Virtual woes, or whatever happened to Second Life?

I have been reading a post in New Worlds Notes about Fred Von Lohmann‘s presentation on copyright in virtual worlds for the Play Machinima symposium at Stanford. Some interesting points about the potential issues with regards to copyright protection from user-generated content in virtual worlds, particularly with regards to ownership of textures, and the fair use implications of screenshots that display work from other users. While thinking about this, one thing struck me. Whatever happened to Second Life?

I’m not trying to be fascetious, this is an honest question. A couple of years ago, Second Life was in the news all the time, every new craze was widely reported, Reuters had deployed a correspondent, companies were flocking into the virtual world purchasing virtual space and building virtual headquarters. But now there is hardly anything in the news, Reuters closed off its SL office, and the only official interest comes from the UK government (trust the government to be 4 years late to anything). Moreover, most of the blog posts I have found that mention SL recently tend to be negative.

Initially I found it strange that Second Life has stopped showing demographic figures on their front page. There are usage statistics in the SL wiki page, which claim that there were 589,354 users logged last week; which is an increase of 100,000 users from the same time last year. Similarly, the number of concurrent users seemed to have peaked at 62,000 in early 2008 at 88,199 just recently. If we take these figures at face value (and there is no reason why we shouldn’t), SL seems to be growing, albeit slowly. So why has interest completely dried out?

One reason could be that SL has stopped being a novelty, and reporters have moved to the new hyped technology (*cough*Twitter*cough*). Another reason is that SL seems to suffer greatly from a high learning curve, which makes it unappealing for new customers. The graphics also look dated despite some upgrades, and I have personally found it impossible to navigate around the space when I have tried to log in. In short, Linden Labs may be struggling with the fact that they are yesterday’s news, and the slow growth would seem to indicate this trend.

The problem I see with Second Life is that it is operating in the wrong financial environment. When talking about this with the always insightful Chris Marsden, he commented that Linden Labs had a short-term business plan, which was to build a customer base quickly hoping to cash in by being bought by a larger company (like Google). However, this did not happen, and they were stuck with a virtual world that required massive investment in order to sustain the growth rates experienced until then, but having missed the boat, such investment was non-existent. The result was the massive lag problems experienced by everyone last year, which in my opinion is what killed both growth and hype dead.

At the moment SL seems to be stuck with slow growth, but with a rabidly loyal fanbase that ensures its sustainability in the short term. I haven’t tried it for a while, but I hear that lower concurrent users have translated into less lag.

While directed at a different market altogether, I wonder if the likes of Free Realms are the future of virtual worlds. Hey, it can be played in the PS3!