It will not have escaped your attention that the popular press and television has been extensively featuring the 3D virtual world at Second Life. Interest from the media is mainly because many of the world's top companies have established a presence in Second Life to experiment how to position their brands to a new generation of consumers.
What may not be so obvious is that, as in many other Web Technologies, there is a serious business use emerging. Think about simulation, training to engineering design, perhaps even to pilot a mock up of an exhibition stand. China has announced it will support a Virtual World for millions of its citizens as a way to overcome physical infrastructure and its limitations in the country.
Inspired by the recent seed by Deep Thought on the projected growth of Second Life , coupled with some of the seeds that I have had here and deep interest in this space, I would like to touch on my perspectives of Virtual Worlds and the impact they are making from technology, business and social perspectives.
IBM and MIT recently co-hosted "Virtual Worlds: Where Business, Society, Technology and Policy converge" which witnessed a strong presence from global corporations spanning many industry sectors. From Bank of America to BMW and GM to Target. Toyota said they are investing six figure sums to reach what they claim are the next generation of consumers in their own environment.
Virtual Worlds are creating massive (some argue disproportionate) interest currently. Second Life, clearly the most popular, is home to nearly 100 global (or major national) enterprises in addition to 4.5 million registered citizens. But the impact has already crossed beyond people and businesses. Why, even the Swedes have their own embassy! CyWorld is used by 80% of South Koreans under the age of 20. The Chinese announcement will attempt to reach out to some 150 million people. To keep up with everything you ever want to know on Virtual Worlds (and are not afraid to seek), Reuters has its own bureau in Second Life, and its business reporting service is at Second Life Reuters .
"What is a "Virtual World?" is the most frequent question from those who still view the Internet as an alien force. I do not think the question would apply to anyone here, but it is worth some kind of definition. I understand it as a computer-based simulated environment intended for users to inhabit and interact via avatars (and don't we know all about 'em). The habitation takes the form of a 3-dimensional graphical representation of the various aspects of the real, physical world with rules such as gravity, topography, locomotion and real-time actions, with communication (until recently only in the form of text) now being real-time voice communication using VOIP as it becomes available. A Virtual World is a persistent (and pervasive) environment that continues to exist after you leave, unlike a user-defined application.
This type of Virtual World, developed through massive online multi-player gaming, and encompassing role-playing through the creation of personal avatars, was a major part of its initial success and take-up. Popular examples like World of Warcraft, EverQuest, Ultima Online and Lineage need little introduction to most here. The attraction started by Second Life was that it does not involve gaming, but rather creation of a world that develops in response to wishes of its "citizens'' to provide the kind of environment they want to "inhabit". This has led to the advent of a new term, "Networked Virtual Environments" (NVEs) to describe online platforms. Here, participants are immersed in 3-dimensional representations. These are sometimes referred to as immersive environments. NVEs represent the next potential stage of major development of collaboration tools. Especially of note, they offer added value when objects are involved―they can be "seen" more clearly as 3D representations.
Second Life is the easiest to understand commercially. Historical data released by its proprietors, Linden Labs, shows it has nearly 2 million active users ("residents" who have been there in the last 60 days) and sales between residents. It uses its own unique currency, "the Linden". A Linden had a fluctuating conversion rate of between 260-320 to $1 USD during 2005-2006. The Linden can be converted into US Dollars by several well known banks. Some (like ING Group) even allow purchases to be made in Second Life on a standard credit card for recharge to the cardholder in its national currency.
Linden Labs makes its money from the sale of "land" to residents who, after purchase, pay a subscription to continue to own the land. It is the owners challenge to decide how to use the land. That runs all the way from individuals creating their own buildings as "homes" to which they invite friends for socializing (or whatever that can lead to) with a consequential market for furnishings, etc. to business use. The most compelling example of the latter is IBM who has over 5,000 employees working in Second Life. The Second Life economy in 2006 was estimated at more than US$600 million by an analyst tracking Virtual Worlds and its growth. Most of you will be familiar with the case of the Chinese woman who is a real life millionaire from her Second Life income. Serious money indeed for any world, especially one that is Virtual!
A quick round up of activities across industries hints at a variety of reasons for the growth of, and presence in, Virtual Worlds. Automotive is a good one to study with most global brands already present. General Motors, Nissan and Toyota were early adopters of the ability to offer test drives which in reality were more like driving games. But this has now broadened into making Second Life a part of the overall marketing mix complete with links into first world activities such as this example into a mainstream UK Newspaper The Telegraph . The use of Second Life is rapidly becoming an industry-wide shift driven by experimenting with new ways to use 3D experiences to interact with existing or potential customers. For the automotive industry with tangible physical products it is the addition of 3D to represent their products on the Internet that provides critically new capabilities.
Launches of new models are made at manufacturers' sites in Second Life in the same manner as at their own physical premises. This includes "free gifts" to encourage visitors to attend a given launch. Mercedes launched their new C Class on Second Life with visitors who registered and visited being offered a free set of Mercedes Racing overalls complete with a helmet for their avatar to wear. Neat and almost totally free of cost, it doesn't need a degree to work out the potential of marketing and PR from that alone! Marketers say that the issue is how to market to, and engage with, a generation that has grown up with gaming and being online as a major source of their entertainment and information. On Second Life they can now buy the car of their choice as a 3D model that they can use to drive around and visit different locations in the Virtual World. Even when they may not be old enough to do so in their real lives, when they are, guess where these guys are going to "drop in" for their first "real life" test drive?
Johnson Controls sees a different approach. When you have a 3D representation of your real life house created in a Virtual World, you can access it from anywhere in the world via an internet device. That way, you can check to ensure that everything is in order. You can also adjust the heating, reset the alarms, etc. Who knows, if all else is easy to hand, you could even order that robot to dust off the covers, start the slow cooker and open the vino tinto for your impending arrival in a few hours! Consumer companies are experimenting how to extend the rapid growth in "social networking," (now that's very familiar) into something that connects to their "brand," and its use in a Virtual World.
To summarize, there is a strong belief that Virtual Worlds will develop as the medium in which the current "Internet Generation" will increasingly combine various aspects of their lives as they link social networks to gaming, to making choices on what and how to buy. Come to think of it, the title of the MIT and IBM event was well chosen indeed. In the seed by Deep Thought, Linden Labs suggest that Second Life will dwarf the Internet in ten years. I wonder. I wonder if Virtual Worlds will actually make the Internet as we know it now largely redundant. Welcome to the future. Welcome to the 3D Internet. One day, we will be engaging on hot topics on Newsvine in a Virtual World. And if I don't much like the sound of your tone in a heated argument, I could just be able to show my contempt and pour some paint on your avatar. Or alternatively, we could have a Group hug in a VineMeet somewhere in a tropical island.
Give me sunshine; give me hope. What do you think?




