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The Second Coming of Virtual Worlds
An anonymous reader writes "Things have been a bit quiet on the virtual world front recently, but according to an article in Silicon.com, things are about to change. Apparently it's only now that virtual worlds are really going to become a force to be reckoned with. 'Now experts predict the virtual world phenomenon is entering a second phase in which businesses will become shrewder about their involvement in such environments and look more carefully at the tangible benefits they can realize. Emerging technology specialist at IBM, Robert Smart, is confident virtual worlds will become more important to businesses in the coming years.'"
businesses will become shrewder about their involvement in such environments and look more carefully at the tangible benefits they can realize
Translation: Business has realized the ineffectiveness of trying to do business against giant penis attachment and furry accessories in a world inhabited by idiots.
It's just that the real virtual worlds are facebook, google docs, myspace, amazon, craigslist, and so on... These don't attempt to copy "real life", they perform new functions that "real life" just couldn't perform.
Someday, we will have much better virtual reality, and then avatar-based virtual worlds will become feasible - because, by then, it won't be about the avatar. But tell me how Second Life will help me collaborate with our team member over in Colorado? Let me tell you, the problem is not that we don't have an avatar to talk to. The problem is that we don't have the rich intersubjectivity, easy transitions between whiteboard, sketchpad, powerpoint, the subtextual awareness of people's available time/attention, the spontaneous conversations that everybody can listen to with half an ear or close their door to, and so on.
Today's virtual worlds simply don't offer that. We're going to need a lot of new tech and interface development. Somehow I don't think exploiting Second Life as an e-commerce channel is going to be a game-changer.
Real translation: some guy at IBM figured out there's money to be made from those who _haven't_ realized that yet. So, in keeping with the tradition of hyping technologies to people who don't actually need them, next you'll see IBM and a few others pitching something along the lines of WebSphere Virtual World Server 7.1 as the second cumming of Christ. To CIOs whose idea of staying on top of their branch is reading lists of buzzwords, from paid-for-PR articles disguised as technology news.
See, there's this funny thing about gold rushes. Almost invariably the only ones who made money are not the miners. It's those who sold equipment and food to them.
A lot of business in the IT world lately is creating your own fake gold rush by PR, and trying to sell picks to some people who won't strike gold because there is none. And this reads like yet another bubble trying to get started. The message is, basically, "OMG, there's so much money to be made from virtual worlds, and there are all these people who'd take you more seriously and give you more money if they could walk into your 3D virtual shop dressed as a furry. But you have to be careful about what virtual world and business kit you get, you know? Get ours." Have you heard that before? Right. A million times, probably.
E.g., Web 2.0: you'd get so much money and be the only ones profitable online, if you only had forums, and tags, and wikis, and supported BitTorrent. 'Cause it's all about empowering the users, baby. Build a better community web site, and they'll just beg to give you their money. No seriously, that's what the Web 2.0 trademark was supposed to mean. Well, until it was hijacked. There wasn't enough to be sold with that idea, so it got hijacked to mean: buy our funky javascript frameworks and servers, and you'll get everyone wanting to buy stuff from you. People only take an e-commerce site seriously if it has a megabyte of javascript per page, ya know?
E.g., portals. Everything has to be done using portlets, and reinvent in Javascript badly the multiple windows and window management that your OS already had anyway. Customers will only take you seriously and give you lots of money if you buy our portlet server. And here's a few strawmen and non-sequiturs about how if it's done with any different technology, it can't possibly be the view and the information that the customer wants. (Confusing content with a presentation layer technology, basically.)
Etc.
So now the next message and bubble will be: do it with 3D virtual worlds! Buy our virtual shop kit, and this time the customers will really take you seriously! Would we lie to you? Again?
A polar bear is a cartesian bear after a coordinate transform.
Has any business, anywhere, recieved any tangible benefit from their participation in Second Life?*
I hear about all these businesses and universities spending so much money on virtual places that are lucky to get a dozen "hits" a month. Are any of these visitors buying a product, becoming more brand-loyal, or spreading the word?
*Linden Labs and Second Life developers not included.
-David
The concept of "pure" virtual worlds (i.e. not a "game" with a massive community) is pure marketing hype through and through, an accidental but inevitable extension of the success instant messaging has had. The vast majority of people find very little use in the concept and even less in the execution. Part of this is the fact that such applications require someone to relatively social and extroverted (to find value in interaction for interaction's sake), yet also find a need to supplement or replace being social in the real world with doing it online. These subsets don't overlap too much.
The reason this doesn't apply to instant messaging is because instant messaging allows people to do much more: they can add coworkers and friends they know in real life, and be able to imitate existing technologies like the telephone they would already use and supplement them with advantages like a more casual environment allowing briefer conversations (also see SMS), and creating grouped conversations. It's form over function - you don't need a "3D world" to do that. So the problem is twofold. If you create a product that uses a new technology, and doesn't need that technology, it's introducing needless complexity. If you create a product that uses a new technology, but fails to extend current technologies, it's a novelty.
Existing "virtual worlds" have two uses: gambling and sex. SL is barren except for the "clubs", most of the others are too. The only thing keeping the concept afloat is the endless cycle of press articles on about how "innovative" it is. Businesses have no sales in these "worlds" because while advertising is something that people accept on TV, if they don't have to go to a advertising area in the game they won't.
The economics of virtual worlds are driven by synthetic scarcity. Indeed, any digital product is subject to imposed scarcity as an infinite amount of copies could be created at practically no cost.
