Businesses not stampeding from Second Life

by Tateru Nino Dec 7th 2008 at 10:00AM

Filed under: Opinion, Second Life, Virtual worlds

While the media focuses on a few high-profile business departures from Second Life, it isn't fair to assume (as many writers have) that businesses are stampeding out of Linden Lab's virtual environment. If anything, business use of Second Life continues to surge, but it isn't the same kind of usage. Indeed, the sort of usage that is in decline is the sort that can barely be called usage at all.

Much of the sort of business usage that you've heard about through the media are self-promotional usages. Sites intended to boost the image of businesses such as Comcast (mistargeted) or Wired (no target) have largely fallen flat. There are more enterprises using Second Life. They're just not the uses that you normally hear about.

The primary business usage of Second Life as it stands today is collaborative usage. These are businesses that aren't issuing press-releases, aren't claiming virtual-environment 'firsts' (falsely or otherwise). They're serious organizations using the virtual environment for their own benefit, on their own schedule and they're not making noise about them.

SME's, universities, colleges, training groups and health-care providers are all deriving benefits from their usage of the virtual environment and few of these successful models rely on drawing the interest of Second Life users at large or drawing large quantities of eyeballs.

The number of educational institutions operating in Second Life is literally countless. It's a mammoth task just trying to total them all up -- and by the time you're done there seem to be more of them than when you started.

The notion that there's some sort of collapse or widespread flight of business and enterprise usage within Second Life (like cockroaches fleeing from bright light) seems to be little more than media fabrication.

Every month we hear from an increasing number of business people in Second Life -- people whose businesses are using the virtual environment to derive direct benefits or figuring out if or how it makes practical sense to use Second Life within their own organizations.

Not all of them will remain, of course. Second Life, as it currently stands does not yet necessarily constitute a useful solution for every organization, but at present it appears that more businesses are coming in than going out.

Are you a part of the most widely-known collaborative virtual environment or keeping a close eye on it? Massively's Second Life coverage keeps you in the loop.

Tags: comcast, mass-media, opinion, second-life, virtual-worlds, wired

Reader Comments (Page 1 of 1)

Robbie Kiama said on 10:58AM 12-07-2008

Beam of light in a place lots of people wanted to see as dark :)

Colleen said on 11:20AM 12-07-2008

While we're a little slow, universities are indeed filling in where businesses are receding. Here at UC Berkeley we've been using Second Life to rebuild archaeological environments. It's a lot of fun and we can do things to the art and architecture that we wouldn't dare in real life. On Wednesday we're burning part of a Neolithic settlement down. :)

http://middlesavagery.wordpress.com/2008/12/04/burning-catalhoyuk/

Pavig Lok said on 11:29AM 12-07-2008

With competition from Playstation Home and other such social worlds barking at the doorstep of SL they've done well to refocus on business and education this year. It'll give the new players some time to redefine the market while LL concentrates on next steps.

From most of the reports I've heart though, business and Edu entry into SL has been predominantly on an experimental basis. Very few players have come in with a long term virtual worlds strategy tied to SL - instead they've come in testing the waters with pilot projects.

I have no doubts that we'll see solid business uses emerge out of this, but if AVWW banter was anything to go by SL (and virtual worlds in general) are still seen as an emergent technology, not quite ready for the mainstream. I have no doubt some folk have cast their vertict, but my impression is the majority of the jury is still out.

Ellie Brewster said on 6:56PM 12-07-2008

I must say, Tateru, your articles are always concise and informative. I never miss reading your blog. I really like the way you clear up the media fog around Second Life in this article.

Thanks for the hard work

Diva Regina said on 2:38PM 12-07-2008

This article is something I've been wanting to see for a long time. Second Life is great for learning, doing and inventing; not selling, pushing and persuading. Business who want to do the former (or, better yet, already know how and are ready to find new and better ways) are making the most of it.

sigmund leominster said on 5:15PM 12-07-2008

Bad news sells better than good. People love to read about other people in trouble, hence the tendency to focus on failure. Of course, we shouldn't be surprised that businesses fail in the Second Life environment. As I reported in "SLentrepreneur Magazine (http://www.slentre.com/second-life-business-only-10-of-real-life-businesses-succeed-in-second-life/) back in May, only 10% of businesses actually succeed, so failure is the norm! Furthermore, the death of Linden Lab continues to be predicted on a weekly basis (http://sigmundleominster.blogspot.com/2008/12/more-on-impending-doom-or-end-of-world.html) yet the company is still running.

