Second Life

Virtual Worlds: Hype or Here to Stay?

For the last little while my interest in virtual worlds has been growing.  Having spent countless hours playing games like The Sims when I was younger, I can easily understand their appeal on a gaming and entertainment level. My real curiosity, however, is whether they will play a key role in the next phase of social media. My original inclination was heavily weighted towards 'No'. There have been a number of companies, law firms, and banks experimenting and opening offices in virtual worlds, namely Second Life. To the best of my knowledge, many of these have since shut down because their virtual offices were too timely to maintain and, after the initial buzz had died down, they failed to see any inherent value in keeping them open.

That said, the more I learn, the more I understand how virtual spaces may become extremely valuable going forward.

About a month ago I attended Digital Theory's "Playing to Win: Broadcasting and Social Media event, which featured a presentation by Valerie Williamson, VP of Marketing and Business Development for the Electric Sheep Company.  Electric Sheep built a name for itself by creating virtual worlds for a number of different companies. Valerie explained that instead of using two dimensional applications like Twitter and Facebook, younger generations have been raised on virtual games where they create 3D avatars to co-exist with their 'friends'.  She believed strongly that this was the future of social media and online engagement, and the direction in which we are headed.

These Experiences will occupy a previously barren portion of the Engagement Plane

If what she claims is true, what will the future look like? To begin answering this  question I looked at what organizations are currently doing to tap into this market.

Some brands such as Disney's Club Penguin and Webkinz have built their own virtual worlds, and experienced success by providing a new, rewarding form of entertainment to children. These sites are able to monetize without the help of advertisers, leveraging product sales and/or membership fees.

PepsiCo. Virtual Hills Other brands such as PepsiCo. are using the popularity of worlds  that already exist to market their products .  This can take the form of advertising within the VW, or selling virtual products to benefit the world's citizens.  PepsiCo. launched into this model last year by sponsoring vMTV's Virtual Hills. They have  since reaped branding and reputation benefits both on and offline (further outlined in Ad Week's Case study: vMTV's Virtual Hills Makes Pepsi Cooler).

Role playing and video games such as World of Warcraft, Counterstrike, and the Halo Trilogy have maintained popularity with slightly older generations (many of my friends included). These games have made significant earnings through subscriptions and virtual product sales. WoW alone makes up half of Activision/Blizzard's earnings, proving VWs to be a highly profitable model.

Although the above examples are largely entertainment focused there are many other useful applications of virtual worlds being explored.

At Mesh09 the #MeshLearn session  focused on education. Although virtual worlds were strangely absent from the conversation, the panel did state that the education sector in the US is larger than both the military and finance sectors combined. If this statement holds true, it is certainly a huge market.  In response to growing demand from educators, Activeworlds launched educational settings a few years ago, betting that virtual worlds will start to play a larger role in the development and education of children and university students.  With this tool, teachers will be able to develop new concepts and learning theories not possible in a regular class room setting.

Virtual worlds are also being used for collaborative learning, allowingRatava's Line students and/or professionals to engage, learn, and share over large distances. In 2003 students from three universities developed a fashion line (Ratava's Line) and show rooms using collaborative VWs. In a final report, students described it as  "a perfect medium to marry culture, collaboration, visuals, 3D, and social spaces" .  Collaborative VWs can easily translate into other business settings as well ie. training, safety, architectural design, business strategy, etc.

As the economic downturn continues to rear its ugly head, we will likely see more companies taking advantage of VWs to host job fairs. Dennis Shiao's Blog Post "Economic Downturn to Spur Virtual Job Fairs" does a good job of outlining reasons for this growth.

Given their collaborative nature, popularity with younger generations, and ability to adapt to a wide array of applications a strong argument can be made that virtual worlds are here to stay (and may even be highly profitible).

I'm interested to hear any of your thoughts on the business of virtual worlds - do you see them as the next wave for social media? Or just a lot of hype?

Low-tech Campaigning in Japan – Use Second Life Break the Law

If someone asked you to freely associate things with Japan you'd probably think of futuristic high-tech, bullet trains, cyberpunk, anime and all the fancy gadgets we always seem to get years later. But of all countries it's Japan that campaign wise is still stuck in the middle-ages:

It's a first for Japanese politicians — and perhaps illegal. In his bid for re-election, upper house member Kan Suzuki has opened a virtual office in Second Life. He plans to use SL to discuss policy and field questions. Hence, the problem. Japan's fifty year-old Public Office Election limits election campaigns to using only postcards and pamphlets. See, they didn't have Second Life fifty years ago. But! Even recently officials have ruled that web pages cannot be created or updated during campaigns. Suzuki's campaign is venturing into uncharted territory for Japanese politics, which is still based on white gloves and campaign vans.

Makes me wonder how they handle blogs of politically interested citizens who follow the campaigns and publicly exchange their views with others – would updating their blogs during campaigning be illegal as well? Could campaigns pay people to pretend to be independent while they support their agenda? Has Japan heard of astroturfing?-Jens