IBM joins Reuter's, WIRED Magazine, CNET, about about 40 other big-league corporations that have built virtual buildings on public and private islands in the virtual world of Second Life. Clearly, there is some commercial viability here. Other factors swirling in the Second Life soup include:
- Second Life is on the exponential-curve we so often see in successful Internet technologies and systems, growing from 300,000 'citizens' (users) in March of 2006 to the big 2 million mark in December. Wowsa.
- Linden Labs, creators and managers of the virtual worldspace (but not its contents) have announced increases in virtual land - substantial ones. A single sim used to cost US$1,250 to purchase, plus $195/mo maintenance fees. Last month, the price jumped to $1675 and $295/mo fees. The wind says that prices could jump again in Janaury... clearly, virtual property has become hot.
- The first millionaire from virtual real estate - and that's million in US dollars, not game money, has been announced. Looks like we have some business viability here, even though there is nothing real, and it could evaporate tomorrow (if they turned off the switch). Amazing. So the real estate barons operate so that they makes returns month by month, staying away from deep debt and long-term risk. These immediate-return plans have been working.
- The in-world economy, based on a micro-payments system that I'll be writing more about, is not so micro in total impact: over US$600,000 trades hands every day in Second Life - that's roughly L$159 million (in Linden Dollars) in transactions between the residents *every day*. Never have I seens such a clear case of indesputable proof of the power of micropayments. It's as mind-blowing as it is exciting.
Their biggest problem is (and will continue to be) managing perception as the masses arrive. Remember all those movies in the 80's about virtual reality? Well, it looks a bit different than it did in the movies, but really is here, and Second Life really is it. There is a giant caveat, however: this is first-generation virtual reality, running at the max edges of bandwidth, CPU speeds, computer memory, and graphics cards. And it is klunky even with the best hardware you can dig up.
Not only is the overall technology klunky, the virtual world is hardly stable or reliable... this somehow comes to be accepted by the users over time. In the four months I've been a Second Life user, there has been an average downtime (unusable for one reason or another) of over 15%. That's right, the thing is down or broken for at least twenty-four hours every week, either because of scheduled upgrades (for six hours every Weds), attacks on the world by trouble makers called 'griefers', or overloaded sims crwaling at a pace so bad that you can't even walk around in the virtual world.
Sure, much of that is growing pains - and with insider technical experts saying earlier this year that the technology just won't scale past a certain point, the growing pains are harsh and looking to get harsher.
So it is critical to manage the perception of new users to match reality: this is a baby-steps, proto-VR, first-generation technology.
I'll be writing more about how businesses can consider using SL to save piles of money while creating a cutting-edge, fun and functional image. It really can work, but with the current reliability problems, it's shakey and requires back-up plans.
Oh - and the other limitation: so far, I've found that getting a new user just to basic competency of controlling their avatar and navigating the virtual world requires between five and seven hours of time invested. We aren't going to be able to call virtual business meetings anytime soon with anyone that hasn't already ramped-up on Second Life.
Even with all the problems, people are enchanted, thrilled, and investing time and money like crazy. Fortune 500 companies are building virtual headquarters, universities are teaching real classes in virtual classrooms in SL, and more. Clearly, if people are still glued to it with all the troubles and frustrations, we're onto something here.
So much more to say, and so much more to come. I'll reporting to you from the electrified membrane between real life and Second Life.
