Second Life

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Second Life, and Maybe a Third or Fourth

Robert Holden

Following the success of Second Life as a virtual destination for millions, many big name companies including Sony (SNE Quote) and Lego are trying their hand at establishing their own digital world, setting the table for a potentially fierce Internet competition.

Second Life, the massive multiplayer online world, allows users to log on through the Internet and create 3-D computer-generated identities. Businesses such as Cisco (CSCO Quote), Dell (DELL Quote) and IBM (IBM Quote) have already set up shop in Second Life, making it the first destination for real-world companies looking to extend their brand in to the virtual realm.

Linden Lab, the San Francisco-based creator and maintainer of Second Life, has big numbers. The virtual world's population is quickly approaching 5 million residents, more than tripling over the last six months.

Over the course of one day, more than $1.5 million is typically being spent by users within the digital world, making it one of the most popular 3-D destinations on the Web outside of There.com and World of Warcraft.

Kaneva's Blank Canvas

New virtual destinations, though, are inspecting Second Life's armor for chinks. One of the newest is Kaneva, which extends a profile system similar to News Corp.'s (NWS Quote) MySpace into a three-dimensional world.

Kaneva, Latin for "canvas," certainly isn't as immersive as the world of Second Life, but its simple design and controls may draw a much larger, less tech-savvy crowd.

Kaneva builds on MySpace's profile-driven Web pages by enabling users to interact and chat through instant messaging.

While users establish a 3-D model (or avatar) of themselves in Kaneva, it's primarily the content that allows for self-expression in the virtual world. Users are given their own apartments, where uploaded videos can be streamed on to a 3-D television, and uploaded photos are displayed as posters on the walls.

Don Bain, vice president and general manager of the Solutions branch of the Electric Sheep Company, explains that this type of platform may find its own niche audience in a follow-the-leader way.

Electric Sheep is one of the premier companies that aids real-life businesses with the transition into the virtual world. Electric Sheep has created the virtual homesteads for Starwood Hotels (HOT Quote), Major League Baseball, Reuters (RTRSY Quote) and Time Warner's (TWX Quote) America Online.

"When we see artists come in to Second Life, they've made announcements first on MySpace pages," Bain explains. "If they had made an announcement they were going into another platform, then audiences would follow them there. The average new person isn't going to sit and choose what platform they're going to explore."

Gamers Go Home

Sony's PlayStation 3 will have a new menu feature added in September, titled Home. While Second Life is considered an experience as opposed to a game, Home is bringing customizable 3-D avatars to hardcore gamers.

"One of the things that is remarkable, in the case of Sony's PlayStation 3, is that they have rich content and they have an audience already," Bain says. "When you have a group that has come together for whatever reason, those audiences are going to exploit, partake and enjoy what they would come together to do anyway."

Home won't feature user-driven content like Second Life. Instead, the virtual environment will be provided by Sony and third-party developers. The intent is to develop a gamers' forum, where people can communicate in a 3-D world.

On Home's digital landscape, users can browse each other's Hall of Fame for trophies earned in various retail video games. In larger forum areas, 3-D avatars can chat with text and even voice capability, something Second Life announced in February but has yet to integrate in the system.

One of Home's strong points is that Sony will bring the service to PlayStation 3 owners free of charge. Gamers need only an Internet connection. However, the price of a PlayStation 3 console carries a hefty price tag of $500 or $600, depending on the hardware configuration.

While pricing hasn't been discussed yet by Sony, the company has said that additional items and clothing, as well as downloadable video games, will be made available.

"Sony is very smart, and they're going to follow, learn, and adapt," notes Bain. "It's smart to take advantage of that powerful box and a wonderful network. The more opportunities to engage, the more opportunities they'd have to expose them to new things. They can monetize what they expose their audience to."

Virtual Building Blocks

Also entering the fray is Denmark's Lego Group, but it's targeting a much-younger demographic with its own massive multiplayer online game (MMOG). While a target launch date hasn't been set, Lego looks to bring social networking to a younger crowd in the best, safest way possible.

"As children around the world continue to spend more time online we are developing new and engaging ways for them to interact with our brand," said Lisbeth Valther Pallesen, executive vice president with the Lego Group, in a statement.

"The Lego brand represents construction, creativity and problem solving -- values that compliment the MMOG market," she continued. "By merging the online world of social interaction with physical play, the Lego brand is providing new experiences for children, as well as fans."

Advantage: Second Life?

Second Life's popularity certainly doesn't look to be waning, though. According to data posted on the virtual world's official Web site, 641 new pieces of Internet property (known as an island) have been sold thus far in March, compared with 574 private islands added during the entire month of February. Additionally, the average price paid per square meter is easing.

Also worth noting is that the supply of the in-world currency, the Linden dollar, sold to residents in March looks to be unchanged from February's levels, based on data found on Second Life's Web site, which suggests a steady virtual economy.

"As the prevalence of online virtual communities continues to grow, Second Life finds itself at the nexus of some fascinating developments in the world of media and technology," says Catherine Smith, director of marketing with Linden Lab. "The number of newcomers to the space further establishes the potential of 3-D virtual platforms, and it's something that excites us here at Linden Lab."

Bain certainly isn't pessimistic about Second Life's future, competition or not, noting that audiences will always come together because of the social aspect.

"In those cases, the all-around experience is what people are passionate about, not the platform," he says, adding that "Second Life is secondary to the experience. I trust the user community to evolve into something works for them."

Bain says that the virtual space is moving so fast that it' hard to view one platform as having a distinct advantage over another.

"If this were a baseball game, I'd say that we're still in the first inning," Bain says. "It's still extremely early. I look for lots of great developments to happen to make the experience even richer. The stability and the scaling of the platform will keep going."