About Second Life

Website: www.secondlife.com

Background
The online virtual world, which has a population of nearly 6 million residents, was opened in 2003. It was created and is maintained by Linden Lab, a software and hardware development company in San Francisco.

Membership Fees
First basic – (free membership) one customizable avatar and no Linden dollars (LindeX).
Additional basic – (membership for $9.95) one customizable avatar, no Linden dollars and building opportunities.
Premium – (monthly fee, $9.95; quarterly fee, $22.50; yearly fee, $72) one customizable avatar, sign up bonus of $1000 LindeX, weekly stipend of $300 LindeX, building opportunities and land use opportunities

Land ownership
Land use fees range from between $5 to $195. Land can be purchased from Linden Lab or at auction from other members. Land can be reserved at a starting price of $30.

The Audience
“In terms of player base and retention,” says Travis Ross, a producer at the Synthetic World Initiative at Indiana University, “those that stay the longest and make up the smaller player base are interested in economic profit, sex and/or art, while curious players tend to come and go but make up the larger player base.”

System of Government and Law
There is no established form of government or widely recognized police force in Second Life. Though some have referred to Second Life as “virtual anarchy,” residents can file abuse reports and/or be disciplined by the Second Life Abuse Team for violations of terms of service or community standards. SL residents can be reprimanded with a warning, suspension or expulsion.

Economy
Residents spend nearly $1.5 million a day in SL and the virtual GDP was reported at $64 million in September 2006. There is currently no tax system established in SL though some real world governments are now considering taxing currency converted from Linden dollars.

If Murphy’s Law of “anything that can go wrong, will go wrong” applies to the real world, it applies to the virtual world as well. Xerox discovered this when it held one of its first trade shows and press conferences in April on “Innovation Island” in Second Life (SL), an online virtual world of almost 6 million residents created in 2003 by Linden Lab, a San Francisco-based hardware and software company. (See sidebar.)

“Sorry, everybody,” said Xerox avatar Julia Jua when a Quicktime video refused to play during the virtual press conference. “This will only take a few minutes.”

Despite the glitch, the Stamford, Conn. company’s marketing foray into cyberspace was a success (to find out more about the event, go to page 110), showing just how ahead of the curve the printing conglomerate could be.

“Xerox regularly holds customer events and product launches around the world, often affiliated with major product trade shows,” says Bill McKee, Xerox spokesperson. “Holding our event in both the real world and SL seemed like a natural extension for a company that prides itself on its innovation.”

Xerox has joined other businesses such as IBM with company divisions dedicated to exploring virtual worlds. “On Xerox Innovation Island in Second Life, researchers from our centers in Webster, N.Y., and Palo Alto, Nev., are studying the social dynamics of virtual worlds, and are developing ways to make avatar-mediated communication richer and to design successful public spaces in these environments,” McKee says.

The Virtual Leap
Xerox and IBM aren’t the only ones leaping into virtual space. Several other companies such as Dell, Reebok, Adidas, American Apparel, Reuters and AOL are also setting up shops in SL. These business ventures have left many market observers wondering why Fortune 500 companies would invest time and money into what is basically an online role-playing game where people create islands, fly and shape shift at will. The main reason: Commerce in SL translates into real-life dollars.

Though SL currency is called the LindeX or Linden dollar, it can be exchanged for U.S. dollars that residents can pay out in cashable checks or into PayPal accounts. A recent survey by Linden Labs even suggested that the company is considering offering branded MasterCard or Visa debit cards so users can more easily transfer money earned in SL into their real-life bank accounts. “If you had debit cards it could certainly streamline the process,” says Alex Yenni, spokesperson for Linden Labs.
This would be good news for the 13,788 companies in SL that, according to CNNMoney.com, showed profits by the end of last year. These businesses, which vary from landscaping to pet manufacturing, contributed to SL’s estimated GDP of $64 million as of September 2006 with residents spending almost $1.5 million every day.

Another reason why companies invest in SL is that the virtual world is yet another way to reach potential customers and support and expand a company brand.

“You can reinforce a brand or launch a brand in SL. It just depends on what you are trying to achieve,” says Mary Ellen Gordon of Market Truths Ltd., a market research and analysis firm with offices in Roseville, Minn., New Zealand and SL. “For example, there was a comment in one of our surveys where a person said they thought of AOL as a stodgy company but when they found out AOL was opening a skate park in SL, their attitude about the company changed. They started to consider that AOL was more cutting edge than they originally thought.”

