Will Second Life Get a Second Life?

(@bazaarbrett) — 

A face from Second LifeIn the entire Web 2.0 space, there may be no medium more hyped in the past year than Second Life, which provides us with a glimpse of what the 3D-Web of the future may be like.  You've read about Second Life everywhere – from the Wall Street Journal to BusinessWeek to Wired.  Back in January, I did some exploring of my own in Second Life in my Word-of-Mouth Wisdom interview series and reporting on the news that Second Life had open-sourced it's previously proprietary browser.

But recently Second Life is taking a beating.  Check out these recent articles in Time and Wired.  Even though many corporations have rushed in to grab their own virtual real estate, it turns out that not that many people are there to shop.  They are primarily there to gamble and have sex, and this shouldn't be surprising.  Many of the first businesses on the Internet were about gambling and sex.  It's the early-adopter syndrome in a medium that let's you hide your real identity and pretend to be someone else.

To be clear, I am bullish on the 3D-Web long-term.  There is no doubt that as virtual reality becomes more real and accessible to the masses, as opposed to the clunky and odd experience of Second Life today, virtual shopping will take off.  When Internet Explorer and Firefox embed 3D-Web browsers into their 2D-browsers, that may mark the tipping point.  I am also confident that this is going to take many years – at least as counted in "Internet time".  In other words, I'm talking about 3-5 years.

The 3D-Web will provide a more tactile experience than today's Web, and online shopping will blossom.  Our company has shown the potential of a more tactile experience – customer reviews allow peers to "touch and feel" a product sold online, and sales significantly increase with a corresponding reduction in returns (as customers expectations are set by each other, the element of negative surprise is reduced).  Feel free to ask us about our over 20 case studies to learn more.

Until then, I'll be watching Second Life to see how it evolves.  But I don't expect much in the near-term, to be frank.  Once a medium is hyped to the extreme and then has a counterbalancing crash in popularity, it takes years to recover.  I'm not sure that Second Life will get a second life – the word of mouth is already too negative and the community is tainted.  But there will be many 3D-Web efforts to follow…

Update 9/8:
TechCrunch reports that ICANN's CEO, Paul Twomey, keynotes at a conference with the message that virtual worlds are the future of global commerce.  William Gibson, one of my favorite authors and the inventor of the word and concept of "cyberspace", would be proud.

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  • http://www.awarenessiseverything.com Paul Janowitz

    Hi Brett,

    I agree completely. There has to be consolidation and customer data is key to making the right decision as in most business and marketing applications. The idea that you just "have to be there" to be legitimate is not true at this point for virtual worlds. They are a unique and potentially valuable resource for the right brands and the right reasons. Starwood's Aloft project gets a lot of flack for closing down, but I say it did not close down, the project was simply done. It was a research and ideation project where they got what they wanted and then did not have any further need for it nor did anyone in Second Life have a reason to visit (no events, no staff, no interaction = no traffic). Being a research company and customer centric branding agency we see huge potential in engaging customers in virtual worlds for research, ideation and product development. Here you are able to reach teach leaders that you normally don't get and really push the envelope. This is not to say that you would use virtual worlds for market sizing or any ad testing – the totally wrong platform for that – these are not "the" market. They are lead adopters and as such are great for ideation and forward looking work, but not more projectable findings that one would use to reprice a products. So, look before you leap, know before you go, of whatever else means ask a few questions before you spend a few thousand.

  • http://www.awarenessiseverything.com Paul Janowitz

    Hi Brett,

    I agree completely. There has to be consolidation and customer data is key to making the right decision as in most business and marketing applications. The idea that you just "have to be there" to be legitimate is not true at this point for virtual worlds. They are a unique and potentially valuable resource for the right brands and the right reasons. Starwood's Aloft project gets a lot of flack for closing down, but I say it did not close down, the project was simply done. It was a research and ideation project where they got what they wanted and then did not have any further need for it nor did anyone in Second Life have a reason to visit (no events, no staff, no interaction = no traffic). Being a research company and customer centric branding agency we see huge potential in engaging customers in virtual worlds for research, ideation and product development. Here you are able to reach teach leaders that you normally don't get and really push the envelope. This is not to say that you would use virtual worlds for market sizing or any ad testing – the totally wrong platform for that – these are not "the" market. They are lead adopters and as such are great for ideation and forward looking work, but not more projectable findings that one would use to reprice a products. So, look before you leap, know before you go, of whatever else means ask a few questions before you spend a few thousand.

