you time.”

The platform is also fast becoming an excellent way of prototyping any kind of physical product where design is important, as it brings people together who may not be able to physically meet or who may not traditionally have had the tools to contribute to a product’s design under normal circumstances. Erica Driver, Principle Analyst at research firm Forester, explains how evolving technologies have allowed people to work together even if they are not in the same room. “Mixed reality meetings will have some participants together in a real world setting and other participants together in a Second Life space,” she explains. “You can stream video from the physical environment into Second Life, and vice versa.” The technology is still largely immature, and Driver is quick to point out that she is yet to attend one of these meetings where everything worked correctly, but the potential is there and she believes that the kinks in the technology could and should be ironed out within the next year.

For Bovington, it is important to use these technologies – alongside other developments such as web presence and mobile communication – together. “If you look at what’s happened over the past 25 years, we’ve gone from a command structure of operating systems, from MS-DOS, to Windows, which is a 3D environment, to a 3D space. It’s a logical evolution.”

Challenging times
Despite this promise, Driver believes that companies are still at an early stage of adoption and remain in an experimentation phase. She’s identified a number of things that will have to change before the environment can move forward, with ease of content creation being one. “It is still relatively hard to build and create objects, which can be a barrier to companies getting involved at this time,” she notes. She also points to troublesome interfaces as a potential hindrance: a mouse and a keyboard are not the best interface tools for engaging in a virtual environment.

A third issue for Driver is that an avatar can typically only be used in one virtual environment; there is no option to switch between worlds using the same model, which can distract people from participating in more than one virtual platform. Instead of an interoperable, heterogeneous environment like the internet, where a web page can be created and viewed by anyone, it is impossible to travel between virtual worlds. She also believes that most business people think of the virtual environment as inappropriate for work, and see it as some sort of a game or a joke. “They see no business value in interacting with other people, especially when their avatar looks like a bunny or a monster,” she explains.

Add to this the fact that there are relatively few major success stories in Second Life and the question becomes one of whether the hype exceeds the reality. Many businesses that have gone into the virtual world to set up marketing presences or do branding exercises have only enjoyed limited success, and stories of virtual ‘ghost towns’ abound. “You go to some islands and there’s nobody there,” explains Driver. “They’ve created spaces that resemble the physical world, and they are not taking advantage of the things that are different about Second Life compared to any other kind of environment.”

Rosedale is quick to point out that, as with any growing community, there can be the occasional sticking point. “As the population continues its rapid growth, keeping the platform robust remains our most pressing issue,” he says. “Ultimately, we are here to provide a technically sound, stable and highly functional platform on which our users can create fully autonomous lives.” He also sees his brave new world as still being in a nascent stage, and maintains that the market will determine where virtual worlds go. “We don’t necessarily see the lines between real and virtual worlds being blurred as much as we see them converging,” he explains, and compares today’s situation to that of the growth of the web in the early 1990s when many proclaimed the death of bricks-and-mortar enterprises. “It would be better to think of a virtual presence as a complement to your first life. Maintaining a virtual presence will become ubiquitous in a few years, perhaps as ubiquitous as cell phones and email addresses are today,” he predicts.

Driver also compares the current situation to when businesses first started using the web. Many companies put up websites without understanding how to leverage the new medium and wasted a lot of money. Driver believes that we are at the same stage with virtual environments. “We will get through it,” she states. “There will be businesses that truly can figure out how to leverage what’s new and different about the virtual world and benefit from that, and others will follow.”

A second chance for Second Life?
Indeed, it seems most firms are still in a wait-and-see phase. Many are reluctant to talk about their motives and strategies in virtual worlds, claiming they are trying to preserve competitive advantage – but that doesn’t mean they’re not exploring the possibilities behind the scenes. “I remember 15 years ago when people started putting email addresses on the back of their business cards,” remarks Bovington. “People were saying, ‘I never do that, I never use email’. Well, we’ve just started putting avatar names on the back of our business cards for some of our clients – so if you like, it’s history repeating itself in terms of communication.”

At Forester, Driver’s vision for the future is called web 3D and she expects it to hit our monitors in the next five to seven years. She sees web 3D as a series of linked interactive 3D and 2D environments, including specific private applications such as games, virtual worlds and subversive workspaces. “People will be able to move among these in a very natural way, sort of like the way we use the web today,” she explains. “ We launch our browser and we can go to any website and I see it as similar to that. There is also a huge hurdle around perception of value that will gradually be overcome as a younger generation enters the workforce. Kids today grow up on a virtual environment with applications like Webkinz, Club Penguin or playing video games like World of Warcraft, so they will not have a problem with working virtually.”

