SecondLife is riding the hype curve

LindenLabs have done a great job of building a buzz round SecondLife that has made it seem bigger than it really is and the whole SL hype machine has also had a huge boost from the interest that traditional media has taken in the worlds favourite virtual world. These two things have combined in a positive feedback loop which has taken the hype to higher and higher levels.

The most real result (geddit??) has been big corporations rushing to build presences in SecondLife – this has had the dual benefit of generating lots of offline column inches and keeping their brands on the leading edge.

The problem with all this has been that the hype got way ahead of the real activity, and when that happens disappointment usually follows.

We saw the first signs of that earlier this year when people started analysing SL’s usage stats and showing that active users were only a small fraction of the headline Total Residents figure (now standing at 8.3m) and hence SL was overhyped. My thoughts on this subject from January are here.
Now the disillusion has reached a new high – at least if this article from the LA Times is to be believed (thanks to Sam at Blognation for the link).

the sites of many of the companies remaining in Second Life are empty. During a recent in-world visit, Best Buy Co.’s Geek Squad Island was devoid of visitors and the virtual staff that was supposed to be online.

The schedule of events on Sun Microsystems Inc.’s site was blank, and the green landscape of Dell Island was deserted. Signs posted on the window of the empty American Apparel store said it had closed up shop.

If you read the article you will see that many of these companies are starting to leave SL.

This doesn’t surprise me. Dell et al didn’t go into SL because people wanted to visit them there, they went in for the first world brand benefits. Further, if there are many more articles like this one maintaining a presence in SL will start to be seen as a PR stunt – which will hurt brands rather than help them. Hence the start of the exodus.
But this isn’t all bad news. In fact it is part of the natural evolution of any new technology/market.

I’ve seen this Gartner hype cycle applied to just about every market I’ve been involved with, and now it is happening to SL.
Gartner hype curve

The good news about this, of course, is that coming off the “peak of inflated expectations” forces people to focus on doing things of real value. To my mind that is when we will really start to see the benefits that virtual worlds can bring.

None of which is to say that SL will be the eventual winner in virtual worlds – although they occupy the lead slot at the moment. In order to stay out in front Linden will need to find a way to rebuild the momentum. Some of the stats later in the LA Times article make grim reading on this front:

Between May and June, the population of active avatars declined 2.5%, and the volume of U.S. money exchanged within the world fell from a high of $7.3 million in March to $6.8 million in June.

I hope that this is just a blip.

  • I completely agree. There is a lack of vision in companies entering SL: they treat this 3d environment like a separate world, a place to establish a colony. It seems they do not understand: 1. it is a social network like many others, except the fact that you interact with a 3d interface; 2. “places” in world can be designed to have social functions that in the real life cannot have. So: 1. before entering SL, start using other social network because they worth the investment more than SL; 2. do not build arenas or houses, but architectures with new social functions.
    Ciao. Nicola

  • I completely agree. There is a lack of vision in companies entering SL: they treat this 3d environment like a separate world, a place to establish a colony. It seems they do not understand: 1. it is a social network like many others, except the fact that you interact with a 3d interface; 2. “places” in world can be designed to have social functions that in the real life cannot have. So: 1. before entering SL, start using other social network because they worth the investment more than SL; 2. do not build arenas or houses, but architectures with new social functions.
    Ciao. Nicola

  • Nick, I translated an article I wrote for il Sole 24 Ore and that was published yesterday. It explains better what I wrote in the previuos post. You can find it here: http://www.spiderlessweb.com/?p=15

  • Nick, I translated an article I wrote for il Sole 24 Ore and that was published yesterday. It explains better what I wrote in the previuos post. You can find it here: http://www.spiderlessweb.com/?p=15