Virtual Winter, Lindens playing outside in nothing but a T?
October 19, 2008 8:45 pmAlready a while ago, someone proclaimed ‘virtual winter’ ahead. Well, probably, lots of people proclaimed that in the last few months, and even more probably, those were exact the same people that predicted Second Life would be the next internet a few years ago. And now even the CEO of the Electric Sheep joins in with some predictions of Virtual Doom. Mr Verbeck this our Real Life recession will lead to amongst others: Elimination of at least 80% of Virtual World advertising, marketing, and sponsorship efforts, Kids’ Worlds will Continue to Grow at a Healthy Rate and Many Startups Will Fail. Can we conclude from that Second Life opens it’s borders & lets the teens & kids unto the Main Grid, we’ll get through this virtual drinking hot chocolate, unwrapping gifts & new features and wishing each other a great 2009? Or aren’t things that simple? ;)
In the mean while, Lindens communicated (!!!!) with AFP and said the real life recession is not influencing - which is probably Second Life’s trump card - our virtual economy:
PARIS (AFP) — In contrast with the turmoil rattling global financial markets, it’s all smooth sailing in the virtual economy of Second Life, the California-based creators of the Internet-based universe said Wednesday.
“Despite the chaos in the world’s economies, lead indicators for the Second Life economy remain strong” said John Zdanowski, financial director of Linden Lab, which set up Second Life in 2003.
“Second Life as a whole has been so far unaffected by the recent turmoil in real world markets,” he added in a written response to AFP.
The exchange rate of the Linden dollar to the US dollar had remained stable, he said, as had trading on the LindeX exchange.
The commercial online world, in which people are represented by animated avatars and can do everything from social activities to shopping, has attracted more than 10 million subscribers, though only five percent are considered active users.
Is this denial? The kind of denial that makes that during wintertime, you go outside in just a tshirt, which is rather fun, until you end up suffering pneumonia? Probably. More discussion on the real life crisis and it’s influence on Virtual Worlds in general at Terra Nova. There, some interesting ‘bank game run’ scenario’s are mentioned:
- People attempting to liquidate all their virtual assets - this includes L$ in Second Life’s case - at once (this would include the black market sites or under-the-table deals). Theoretically, this might equate to massive deflation (following temporary hyper-inflation)but, in game terms, would effectively strip the games of value.
- People quit paying their monthly fee. Again, in theoretic terms this would be similar to production (or investment?) shutting down but in reality would be a run situation once panic sets in. That’s the key, I think, not the institutional aspects of a bank but the panic aspect of a run. (For SL, I think most people already stopped paying their monthly fee.)
Gaia’s CEO expects the opposite to happen: “As the ‘real world’ gets worse, virtual worlds get better,” Gaia CEO Craig Sherman told Forbes.com. “As things get worse, people spend more time at movies or spend more time on a site like Gaia Online, which provides a relatively inexpensive respite from the offline world.”
The boss recently blogged a Top 10 Cool things about Second Life* - for which he head to admit there were more then would fit a top 10 list - as well as a Top 10 List of Things that Need Urgent Fixture if Second Life wishes to have a meaningful future and wants to keep is place as #1 Real Virtual World. Both are highly commented, and everybody has it’s own opinion.
With so many different opinions floating about, the panel discussions at Virtual Worlds London surely promise to be interesting. Maybe even M’s speech will be about the future of Second Life, containing - hopefully - some concrete ideas about how that future will look like. But let’s throw those facts & figures Lindens quarterly might or might not publish out of the virtual window, and take a look at what the ‘residents’ experience. Not the VC companies, not Lindens, but those ’smaller’ one person (multiple avie? ;)) based companies: a single person making it’s living in Second Life selling skins, another person paying it’s rent by what he or she produces in Second Life, and even those only making a few extra bucks inSL. Did your revenue go up or down? And for the rest of us, do you spend more or less inSL than let’s say a year ago?
Why the SLex goods/services vs. non slex goods/services? I felt like it. That and they say sex is of all times & cultures, regardless financial crisis or not. ;) Also mind that, other things could be influencing more or less sales. I am selling less than I did a year ago, but that’s because I don’t produce new in-world products any more, and spend 0 time promoting the old ones I have. If you feel the need to give more information with your vote, feel free to do so in the comments!
And your opinion about the SLeconomy in general:
Again, share your further thoughts on this in the comments, please!
5 Responses to “Virtual Winter, Lindens playing outside in nothing but a T?”
(checks watch…) Yeah, another thinly-veiled swat by Sibley at SL.
Onrez is still Sheep, right?
It’ll be interesting to see if Sibley finishes the Sheep retreat from SL and leaves Xstreet champion of catalog shopping so he can focus on the web-based kiddie games he thinks are the growing market during the global recession.
Things have slowed down a bit with the sales I guess, but having asked around a few people who have been in world longer then I have - it seems to be a natural trend over summer and things tend to pick up again as the nights draw in… I guess I will have to wait and see.
I think a lot of people do use things like SL as an escape from RL crap, so no, I am not panicking yet about SL sliding into the same brown smelly goo that the RL markets have.
I didn’t vote on the 2nd poll, imho there’s an “in-between” answer that could also happen (and I think / hope it will):
RL recession will not cause “much” damage to the SL economy.
But I’m sure there will be a lot more people that will think twice before spending cash on something now.
Also people “may” get more selective on what their inventory holds and do more in-world yard sales (or online marketplace “yard sale”-style selling).
Still: although the “golden days” may start to turn to copper (which is still valuable), in general I doubt virtual economy will experience a similar crash like the RL financial world has.
I think the virtual economy is suffering a bit, but it probably has more to do with the stagnant growth of the SL population than anything else. New avatars need stuff, and if there are few new avatars, then there are fewer purchases.
Also, Gartner has a concept called the “Hype Cycle”, which proposes that any technology (like Virtual Reality) passes through stages. One portion of the Hype Cycle is the “trough of disillusionment” where everyone dumps on the tech until people like us figure out how it’s really supposed to work. In other words, just wait a while yet, and things will be a whole lot bigger and better.
I suspect with Tech ppl losing their jobs we will see some rather clever new things come into SL.
Possibly we will start to see some growth in users, as people are staying home and using their Pcs more to keep entertained.
The business use of Sl will be interesting, can it compete with Adobe Connect, Cisco Conference Connection, for collaboration and meeting purposes?
I also wonder about the developers businesses. Can they keep the income to stay afloat?
Care to comment?