Second Life Business: Nothing Virtual About It
Business Week has an interesting article about the challenges faced by “real-world” businesses setting up shop in the virtual world of Second Life. The piece is perhaps the most forward-thinking of any that have appeared so far in the popular press, as it acknowledges that large corporate interests are beginning to view Second Life as a viable marketing platform (though one that still stands a chance of collapsing down the line). It’s nice to see an article like this quantify some of the work that’s being done: contracts to virtual world services companies are being let for anywhere from $5,000 to $400,000, according to the article, with some perhaps reaching as much as $1 million. It also doesn’t treat the virtual world as an “us and them” proposition, correctly so. The idea that there is a community of Second Life residents that are somehow separate from people who live in the real world is one that will have to go out the window if the virtual world continues to grow. It will still be possible to form communities on the Grid that are somewhat walled off from real-world concerns, but if you’re competing for business from “real-world” companies, you’re now swimming in the ocean, not the small pond that SL has been until now.
For small developers, that’s not as bad as it sounds. Small shops will still be able to find clients, just as small Web services shops still make a viable go of it. This will only become more true if more and more people take up residence in Second Life. But the larger virtual world services companies are leveraging the crossover between their expertise in the virtual world and the needs of real-world businesses in a way that’s making Second Life a more and more seamless extension of the World Wide Web. Business in Second Life is no longer a matter of the virtual versus the real, but Second Life, like the Web, is still a place where niche offerings can garner a wide following. The rising tide of people and corporations flooding into Second Life will inevitably lift everyone’s boat. And that’s a good thing.
Walker, in RL, there are big multinational companies in the city and little dinky mon-and-pop stores in the village. The disparity in their incomes is just a fact of life, having to do with history, size, location, skills, connections. Yet the infrastructure of real life — its checks and balances, its political systems of say, democratic representative government, means that the little guy isn’t overwhelmed by the big guy when it comes to the other features of real life — access to education, health care, transportation, etc. The aggregate of the little guys in an open society can equal the power of a multimillion dollar giant. The changes affecting a little pond faced with an ocean are also mitigated by the RL factors of time, geographical distance, and all kinds of check gates.
What happens in Second Life is more akin to the process of the World Bank colluding with the Government of China to put in a huge hydoelectric dam that mainly lines the pockets of the government and its selected state industries, as it floods little Tibetan villages and rural mainland towns. See the difference? And in SL, the process happens with extraordinary force and velocity.
The check gates and buffers that exist in RL in meatspace are absent in this experiment in a virtual economy online. One minute a prim shoe craftsman could charge $100 L for her avatar loafers, and the micropayments she earned could not only pay the Linden’s fairly steep tier costs even pre-Nov. 1, and her earnings could be a part-time RL wage enabling her to stay at home with kids; the next minute Adidas moves in and either doesn’t have to charge $100 Lindens or doesn’t have to survive off the micropayments because for Adidas, SL isn’t a wage-making device but a public-relations machine that handily fits into a large corporate marketing budget.
Surely you can see that — the *velocity* with which this occurs demolishes the inworld economy.
The idea that this rising tide will float everyone’s boat really remains to be tested, than delivered to us in the form of a homily. The tide didn’t rise anybody’s boats yet, Walker; so far all it did was raise the Lindens’ island prices.