But not everyone is ready to jump on the SL bandwagon. Some say that SL has yet to prove itself as a viable business solution. “IBM has built a replica of is Almaden Research Center in SL, and Coldwell Banker has opened a virtual office to sell virtual real estate,” says Stephen H. Wildstrom in the April 23 issue of BusinessWeek. “But for all the buzz, it’s not clear to me that SL is much of a business investment. Linden Labs claims 5.2 million ‘residents,’ but only 1.6 million have logged on in the past two months, and there are generally fewer than 50,000 around at any time.”

But those who follow virtual worlds say the populations in these environments will continue to expand. “I would emphatically argue that the popularity and usage of virtual worlds will continue to grow for a number of reasons,” says Jim Cummings, an analyst with the Synthetic World Initiative at Indiana University. “For one, as [British writer and game researcher] Richard Bartle suggests, everybody wants to be a hero, and players venturing into a virtual world, interacting with real people and relationships allow him or her the opportunity to lead, aid and guide others in a manner not always available in the real world. Similarly, virtual worlds may serve a cathartic function or stress-relief in light of real world lifestyles that may not offer such releases. Further, as games, particularly virtual worlds become increasingly realistic—whether in terms of sensory immersion, sociality, or emotional verve—they will only increase in their ability to cater to basic human drives. This will result in virtual world experiences being even more desirable, enjoyable and meaningful than they are currently.”

Those businesses that do venture into a marketplace like SL may find the virtual world is far different than they expected. Following business and marketing models that would be successful in real life may not produce the same results in SL.
“A lot of the tactics that businesses use in the real world are a one-way communication, but they are learning that in SL it needs to be more interactive,” Gordon says.

“The first businesses that understand that they have to invest far more in the human and social interactions will be the ones that attract more traffic,” says Gwyneth Llewelyn, a Second Life blogger and resident.

And this can’t be done by simply “slapping products or a banner up there,” Gordon says. “The tactics that customers were more receptive to were when companies allowed them to design a product or create a product themselves in SL that could be produced in real life and purchased.”

Edward Castronova, director of the Synthetic World Initiative, says he can think of one company in particular that has a shown success in SL using the interactive model. “Pontiac has a car dealership where people can drive Pontiac cars around,” Castronova says. “This seems to me like a case of successful contact between the customer and the brand. In typical marketing, a successful contact is measured in seconds—a 30 second spot or a banner ad seen for 12 seconds. In SL, the customer drives the Pontiac car for hours. It is different enough in degree to be different in kind. It gets close to direct customer experience of the product.”

But some still doubt brand marketing’s potential in the virtual world. In his blog entry entitled, “The Top 10 Reasons Why I’m Still Not Convinced about Marketing on Second Life,” Hewlett-Packard VP of Global Marketing Strategy & Excellence Eric Kintz listed “brands cannot stay true to the SL values” as one of his reasons. “SL is about realizing your fantasies and being something different than you are in real life. Many avatars have a different gender than the subscriber or take on animal forms,” Kintz wrote. “However, most brands mimic their real life experiences and value proposition in SL. Brands have also disrupted the local economy by offering some of their goods and services, prompting a backlash by residents. Seventy percent of SL residents are disappointed by the branded experiences.”

But Gordon insists that her market research in SL shows that this isn’t the case. “A lot of people have speculated about this, but that’s really not true,” she says. “We’re finding that there is a very strong correspondence between what people like to buy and what activities they do in real life and what their avatars like in SL. They like seeing brands in SL because it makes the world seem more real. But they did show more favorable attitudes to products they liked in real life than those they didn’t like. For instance, if some of them suddenly found a mega Wal-Mart in SL, the reaction might not be positive.”

Instead of worrying about perpetuating their brand, companies should consider the more practical aspects about working in SL and plan their business model accordingly. “SL is a virtual environment that operates 24 hours a day, seven days a week,” Gordon says. “It’s open all the time so companies often don’t know when people are going to be there. A lot of it has to be self service.”

A Second Life Journal

Avatar Shellygal Beck (a.k.a. Assistant Editor LaShell Stratton) sits in a mostly empty auditorium waiting for the Xerox Second Life press conference to begin.

Xerox incorporated both 3-D animation and QuickTime videos during its SL tradeshow. When visitors double clicked on the Xerox Nuvera EA, a pop-up video appeared behind the press, detailing the equipment’s capabilities.

Here are a few Xerox avatars that appeared at Innovation Island tradeshow in SL, including the elusive pink bunny rabbit.

