Businesses are establishing posts on virtual worlds like Second Life. But is there any money to be made?
As a number of sober-suited executives assemble for a meeting in a plush conference room, they do so safe in the knowledge that no one can eavesdrop on their conversation. This is no ordinary meeting. In reality the executives are sitting at different points around the globe: it is their avatars, internet versions of themselves that are meeting in a virtual world known as Second Life.
This is not a scene from an Arthur C Clarke novel. This is now. The secure conference room they meet in is provided by a cutting-edge Dublin firm known as V Rising, which in recent months was awarded a grant to conduct a feasibility study in to virtual worlds by Enterprise Ireland.
The Second Life phenomenon – a virtual world where people in the form of ‘avatars’ can go to virtual versions of Dublin, London or Amsterdam and communicate – is beginning to excite the interest of big brand names and entrepreneurs who sense opportunity.
Second Life debuted in 2003 and today boasts over 8.9 million accounts. The virtual world – there are over 30 of them out there – has its own currency known as Linden Dollars and has a booming real estate economy. At present a small number of residents earn net incomes from this economy selling anything from apparel to islands and castles.
Big business names like IBM, Dell, Adidas and Warner Brothers have all established ‘islands’ or representations of their offices in Second Life as an exercise in branding but with an eye on drumming up future business opportunities.
In recent weeks Coca-Cola launched its latest ad campaign with executives attending a red carpet bash in Second Life. When 20th Century Fox unveiled the summer blockbuster Die Hard 4.0 it held its press conference in Second Life, actor Bruce Willis’s avatar answered journalists’ questions; possibly even from the full-time reporter Reuters employs in Second Life.
At the IBM campus in west Dublin where 3,200 people are employed, a team of five at the company’s 460-strong IBM.com division works full-time to represent IBM’s ‘island’ on Second Life. Throughout IBM worldwide, more than 3,000 people have Second Life avatars, explained the director of the IBM.com division in Dublin, Hugh O’Byrne.
“You’ll find lots of companies up there experimenting,” explains O’Byrne. “We think it has potential as a way of doing business. We’re just experimenting with it ourselves but we see massive potential in the human interaction you can bring. It’s a big browsing environment in many ways.”
O’Byrne explains that IBM uses the Second Life environment as a means of providing customer service. “We have six to 12 people on tap worldwide who will act as concierges 24/7. Their job is to say ‘hello’ to anyone who walks in and guide them through products.”
The IBM office in Second Life also functions as a library as well as an auditorium for seminars, explains David Lallement, IBM’s Second Life concierge. “We treat it as a good meeting point but I think the real innovation will come when more people start using voice in
Second Life,” he says.
“One customer has asked us to build him a secure meeting room in Second Life and we’re going to do it,” adds Greg Scollen, manager of new projects at IBM.com. “We treat it as a virtual branch office. The bottom line is to see if we could generate sales and build relationships. At the very least it is one possible indication of the future shape of the internet.”
V Rising managing director Gary Leyden explains: “We felt that 3D interfaces represent the next phase of the internet and Second Life is a great way of demonstrating that. Our focus is on the business market but the consumer aspect of virtual worlds is already big business,” Leyden points to Disney’s recent acquisition of virtual world for Club Penguin for US$350m.
Leyden says one of his company’s key roles will be to develop security products for companies engaging in environments like Second Life. His company has also partnered with John Mahon, otherwise known as Ham Rambler, who has built a virtual version of Dublin city in Second Life.
“There are over eight million people registered in Second Life and at any given moment there are 50,000 people living and working there,” Leyden says.
“Second Life is still a small phenomenon,” explains Eamon Clarkin, group planning director of Irish International Group who has conducted research into the subject. “But that’s not to deny it is interesting. It has the potential to be very popular but right now it offers potential lessons for brands and marketers who will have to learn to be nimble in the years ahead to keep up with these trends.
“Brands will be conservative enough but the nature of Second Life is such that people will have to keep a clear weather eye on it,” Clarkin adds.
“What Second Life has done is it has jumped on the user-generated content bandwagon and allowed the users to build the world in their own way, which I think was smart,” says Neil Leyden of digital media consultancy Calico Media.
Leyden last year signed a deal with Danish firm Fiddler’s Green, which is headed up by veteran Hollywood screenwriter Philip Lazbnik who has films like Mulan, Pocahontas and The Prince of Egypt to his name.
He will work with Fiddler’s Green on a project called Alphabet City that will be both a movie and a virtual world. “I read about Second Life a year ago, went online and the first thing I did was walk down O’Connell Street. I found the experience similar to when I saw my first movie. I had goose-bumps,” Leyden recalls.
Still unconvinced about Second Life’s business potential, however, is the Irish Internet Association’s chief executive Fergal O’Byrne. “We’re keeping a watching brief to see if there’s any business benefit.”
He says he would have a healthy degree of scepticism as to what resources a business should put into virtual worlds at present. “We see people with large marketing budgets jumping in and giving it a try. But for a small business with limited resources you’d really need to give it a serious run over with a business rulebook and a calculator before you dive in.”
Delivering a calling card to a perfect world
A Dublin and Greystones-based company that supplies debit cards for corporate customers and shopping centres is in the process of creating a debit card specifically for users of the Second Life virtual world.
Perfect Card currently provides debit cards for corporate customers like Dell and AOL Broadband implementing reward schemes for employees as well as serving the Richmond Shopping Centre and the Quays shopping centre in Newry.
“At the moment we have an office in Second Life but we realised that while we have a real world product for gifts we are looking at transferring that into the virtual world whereby someone who is given a card as a gift can convert this into Linden Dollars,” explains Perfect Card’s Nikki Evans.
Perfect Card, which has been in business for two years now, provides debit cards on the back of the MasterCard platform and is actively looking at breaking into new markets and new countries.
“Already people can use our cards to buy goods online,” Evans continues. “We realised that setting up a direct physical sales channel in each country would take years so we looked at Second Life and realised a virtual version would give us access to an audience of 8.5 million people.
“Now that we’ve assessed the opportunity we are working on selecting the right security platform to ensure safe transactions,” Evans says.
By John Kennedy