Wednesday, July 18, 2007

Exodus from Second Life

I should start these thoughts by admitting that I have never been a user of LindenLab's Second Life platform, nor do I intend to use this service. Why? Simply because I have the impression that it is all about a virtual environment you can create, without having an equivalence in the real world. Already some time ago, there were comments of the platform being increasingly unstable. It has been observed that the computer manufacturer Dell and hotel chain Starwood already left their virtual islands due to a lack of visitors. But honestly, what could be the reason for me to visit a company's virtual other self? If it's about an Internet-based service, I would probably have a look at their web presence, but what additional use can a virtual island have? I honestly have no explanation.

When it is about community building and information / experience sharing, then virtual communities are a great means of communication platform between singular end users. But when it gets too comercial, then this may mean the beginning of an exodus, such as seen with SecondLife. Of course, that's a personal opinion, but if I want to buy something I will possibly go to the relevant internet shops or auction platforms.

The remaining question, then, is whether the users are going to come back. In June, the number of active users has been decreasing by 2.5 percent, where out of 8 million registered users, only 40.000 are active at peak times. As I read it, the companies' exodus was a consequence of the decreasing number of users. Thus, if this trend continues, more companies are going to leave their virtual residences.

Another way to perceive this, however, is that the companies' virtual representation was not attractive enough for end users. But is this really the case? I don't know, but would welcome any further thoughts on this.

Bottom line, however, is the challenge to link the real to the virtual world in order to achieve a blended experience for end users.

5 comments:

csven said...

"I should start these thoughts by admitting that I have never been a user of LindenLab's Second Life platform, nor do I intend to use this service. Why? Simply because I have the impression..."

Quite right.

I've said the same things about automobiles. I've never used one because I get the impression from all the news shows that people die in accidents at what must be an alarming rate. It's far too dangerous to risk my life merely to get from one place to another. I see absolutely no logical reason why anyone should wish to travel faster than the speed with which they can peddle their bicycle.

People may point out that the reports misrepresent the reality, but like you, I see no reason and have no intention to risk life and limb to learn the truth for myself.

Dr. Matthias O. Will said...

Thanks for your comment, Sven. Maybe the issue is that a virtual counterpart of a real-world entity needs new concepts to represent itself. I read your post from yesterday on your blog, but did not really catch the bottom line.

I do not think I am arguing against modern technology and their wise usage. But then, what is wise? Maybe it has to do something with communication to real-world entities in a world that integrates real and virtual resources. But then, I am only guessing.

csven said...

"Maybe the issue is that a virtual counterpart of a real-world entity needs new concepts to represent itself."

I agree. Which is why I register for pretty much every new virtual world I come across and give it at least a try; There, Kaneva, vLES, aso.

Depending on others to a) recognize potential which might spur such new concepts and b) report in the unbiased manner necessary to best communicate this potential to outsiders, doesn't make sense to me; not when it's as easy as signing up for an email account and coming to my own conclusions.

But before I respond regarding my most recent blog post, allow me to address some things from your entry.

-

"there were comments of the platform being increasingly unstable."

Debatable. Most of the people I see complaining weren't around when the grid was down much more often during one particular stretch of updates over a year ago. So for those of us who've been around, the platform's stability has been better than that, though not without problems.

Hence, "increasingly unstable" is a mischaracterization in my opinion. Increasingly unstable over the short term; most likely due to the huge influx of users and the way Linden Lab set up their asset server, but not in general.

-

"computer manufacturer Dell and hotel chain Starwood already left their virtual islands due to a lack of visitors"

And both companies have gone through major changes recently. Dell cut back severely when the founder took back the reins, and Starwood's arguably visionary CEO abruptly resigned (apparently due to the previous CEO's efforts). I fully expected both companies to pull out under all the circumstances: their questionable approaches to SL and their real world problems.

In other cases, I know from my own confidential sources that problems came not from the corporate side, but from representative advertising agencies which had no experience with Second Life or virtual worlds in general, but who exerted absolute control (reminds me of my experience in the military when some enlisted men came to me laughing about how one of my fellow officers - fresh out of school - showed up ignorantly barking orders; and how they obediently followed those orders to both the officer's and the Captain's dismay).

-

"what could be the reason for me to visit a company's virtual other self?"

That, to me, is like asking: why bother using the internet when you can go to the store?

Conversely, why go to any brick-and-mortar store when you can order online?

The answer would be to get a better sense of the product; an appropriate sense. In some cases, all people need is a little image and the price. They may be familiar with the product and so don't require any more information. In other cases they may need to go and touch the actual product. For example, most people probably want to test drive a car before purchasing. They want to Experience what that particular product feels like; not some simulation.

But then there are other cases where something more than a simple image and less than the real thing are both sufficient and convenient. Further more, they might also be more informative. In a virtual/augmented world, I can examine the product in detail that's impractical with the real thing. A prospective buyer might want to simulate something (e.g. how to replace batteries or ink cartridges or oil pans). I can only imagine the local car dealer consenting to my asking to test spark plug replacement on their lot.

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"I would probably have a look at their web presence, but what additional use can a virtual island have?"

Humans are tactile and we obviously exist in a three dimensional space. When the first online stores popped up the world was full of critics claiming no one would buy something they can't touch and feel (even though most people don't actually test a product at the store). Now people buy all sorts of things online; from drugs to clothing. All of it essentially sight unseen. Just a little jpg image and some text.