Editor’s Note: In conjunction with the OnDemand Expo, Xerox held a trade show and press conference in April in Second Life, an online role-playing virtual world. Xerox invited members of the press to attend in the form of avatars. Assistant Editor LaShell Stratton took her first trip into Second Life as the avatar “Shellygal Beck” to attend the event. Here is a journal entry of what it was like for her to fly, stumble and interact in a virtual world.


LaShell Stratton	Shellygal Beck

At 4:45 p.m. EST, 15 minutes before the Xerox show begins, I log into Second Life. I start on Orientation Island, the place for all SL newcomers, but a pop-up message quickly appears on my screen telling me that I’ve been invited to the Xerox’s Innovation Island. It also gives me the location’s coordinates, but I’m not much of a map reader. I doubt I could find it in the vast SL world, let alone figure out how to get there. (Is there an airport island somewhere?) Luckily, I notice a button on the pop-up that says I can be teleported there with a simple click. A second later, I’m on Innovation Island.

The first thing I notice is the pavilion, which the programmers at Beta Technologies have made in a modernist style with lots of sharp angles and windows on the exterior. In the real world, it would be probably five to seven stories tall. I know that I’m in the right place because Xerox signs are everywhere.

The next thing I notice is that one of the Xerox avatars is a green Frankenstein on roller skates. (I know that he’s with Xerox because everyone seems to have a category with name bubbles over their heads: “Xerox,” “Press,” “Analyst” and “Speaker.”) I also notice another avatar is a giant pink bunny rabbit. And I thought my avatar was underdressed in jeans and flip flops!

I’m immediately greeted by the Xerox avatar “Julia Jua” who says (by way of a chat block that appears on my screen) that I can look around and grab freebies in the promotional products area to my right. After that, I should go to the trade show. That’s enticing, but I’m still trying to figure out how to walk, let alone how to pick up things. I do a few awkward circles around the pavilion before finding the freebies area. Now the second challenge. How do I get that black baseball cap on the third row? At the bottom of my screen there is a tab marked “Gestures” but when I click it, “grab” isn’t listed among the options. It takes a few minutes but I finally figure out how to get my hat into my avatar “inventory.” Now how do I get the hat on my head?

The Trade Show
There are SL replicas of presses and photocopiers everywhere. There’s the Xerox 4595 digital copier/printer and the EIP-enabled work center. I also see a DocuColor 260. I wonder if you can test out the SL presses too. (Is there a demo?) I click on the 4595 copier/printer and a pop-up screen appears. It describes the model and its capabilities. I click on another printer and a movie toggle button appears. Suddenly a “movie screen” behind the printer shows a QuickTime video of a real-life demo of the press. This is pretty cool!

It’s almost 5 p.m. EST. Time to head to the press conference and panel discussion. The panelists are avatars BobMoore Xerox (Bob Moore, a sociologist in the computing science laboratory at Xerox Palo Alto Research Center), Seth Witte (Sandra Kearney, director of IBM’s emerging 3D internet and virtual business), Gwyneth Llewelyn (really Gwyneth Llewelyn, a famous SL blogger), Emmet Bing (Ron Mieners, developer relations manager at the software company, Multiverse) and Eggy Lippman (Jorge Lima, founder of Beta Technologies, a software company that creates virtual buildings for clients.) I’m excited to see what everyone has to say.

The Press Conference
There’s a sign in the center of the pavilion that directs me to the auditorium, but when I arrive there are only three other avatars seated (the pink bunny rabbit included.) After a few minutes avatars begin to trickle in and I notice that the lights are dimming. Oh, those aren’t the lights; it’s the sun coming through the floor-to-ceiling windows behind me. I scroll through the menu option and figure out that with a click of a button, I can turn late afternoon into day. It’s sunny again.

The panel discussion starts several minutes late after a video glitch. They skip the press conference entirely to save time. Finally, the panelist members share their views on how virtual worlds are succeeding and what they can do better.
“Second Life is very experimental and I think that points to how we use virtual spaces—we experiment,” says avatar Emmet Bing. “In doing so, we form richer relationships that help people work together. When people are having a good time, they’re more creative, responsive and open minded.”

“I’m hoping that as people use virtual worlds for more things, they will demand better avatar interaction,” says BobMoore Xerox. “This is really a bit clunky. Most game companies kind of ignore this and spend more on new content, but the ability to have easy interaction will be key.”

I couldn’t agree more…

— LaShell Stratton

LaShell Stratton is assistant editor at Print Solutions magazine. Email comments to lstratton@PSDA.org.

Brave New World

A Second Life Journal