Gartner: 80% of active internet users will have a “Second Life” in the virtual world by 2012

25Apr07

Gartner produced some interesting research around the hype regarding how companies should participate in virtual worlds such as Second Life and Habbo.

Habbo

First Law: Virtual worlds are not games, but neither are they a parallel universe (yet). The initial reaction of many business leaders when faced with virtual worlds is to dismiss them as a mere “game” of no benefit to the enterprise and something to be banned for wasting compute resources and time. Many of those that see beyond the gaming elements immediately veer toward questions such as “How do we exploit this as a sales channel?” This reaction is equally incorrect and potentially even more damaging to the enterprise. “Growth in virtual worlds is significant but lower than it appears; the overall population of non-game virtual worlds is still small compared to massively multi-user online games (MMOGs) and the totality of community-oriented and niche-targeted environments,” Mr. Prentice said.

Second Law: Behind every avatar is a real person. Gartner said people can’t be fooled by the fantasy elements in the virtual world. There are unwritten rules and expectations for behavior and culture are developing. Enterprise users must consider their corporate reputations.

Third Law: Be relevant and add value. Many commercial companies have established a virtual world presence, but none have converted it into an effective, profitable sales channel. There has been criticism of early corporate entries into the virtual world, Second Life, related to the showrooms usually being empty and lacking atmosphere. While there have been a limited number of individuals who have earned more than $5,000 per year from their virtual world businesses, most corporations will see minimal revenue gains in the market at this time. “Do not expect to undertake profitable commercial activities inside most virtual worlds in the next three years,” Mr. Prentice said.

Fourth Law: Understand and contain the downside. Enterprises face serious questions, such as “Could activities in the virtual world undermine or influence my organization/brand in the real world?” With significant portions of the virtual economy based on adult oriented activities, questions of appropriate behavior and ethics also arrive. In-world behavior can be a problem in public areas; annoying interruptions can range from unintentional arrivals and erratic behavior from new residents whose avatar control is still suspect to misdemeanors such as graffiti, to more-concerted protest activities designed to disrupt.

Fifth Law: This is a long haul. Today’s multiplicity of virtual environments has developed through the convergence of social networking, simulation and online gaming. There are many new entrants, whose stability and scalability are not yet established. There is significant probability that, over time, market pressures will lead to a merging of current virtual worlds into a smaller number of open-sourced environments that support the free transfer of assets and avatars from one to another with the use of a single, universal client.

Second Life

My take on this is slightly more cynical and pragmatic…

Virtual worlds, communities and nations are here to stay. Whilst emerging media is exploring new ways for companies to interact with their target audience, businesses must be careful not see this as another outlet where they aggressively sell.

Users go to these sites often as a form of escapism and would probably take a negative reaction where vendors try and conflict with this. However, this can be done well – take Toyota selling their cars on Second Life as a great example of complementing a virtual world rather than fighting it.

Even though Gartner suggest this is a “long haul”, there is a lot to be said for being early entrants into a market. My advice would be to start now but passively.

Also – don’t get hung up on the main avenues. Technology is changing fast – who knows what new scenario will be the best place to virtually hang-out in a few years time. Have a plan that is flexible and go for it.

Nevertheless, Gartner have made some sound suggestions that would be foolish for any would-be vendor in the virtual world not to follow… but perhaps they should use mine too.

 

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3 Responses to “Gartner: 80% of active internet users will have a “Second Life” in the virtual world by 2012”

  1. Hi Jonny,

    I completely agree with you on this. But then, now that everything is going the ‘virtual way’, we can only wait and see as to what is going to happen in reality!


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