  • http://www.bazaarvoice.com Brett Hurt | Founder and CEO

    Paul,

    Thanks for your comments. I enjoyed your article on Austin AdFed and agree that companies must focus on the fundamentals. They must also participate in the environments that are most likely to attract their target demographic. It is much like testing various paid search keywords to see which ones bring the right type of customer in and converts them quickly. One of the big problems with Second Life, for U.S. companies, is that it is mostly a European community. Understanding who is in the community is paramount before spending hundreds of thousands to build a presence there.

    I agree with you that Second Life will be one of many 3D-Web platforms. Who knows – maybe Microsoft will emerge as the long-term winner here. The 3D-Web will be intimately tied to the operating system, just like Internet Explorer is dominate today for the 2D-Web. We'll have to find out.

    Best,
    Brett

  • http://www.bazaarvoice.com Brett Hurt | Founder and CEO

    Paul,

    Thanks for your comments. I enjoyed your article on Austin AdFed and agree that companies must focus on the fundamentals. They must also participate in the environments that are most likely to attract their target demographic. It is much like testing various paid search keywords to see which ones bring the right type of customer in and converts them quickly. One of the big problems with Second Life, for U.S. companies, is that it is mostly a European community. Understanding who is in the community is paramount before spending hundreds of thousands to build a presence there.

    I agree with you that Second Life will be one of many 3D-Web platforms. Who knows – maybe Microsoft will emerge as the long-term winner here. The 3D-Web will be intimately tied to the operating system, just like Internet Explorer is dominate today for the 2D-Web. We'll have to find out.

    Best,
    Brett

  • http://www.awarenessiseverything.com Paul Janowitz

    Brett,

    First of all thanks for pointing out how the Internet first took off as well – all the hype around Second Life and sex is the same as the Internet years ago…and that revenue (right or wrong) provided the funding (and in some cases still does today) for the data hosting and other services smaller content providers use on the web today. The "killer app" for virtual worlds will be a standard platform that allows someone to use their avatar in Second Life, Kaneva and any of the other 30+ virtual worlds out there today. Just like there could not be 40 versions of the web and associated browsers there can't be that for virtual world and the coming 3D web either.

    For a recent interivew I did with Austin AdFed about the mistakes companies are making in virtual worlds and the near term opportunities read here: http://www.austinadfed.com/newsletter_06-3.shtml.

    For an extensive list of websites, news coverage, YouTube overviews and opinions on virtual worlds and Second Life, check out our blog at http://www.awarenessiseverything.com and let keeps this chat going.

  • http://www.awarenessiseverything.com Paul Janowitz

    Brett,

    First of all thanks for pointing out how the Internet first took off as well – all the hype around Second Life and sex is the same as the Internet years ago…and that revenue (right or wrong) provided the funding (and in some cases still does today) for the data hosting and other services smaller content providers use on the web today. The "killer app" for virtual worlds will be a standard platform that allows someone to use their avatar in Second Life, Kaneva and any of the other 30+ virtual worlds out there today. Just like there could not be 40 versions of the web and associated browsers there can't be that for virtual world and the coming 3D web either.

    For a recent interivew I did with Austin AdFed about the mistakes companies are making in virtual worlds and the near term opportunities read here: http://www.austinadfed.com/newsletter_06-3.shtml.

    For an extensive list of websites, news coverage, YouTube overviews and opinions on virtual worlds and Second Life, check out our blog at http://www.awarenessiseverything.com and let keeps this chat going.

  • http://www.bazaarvoice.com Brett Hurt | Founder and CEO

    Charles,

    I remember the virtual world's software 10 years ago as well. Talk about early on the curve. There was even a 3D-Web shopping mall back when 56k baud was the standard. Needless to say, it didn't take off then because the "lag" (wait time) was even worse than it is on Second Life. But what is different with Second Life is that corporations have made a real effort. However, you can build a beautiful store in the wrong location and get no traction. Isn't retail all about "location, location, location"? Well, Second Life is not known as a destination for shopping. It is known as a destination for gambling and sex, the two most popular activities in its community. And it's mostly Europeans, not Americans. But I am confident that a real 3D-Web experience will emerge that satisfies both consumers and corporations. I'm just not confident that Second Life will be able to "rebrand" now that the community is "set".