A big difference is that with virtual worlds, copy control and usage control can be enforced more rigorously to drive up prices. This is why you see people paying for virtual gifts on Facebook. $1 for the right to give a worthless icon to a friend. Here, the value of the product is not the product's uniqueness, but the product in conjunction with the limitations of use. You are buying back a freedom that was taken away from you by the implementation.
Second Life allows users to create and sellp roducts and take advantage of the imposed scarcity, but will skim profits by controlling the
conversion rate between linden dollars and USD. It looks like a real economy, but it's more like a pyramid scheme, as the profits will inevitably trickle up. It's like a casino. The house cannot lose as long as people keep coming.
I suppose the positive side of this is that if people are happy spending real money on virtual objects, then they probably have enough money.
A witty
Bullshit. I made a fairly significant amount of money from SL, and I don't do porn, nor even come anywhere near it.
It's easy, I script for money. What I sell is my programming skill, which is the same thing I do in RL.
would love to buy stuff in secondlife or some other virtual world. I mean rw objects, not virtual objects. I can't believe how many geeks here poo-poo the potential, just because secondlife et al haven't done much yet. I'm sure when online stores started, the 3-digit user IDs opined that they'd rather go to a real store thankyouverymuch.
I hate surfing on sites where I have to click through list after list of things I don't want to finally see what I want. In a virtual werehouse, I could clearly see all the hanging signs, fly to the part of the store I need, wave my hand at a poster on a wall, and buy what I want with paypal or some other convenient form of payment. It combines the convenience of rw store layout, quick online payment, and instant access. I could teleport from store to store, listen to music, interact with virtual salespersons when I need help, meet girls (or furries or whatever), and (importantly for vendors) make impulse buys as I walk around. This has the potential to be a much more interesting and fulfilling shopping experience than simply searching through Google Products, eBay, or New Egg.
Tic-Tac-Toe, Global Thermonuclear War, and relationships all have the same winning move.
Quality goods always sell better than crap goods. And quality goods, even in virtual environments, aren't easy or quick to make.
Second Life is a good example. Let's focus on 1 item that's pretty prevalent: Skins. (The replacement flesh coloring.) Crappy skins are cheap. Good skins are ridiculously expensive. This is because it's not easy to make them, even if you're an artist.
The real problem for businesses is not the goods... It's making money from the game. In-game objects don't sell for real money, they sell for virtual money. You can attempt to sell virtual money to other players for real money, but there are no guarantees.
Making promotional items is in the same category. Who in their right mind is going to wear a CocaCola shirt in a video game, just because it was free? The amount of time and money they'd have to invest to get people to wear them would be better spent on real-world marketing instead, and they know it.
I agree that this is just an attempt to hype a market, though. Shouting 'Great things are coming!' usually means someone wishes they were, not that they actually are.
"If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
From my experience, a virtual economy can support itself without any intervention or participation from outside companies. For example, there are lots of people who sell skins, clothing, accessories, you-name-it to the residents of Second Life, and *I* make money by providing business tools to them (for visitor counting/automated greetings/report services/surveys, etc.).
I think Second Life paved the way for bigger and better things, but by no means should it be considered the model for the way a virtual environment should work. The utter lack of an interactive forms API and zero support for interaction with real-world documents (such as PDF, .DOC, Excel, PowerPoint) are big flaws that are already frustrating businesses that try to conduct meetings in SL. And don't get me started about their "land" approach to paying for CPU cycles.
From the outset, SL hasn't been about business. Linden Lab created a barren virtual landscape and has let the residents create just about 100% of the content using a very limited (dare i say "primitive"?) set of tools. It has been a big hippie-furry-fetishfest that has concentrated on bugfixes rather than connecting to the outside world. Considering how long it's been around, Second Life shouldn't still be regarded as a place where cyberweirdos go to get their kink on...and yet it still is very much regarded that way by even hardcore geeks.
Now that Linden Lab is starting to realize that their talk of SL as a place for serious business isn't just the hot air even *they* thought it was, they're trying to turn the ship around with some meager business-related integration. Fortunately for them, most other tech companies have watched them struggle and have stayed out of the game.
Over the past two years, I've conducted close to 50 lectures and business meetings in Second Life. This has save me time - I can easily appear "live" to an audience half a world away without the attendant cost of time to get there - and it has saved IBM money - I'm shipping my bits, not my atoms. I created an avatar that looks very much like me in real life, and by using voice inside Second Life, the overall experience for those with whom I interact is close enough to real life to be good enough for real business use, especially given the economic benefit. Before the end of the year, I'll have started a virtual office on one of the IBM islands where I'll be holding regular office hours - something that many Lindens already do - for we do have an in world community that spans the world, and this will actually extend my reach.
So, it's not about the economics of buying and selling virtual things in world; for me, it's using a virtual world as an extension of my real world. Being in world is subtly better than NetMeeting (which works ok for point meetings but not so well with multiple attendees...and besides, I prefer to use real operating systems, so I only have Mac and Linux machines around) and - especially when I'm connecting to places where the network infrastructure is less well developed - requires no special equipment on the distant ends. When all the folks with whom I'm interacting are in world, social interaction carries out much like in the real world, with small groups forming and reforming. This is better than video for me, as it to some degrees encourages serendipitous communication and addresses the watercooler problem.
Lest you think I'm a shill for IBM, please note that I'm only a minor player in the larger metaverse community that has evolved at our grassroots. There's more going on than I can describe here, with regard to IBM's internal use of virtual worlds (as one brief example, we just held our first Academy meeting entirely in world; additionally, given these economic times, a life Academy meeting had been cancelled - but in its place there will be, among other things, an in world meeting).
With growing energy costs, conducting business in world as an extension of the real world is where I, for one, am reaping economic value.