Imagine if you could provide people with more. And imagine that instead of looking at it in isolation, as you do when surfing to a website, you could contact an old friend living in another country and both of you could go to a virtual store, examine the product, and discuss it not just between the two of you but with other "shoppers". A social experience.

-

"when it gets too commercial, then this may mean the beginning of an exodus
...
whether the users are going to come back
"

Who said they left???

-

"In June, the number of active users has been decreasing by 2.5 percent, where out of 8 million registered users, only 40.000 are active at peak times."

There is typically a decrease in the Summer. That's partly why so many of us familiar with SL expected this downturn.

Additionally, there are not 8 million registered users. There are 8 million registrations. How many email addresses does the average person have with Yahoo? Gmail? Same difference.

Furthermore, for a long time, it was to a person's advantage to register three times (but you'd have to have tried SL to know that and understand why).

Consequently, the 8 million number is worthless.

As to the 40,000 number, there's also more to that. First off, Linden Lab... unable to keep up with the exploding population... instituted a concurrency cap. For a while it was around 30,000. They announced that when the load got too heavy, those without some kind of verifiable registration information on file would be logged off.

Over the past few months, as Linden Lab has been working to ramp up, the cap, apparently, has been rising. They may have lifted it entirely, but I don't recall reading that they have.

In any event, the number to watch by most accounts is the 30-day log-in number they provide on their site. That's at around a million right now (higher than I last recall, actually). And a report released yesterday indicates that those who are involved with SL are generally *very* involved and extremely engaged. They're not going anywhere. At least not until something better comes along. Nothing has.

Yet.

-

"the companies' exodus was a consequence of the decreasing number of users.
...
Another way to perceive this, however, is that the companies' virtual representation was not attractive enough for end users. But is this really the case?
"

The companies are leaving because it appears there is insufficient traffic to their isolated islands. They expected more eyeballs and discovered that they had to do more than just build a store out in the boondocks.

In the meantime, Coca-Cola has done what I always assumed to be the obvious approach. My only surprise was that it was them.

As to how Coca-Cola leverages their trademark approach, that's still to be seen. One thing we do know however: it'll be difficult to measure the impact.

-

Now back to your comment.

The bottom line to my post "What If and What Then?", is that companies are unlikely to find a solution without a few failures along the way, and blaming their lack of success on anyone but themselves is a cop out.

Comments such as "These people don't want real world brands" is completely inaccurate; it's an excuse. It's a way to save face for what can only be called a series of embarrassing failures be those who made a big show of jumping into Second Life and spamming the media with their PR blather.

Long before Linden Lab made it clear companies could enter Second Life, real world trademarks were everywhere. Some of the most popular in-world businesses were using appropriated brands. Toyota, Nissan, Gucci, Calvin Klein, Levi's, Apple, etc etc. If you were to search for those now, I'd venture you'd find some. So that's not the issue here.

Consequently, simply packing up and chasing the next internet fad in hopes of leveraging previously successful marketing methods is not the best long-term strategy, in my opinion. This technology isn't going away. And if anything, as technology improves and content creation becomes more labor intensive, costs will increase. One would think *Now* is the best time to learn how to operate in these new spaces.

That's why I can be critical of SL, but still advise companies to give it a try. This should be R&D opportunity for them; not a marketing channel play.

-

Just yesterday I received an email from a large multinational's representative asking me about a different kind of technology; something that's actually geared towards PLM and not online virtual worlds. I informed him I didn't think it was of any current use to them. However, I also told him that I've often mentioned PLM (on my blog) and that I expect a convergence between it and the kinds of virtual world social platforms we're seeing at the consumer level.

Such a convergence would lead to compelling virtual world-real world connections, possibly including the kind of future online retail system I once outlined in a blog entry.

In the event you're unaware, I can currently create a 3D object inside Second Life and manufacture that thing as if it were going to be sold at Wal*Mart. I've demonstrated the potential and blogged about it. Nothing complex, to be sure. But that was two years ago, and I could do something more complex today than I could then. Significantly more complex.

So that's where I see us headed. And now seems as good a time as any to develop concepts for dealing with this new (virtual) reality.

Besides, Second Life is free. Anyone can set up a store with absolutely no investment other than their own time and effort, which admittedly might be an issue for some. Even so, I call that a bargain... and a way to get beyond excuses for failing.

Pyrrha Dell said...

Just wanted to stop by to clarify that Dell has not left Second Life. We've recently added a new StudioDell theater to our space there; and, as Neville Hobson recently blogged about (http://www.nevillehobson.com/2007/07/17/dell-to-offer-customer-support-in-second-life/), we're preparing to begin regular office hours to provide increased opportunity for interactions in Second Life.
While we're still experimenting and learning, I do continue to believe there is much opportunity with virtual worlds.
~Laura Thomas/Pyrrha Dell

csven said...

@Laura - I should have known to verify that. Apologies for not catching it.

I will say that I rather liked the Dell connection to real-life ordering via the make-your-own PC (very fab-on-demand; which is my particular interest), but I didn't find much in the way of community outreach. For example: why not set up an in-world reseller program for Alienware machines and let residents set up their own businesses with Dell as the supplier? There are plenty of people who would jump at that opportunity, I suspect. And from there you establish a virtual beachhead on the main grid where there is worthwhile traffic (and you can get your metrics directly from the Alienware products being resold).

Just a thought.

Anyway, thanks for correcting us.