Rosedale has also indicated that the future of the web looks 3D and says he sees Second Life as the next step in the fulfillment of the internet – one in which people create and interact with content and each other in a 3D environment. “You could envisage Second Life as a type of 3D internet browser,” he muses. “The potential for interaction, education, commerce and entertainment is far greater than in the two-dimensional world that we are now familiar with on the web. It’s possible to foresee a time when everyone on the internet has an avatar and an address in a virtual world – just in the same way as they have adopted blogs and websites now.”

It seems that the concept of virtual worlds is an evolution rather than a revolution in the way businesses operate. Undoubtedly challenges remain to be overcome before the negative perceptions generated by the virtual backlash can be put to one side, but just as the advent of the internet opened up new opportunities for companies, ventures such as Second Life have opened the doorway to the future of the internet and maybe even business as we know it. It seems that the possibilities are endless.

My Second Life experience: Part 1

With Raz Schionning, Web Director at American Apparel
American Apparel is, in most things we do, innovative and inventive. We actively seek out new opportunities and challenge conventions. Second Life and the concept of virtual worlds is very interesting and it holds significant potential as both a marketing and sales channel. Second Life is, perhaps, the most notable virtual world to-date, and when we got involved nobody had yet brought real-life brands into Second Life. We set up our virtual store as an outpost and an opportunity to experiment with a new platform. I had no expectations of exceptional sales; the motivation was purely, “this seems interesting, let's see what happens”.

We sold virtual and actual products from our store in Second Life. The virtual products were digital replicas of our real products, but sales were not the objective; rather it was to discover how and if an environment such as a virtual worlds could be useful in promoting our brand and products. In this regard, it taught us about the audience, the mechanics, and it helped us to understand the capabilities as well as the limitations. Second Life is an impressive virtual world platform in many ways. Linden Labs has left the door wide open to creativity, but it’s not without limitations.

Our virtual store in Second Life closed last summer. As an experiment, the virtual store had served its purpose. We tested an idea, played with a concept, and learned a few things about what online shopping might look like in the years to come. The promise of virtual worlds is compelling and exciting, and I believe there will be more opportunities for us to explore this channel in the future. I remain both optimistic and excited about the possibilities.

My Second Life experience: Part 2

With Kirsten Keck, Corporate PR Manager at Adidas Group
We launched our Second Life activity back in September 2006. We joined because we constantly strive to be at the forefront of developments in digital technology and connecting with our consumers. Our partnership with Second Life was a testament to the ever-blurring lines between digital and real world experiences, and the importance of both to our audience.

Second Life was just one element in our e-marketing mix. We had almost 90,000 visitors to the Adidas island and we have sold over 25,000 pairs of virtual trainers. In Second Life we sold the Adidas a3 Microride shoes via the Adidas virtual retail store. User avatars had the opportunity to purchase and wear virtual versions of the Adidas a3 Microride shoe, hang out on the Adidas island and test the product in dedicated training areas.

Last August, it was time to bring the campaign to an end and look into other new innovative digital opportunities. The digital world is constantly changing and evolving, and we are striving to be at the forefront of innovative digital opportunities.

My Second Life experience: Part 3

With Aaron Uhrmacher, Global Peer Media Lead at Text 100
Text 100 launched its Second Life presence in August 2006. There are a number of things that inspired us to open an office there. From our perspective, immersive virtual worlds like Second Life represent the next generation of peer-to-peer platform and as a public relations consultancy. Virtual world environments are fantastic communications platforms, as they incorporate text, audio, video and social interaction in ways that can’t be replicated using other online meeting applications.

Text 100’s mission is to use Second Life as a tool to benefit both our staff and clients. For our staff, we see Second Life as a platform for education, collaboration and innovation within the company. For our clients, we want to help them understand the benefits of virtual worlds and provide counsel on community building, event facilitation and communications.

Over the last two years, we’ve had the opportunity to work with non-profits, educational institutions and global businesses that we otherwise might not have even met. So the value of our virtual world exploration has paid off in terms of social networking, business productivity and certainly revenue.

At this point, Second Life’s IP and technical limitations leave it much better suited as a space for social networking, community building and education. Thankfully we’ve also seen a proliferation of niche virtual worlds over the last year or so that cater to businesses that require a secure environment in which to experiment. There’s little doubt that virtual worlds will play an important role in the evolution of online communities, peer-to-peer interaction and social networking. Businesses that are able to harness these new platforms to communicate with their customers, business partners and others will certainly benefit from their participation.