No-one is pretending everything is rosy, nor that LL get it right all the time. However, there are certainly more Jeremiahs out there than Dr. Panglosses and doom and decay still thrills us all.

Rik Riel said on 5:18PM 12-07-2008

I think your argument is a correct one about SMEs and individual entrepreneurs making great strides in SL outside of the limelight. But I think you are going to need more data or anecdotal evidence to back it up to convince outsiders of this.

Any business owners in SL want to spread some knowledge about how it has benefited your company in the past year?

Rocky Maddaloni said on 5:59AM 12-08-2008

We have been in Second Life for almost two years and are using it for training, meetings, and social networking. We were the first CPA Association to get on Second Life and find it a great platform for training. Check us out at http://www.cpaisland.com. We are just getting started...

Ecocandle said on 8:16AM 12-08-2008

I have been to CPA Island that Rocky mentions. Dr. Michael Kraten, a professor from Suffolk University, has used this space for holding several of his classes and I have had the pleasure of giving his students several tours in SL. It seems to me that CPA Island has figured out how to have a space that is a useful tool for its members.

Iian Beaumont said on 2:16PM 12-08-2008

This seems like a common sense article. However, it is missing any actual metrics to back up the premise.

Let's posit that you are correct and "The primary business usage of Second Life as it stands today is collaborative usage." Such use would seem to be enough for Linden Labs to build a marginally business on for the moment. That begs the question what does this do for the overall economy of SL?

I fail to see how self contained usage by business builds brand loyalty in SL. With other virtual worlds poised to enter the virtual world market at a much lower user cost, how will LL prevent flight to other systems?

The challenge for LL is to make the entire
SL economy more relevant to business and personal users. I see no evidence of a coherent effort to provide that relevance for the future of SL. That lack is a primary reason we continue to see stories of the impending failure of SL. There is no alternative vision or narrative being provided.

Tateru Nino said on 10:00PM 12-08-2008

Oh, it's anecdotal certainly. I said so in other words in the article itself.

A scientific study with hard and comprehensive data would certainly be superior, but we don't have one and aren't equipped to perform one -- so we're going with the data that we have, aggregate impressions and trends from the messages and feedback we get.

We usually find that those are very effective indicators, given the volume of data and experiences that we receive.

Jay said on 5:24AM 12-11-2008

In other words... You made it up?

Tateru Nino said on 6:29AM 12-11-2008

Why, no. Perhaps you'd like to read it again.

Jay said on 2:00AM 12-12-2008

"aggregate impressions and trends from the messages and feedback we get." do not make for hard numbers, they are gut feeling, made up figures without a shred of substance.

Tateru Nino said on 2:59AM 12-12-2008

Not the same thing. This _is_ an opinion piece, and it is an opinion formed from the data available to us. Do you have data that suggests a different interpretation? Love to talk about it.

Jay said on 3:37AM 12-12-2008

"This _is_ an opinion piece"

Yes, *your* opinon based on the little data available to you... which you back up with nothing.

You *claim* businesses are still flocking to this dead game platform but you offer nothing - not a single fact - to back up your made up figures.

SL is a has been, and any business worth it's salt would realise you can't collaborate properly in ***A GAME***

Iian Beaumont said on 1:40PM 12-12-2008

Tateru -

My central question remains.

What is the impact on the SL economy and SL culture when "serious organizations [are ]using the virtual environment for their own benefit, on their own schedule " and are seemingly not actively participating in the SL economy or culture?

Are you saying SL is becoming distilled to private insular enclaves with little or no interaction?

Tateru Nino said on 9:55PM 12-12-2008

Strictly speaking there's either no effect or a slight positive effect. The numerical majority of IBM's employees (for example) are non-participants, not using SL for anything outside meetings and training sessions.

However some few *do* participate, and some of those contribute significantly both to culture and to the economy.

