The joke here is the efforts of commercial enterprises in Second Life. There was a rush several years ago to enter virtual worlds. Many so-called experts proclaimed it to be the wave of the future and claimed that companies must take advantage of this revolutionary platform before they are left behind.
Several companies did try…and they failed miserably. They failed to understand the complexity of this new world. The platforms are still immature and conventional wisdom cannot be applied to a world unrestricted by the confines of natural law.
A lecture provided by Neil Hair showcased the evolution of internet marketing, a field that is still raw because of the continuing development of the internet. Some companies have had success with the internet, but a clear cut model is still far from being complete.
Without a clear understanding of how to take advantage of the internet, several companies delved into the world of Second Life. They faced many difficulties. They didn’t understand the new world they were in. Some of its constituents were unhappy with the prospect of “evil” companies invading their space. Virtual worlds had technical and user issues abound with inadequate resources to address them.
Virtual worlds failed to retain any significant growth. Linden Labs, for example, uses suspicious statistics to describe its user base. Upon opening the viewer program for Second Life, I am greeted with an interesting statistic describing users online for 60 days! Why 60 days? They proudly proclaim the large number of residents in Second Life which happens to include anyone who had created an account regardless of whether they had stayed 60 seconds and never came back or returned every day.
I do admit that the allure of the virtual life can be strong. I am fascinated by the creations within and the ingenuity of its dedicated user base. A strong argument cannot be made for companies to fully engage with virtual worlds unless the core issues of virtual worlds are addressed from server-side hardware improvements to user interface improvements.
Why did the companies go all out when they entered Second Life? The Xerox site was once fully developed but is now a bare island with a billboard to let you know that they still own it. American Apparel exited after a “terrorist” attack left some of its constituents “dead.”
There are plenty of people in Second Life who have had commercial success. These “natives” have been able to parlay their talent into a viable commercial scheme because they understood their populations. The entrepreneurs even carry influence within Second Life.
If a company wanted to enter Second Life, I say that they must engage the entrepreneurs of Second Life. They should form partnerships or joint ventures within Second Life to leverage the expertise of the natives with the products of the companies. Yes, this does mean losing some degree of control but it reduces the barriers to entry significantly. Entering Second Life this way minimizes the exposure of the company due to a lack of understanding. As with any partnership/joint venture, the company can use this cooperative agreement to acquire the knowledge and insights that have escaped them.
They can make an agreement to host select items within certain stores in exchange for a cut of the profits or a sponsorship deal. Eventually, if the virtual words do take off into the mainstream, the companies can leverage their newfound knowledge into a proper standalone entry.
The execution of this suggestion is very dependent on several items. First and foremost is the legal status of virtual worlds. The application of the law is still murky. Individuals from all over the world use virtual worlds and the laws of their respective nations become unenforceable across borders without a real-life agreement between national governments.
Another item of concern is the willingness of the owners of virtual worlds to enforce necessary rules such as intellectual property protection. They would go a long way by enforcing rules protecting creators throughout the virtual world. To do this, they would have to expand their workforce to be able to settle such matters within a reasonable time.
It will be a while before real-life commercial entities are able to make virtual worlds viable for them. For now, the virtual world natives are the only ones who are most able to understand their fellow residents and have monetized it accordingly.
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