Virtual Life or Virtual Hype?

I’m at the Supernova conference in San Francisco this week. In
this post I review a panel entitled, ‘Virtual Life or Virtual Hype’. The panel was
moderated by Sandra Kearney from IBM and included the following panelists:

  • Clay Shirky (NYU)
  • Rueben Steiger (Millions of Us)
  • Raph Koster (Arae)

The brief description in the program was:

“Do most people really want to immersed in 3D virtual worlds? And what are the real
business benefits of these massively multiplayer environments? This session will examine
which activities will migrate to virtual environments and when physical forms will
continue to dominate.”


The panel started with each panelist responding to the question, ‘Virtual Life or
Virtual Hype?’
. Clay and Raph began by emphasizing that the virtual world market
today is primarily composed of individuals who are playing games. He indicated that while
there is a lot of hype surrounding 3D internet and metaverse things, they are really just
a small contingent of the virtual world market.

Pic: psd

Rueben explained that he believes it is very early in the first innings of a game that
will probably go extra innings. Therefore, he sees the question as a non-issue.

Second Life

The conversation then transitioned quickly to a discussion about
Second Life and Linden Labs as a non-game based virtual world. Specifically, there was a
long debate about whether Second Life is actually growing or not and how sticky the
environment is. Rueben framed the issue well, explaining that for the first 3.5 hours of
using Second Life, the attrition rate is horrible. However, after 3.5 hours the attrition
rate drops quickly. The reason is that right around then people meet someone. Linden Labs
is working on how they can engineer an environment that accelerates new members meeting
other avatars.

Clay pointed out that while this is true (members staying after 3.5 hours are loyal)
he had to point out that the overall attrition rate is still 90% and so he remains
skeptical. He emphasized his point by stating that “I never in my life bet against the
user.” He said there were two key questions for him:

1) Do the users who like it, like it a lot? Yes

2) Do a lot of users like it? No

General Framework

At this point, Jeff Clavier asked from the audience if we could move beyond just
talking about Second Life. Reuben verbally proposed a matrix that I have sketched below.
Along one axis is whether the environment is 2d or 3d. Along the other axis is whether
the focus is social or entertainment. Second Life is a great example of a three
dimensional social application. World
of Warcraft
is a great example of a three dimensional entertainment application.
Along the two dimensional axis, the video game consoles are excellent examples of
entertainment focused experiences. Along the two dimensional axis, Gaia Online is a good example. Incidentally, it
seems like Rueben’s firm has decided to focus on the social applications, as they have
brought 1/3 of the Fortune 50 into Second Life and they’re now expanding to focus on


To wrap up, the panel again revisit the opening question of what was real and what was
hype. The panel rallied around two themes: the younger generation and geography. Raph
pointed out that under the age of 20, “anyone who is not a gamer is an aboration.”
According to his experiences, they actually move as groups from game to game – often
sampling 20 to 30 games a year. Although, they tend to relate most to the first
experiences. The panel also pointed out that due to a confluence of issues, Korea has
multiple virtual games that are 1/2 billion dollar (US) businesses. These influences

  • Financial crisis giving people time
  • Fiber directly to the apartments in major cities
  • Respect for gamers cultural (all the way back to Go)

The panel all agreed that looking at Korea as an example, as the ‘young generation’
grows up and infrastructure is built out, there should be just as vibrant a market in the
US. In other words, the panel all seemed to agree that it was not hype. I’m curious what
the astute readers of R/WW would believe? Virtual Life or Virtual Hype? Please leave your
opinions in the comments below.

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