    Thanks for your comments,
    Brett

  • http://www.bazaarvoice.com Brett Hurt | Founder and CEO

    Charles,

    I remember the virtual world's software 10 years ago as well. Talk about early on the curve. There was even a 3D-Web shopping mall back when 56k baud was the standard. Needless to say, it didn't take off then because the "lag" (wait time) was even worse than it is on Second Life. But what is different with Second Life is that corporations have made a real effort. However, you can build a beautiful store in the wrong location and get no traction. Isn't retail all about "location, location, location"? Well, Second Life is not known as a destination for shopping. It is known as a destination for gambling and sex, the two most popular activities in its community. And it's mostly Europeans, not Americans. But I am confident that a real 3D-Web experience will emerge that satisfies both consumers and corporations. I'm just not confident that Second Life will be able to "rebrand" now that the community is "set".

    Thanks for your comments,
    Brett

  • http://OpenSourceMarketer.com OpenSourceMarketer

    Having wasted an evening messing with Second Life I have to say I don't really see the potential. It is not much better than virtual worlds software was ten years ago, which is still clumsy to say the least. I hate to be negative on a different way to thinking, but tools like Second Life are still waiting for that killer app to come along and propel them into super stardom. I guess if you have plenty of time to kill, then Second Life might be of interest, but for everyone else I think it is still just an interesting footnote in the Internet biography.

    Charles McKeever
    OpenSourceMarketer.com

  • http://OpenSourceMarketer.com OpenSourceMarketer

    Having wasted an evening messing with Second Life I have to say I don't really see the potential. It is not much better than virtual worlds software was ten years ago, which is still clumsy to say the least. I hate to be negative on a different way to thinking, but tools like Second Life are still waiting for that killer app to come along and propel them into super stardom. I guess if you have plenty of time to kill, then Second Life might be of interest, but for everyone else I think it is still just an interesting footnote in the Internet biography.

    Charles McKeever
    OpenSourceMarketer.com

  • http://www.bazaarvoice.com Brett Hurt | Founder and CEO

    Taran,

    Good point. I also find it interesting that the majority of Second Life's community is European. Yes, it is a global medium. But not that helpful for the US-based companies that have rushed in to capture US-based consumer mindshare.

    I am confident that Second Life will continue to grow and evolve its functionality. I'm just not confident that it will re-attract the business community and become a successful "virtual reality" mall. And it's residents are probably just fine with that. Second Life will still make a lot of money, it just won't change eCommerce as we know it in today's 2D medium (with the occasional Scene7-based rich zoom and 3D rotate to make online shopping more tactile).

    BTW, I wrote about the subject of making online shopping more tactile two years ago:
    http://www.bazaarvoice.com/blog/2006/03/08/closing-the-tactile-gap-between-offline-and-online/

    Thanks,
    Brett

  • http://www.bazaarvoice.com Brett Hurt | Founder and CEO

    Taran,

    Good point. I also find it interesting that the majority of Second Life's community is European. Yes, it is a global medium. But not that helpful for the US-based companies that have rushed in to capture US-based consumer mindshare.

    I am confident that Second Life will continue to grow and evolve its functionality. I'm just not confident that it will re-attract the business community and become a successful "virtual reality" mall. And it's residents are probably just fine with that. Second Life will still make a lot of money, it just won't change eCommerce as we know it in today's 2D medium (with the occasional Scene7-based rich zoom and 3D rotate to make online shopping more tactile).

    BTW, I wrote about the subject of making online shopping more tactile two years ago:
    http://www.bazaarvoice.com/blog/2006/03/08/closing-the-tactile-gap-between-offline-and-online/

    Thanks,
    Brett

  • http://www.your2ndplace.com Taran Rampersad (Nobody Fugazi)

    I think that you're right about short term growth versus long term growth. Some could say that there is now some inertia to create sustainable growth – but that inertia is very small in a global context. More than 80% of the world still isn't connected to the internet, which directly impacts the efficacy of the inertia bonfire that some are dancing around.

    In the meanwhile, it would be good if Second Life does grow – but growth is not just a matter of technology and/or marketing (how the two combine so much now!).

  • http://www.your2ndplace.com Taran Rampersad (Nobody Fugazi

    I think that you're right about short term growth versus long term growth. Some could say that there is now some inertia to create sustainable growth – but that inertia is very small in a global context. More than 80% of the world still isn't connected to the internet, which directly impacts the efficacy of the inertia bonfire that some are dancing around.

    In the meanwhile, it would be good if Second Life does grow – but growth is not just a matter of technology and/or marketing (how the two combine so much now!).