If we were to assume that the percentages hold true across the hundreds of universities, colleges and SMEs, then the overall effect should be somewhat positive. Individuals socialize, have fun, explore, purchase (or grief) -- whatever it is that people do, each according to their nature.

If we assume instead that there's no participation at all, then there's no negative or positive effects on the economy or community. Just a net gain on Linden Lab's bottom line.

sigmund leominster said on 10:34PM 12-10-2008

So why is there a need for "more data" to support claims of business success in Second Life? The recent departure of ONE business - Reuters - has been done to death as "proof" that Linden Lab is and Second Life is about to collapse. And ONE article by Eric Krangel, the dearly departed, has been touted as the new gospel for what is wrong with Second Life, when in fact, it's just the opinion of a single disaffected individual who has changed jobs.

Seems to me that there is only a need for "data" if the story doesn't fit the already decided outcome. The received myth is that SL is doomed and anything that supports this premise is "data" and anything else "needs to be supported."

Gwyneth Llewelyn said on 4:26PM 12-14-2008

Tateru, thank you very much for this article manifesting your *opinion*. :) Oh yes, I'm sure that the doomsayers will pick on each and every anedoctal example ("hey, I just saw one company leaving SL! Their island was still up yesterday, but it isn't there any more!") to use as "proof" of the Ultimate End of Second Life.

But it's hardly so. It might be surprising — it certainly has been for me! — to see how quickly, in about a year or so, companies got more _savvy_. They now do regular expectation management, instead of throwing money at ideas and hope the media talks about them. They also focus on things that SL is good for, instead of thinking about absurd uses for it. Sadly, a few good ideas — like customer polling of tastes in colours and shapes of products — were too prematurely experimented, and surrounded with so much hype. The ideas were great, the expectations were, however, set too high.

These days what I mostly see is companies picking at two major uses besides the ones you've already described (ie. collaboration, training, meetings, seminars, e-learning, etc.). One is definitely community generation. I guess some have started to read the right books — or they already have experience in managing their user community, and find that SL is the place to push them into.. The other is simulating product evaluation — with lots of metrics thrown in to see what people find interesting or not — but due to the failures in the past in that area, they are very careful in what they show.

Brand awareness is still in the minds of the companies coming to SL, of course. But you're seeing more things like Orange Island — focus on a certain type of successful resident-managed event and just sponsor it to raise awareness to _your_ brand. This means things like real life football (soccer for you Americans) clubs sponsoring the intriguing SL Football league. Or poetry circles sponsored by associations of fans of a certain author. Or fans of a certain car brand coming together in SL to join parties — and discuss the new launches of future cars with some of the designers. All these are "silently ignored" by the media. And they're plenty around.

Another change is the end of the "Multimillion Second Life Project". Impressively, companies were *very quick* to understand the harsh lessons of the dot-com bubble. It's worthless to spend millions in something you don't know how to get a return back. Instead, spend thousands, or, at least, dozens of thousands. Crude content is cheap. Investing in the community pays off all the time. Creating your own team to engage with your community in SL is even better. All things that were proclaimed as the "secret to success in SL" back in 2006/7 (and which companies have neglected) are suddenly quite high on companies' priorities. Media splash is *not*.

I won't underline the role of universities in SL these days. As reported, there are simply too many; and too many projects, too many students, too many researchers, too many conferences. In some cases, presenting something which has "Second Life" in it becomes almost a *banality*. You almost *expect* it in the course of a lecture. Even more interesting, universities are now focusing less on "how cool this brand new technology is", but much more on "how I've used this technology to do my cool project".

But not all universities have grasped SL and understood its potential. Ironically, one of my old teachers told me how he thought I was "wasting my time" by investing in virtual worlds; that a week after my application for a mastership (done remotely via SL, of course, and it's obviously one about SL) has been approved. So there are still quite some "old-timers" not understanding what is so cool about SL; others, no matter their age or their background, have suddenly be given the ultimate tool to break all barriers of distance, and focus on what they're good: producing *content*, which is, ultimately, what a university is supposed to be doing. SL is just one of many platforms that allows this content to be accessible in another form, distributed world-wide, and places no physical constraints on the recipients of the content — no matter where they are.

No wonder they've embraced SL so quickly and thoroughly.