Second Life Content Developer Lays Off Employees
Second Life content developer, Electric Sheep, have one-third of their employees. The Austin-American Statesman Business Blog says there are "indications that the heavily hyped “Second Life,” isn’t as popular among marketers as it was when it first debuted." I haven't dived into Second Life in many a month, so I'll leave it up to writer Lilly Rockwell to explain:
Fortune 500 companies such as Dell and Toyota clamored to set up virtual lands in Second Life. Dell sells customized virtual computers or allows customers to jump to its Web site where they can buy a real computer. Toyota created “Scion City’” where it sells virtual Scions.Companies saw the society as an opportunity at cheap publicity and a shot at wooing the hip, computer-savvy Millennial generation.
But now some companies have left Second Life and other sites remain empty. A July 2007 story in The Los Angeles Times reports that shopping for real world products on Second Life isn’t a “main activity.” And that “some marketers are second-guessing the money and time they’ve put into it.”
I know whenever I spent time in Second Life, I never went looking for real world products. If I did come across some, it was only by chance. It is reasonable that these companies all dived into the virtual world like they did given all the buzz surrounding this "world." According to Forrester Research, "at peak times there are only 30,000 to 40,000 users logged on." That is likely not enough to support the current business model and that much can be deduced by the layoffs already discussed. You can read more in this article which The Statesman points to.
Interesting stuff, what would you do to fix it or can it be done?
Second Life development company lays off employees [Statesman Business Blog]
Super Timsy
Posted to Video Games on 19 December 2007
· Comments (6)
Other stuff like this: electric sheep, mac, marketing, pc, second life, virtual worlds
I think they misinterpreted the information from the get go, assuming SL was just a gigantic advertising page.
It was foolish to go in with such high expectations. You have to understand what it is Second Lifers actually do--hang with friends, play minigames with katanas and buy virtual accessories for their avatars.
And maybe cyber a bit.
Corporations didn't think about that. They just saw ad space. I hate it when they do that.
How ironic that tonight's episode of Rise of the Video Game on the Discovery Channel talked about business in SL.
Companies like these came into SL thinking they were going to make a ton of money but making crappy replicas of their RL stuff. What they didn't do was research the value of their objects in regards to other stores that make the same type of thing.
They were shooting for 6,000 to 7,000 Linden per item (thats about $30US) for half assed, badly coded things when you could go to another place, get something way better for 1,000L or less.
Example. Converse. Converse Shoe company had an entire sim dedicated to their clothes and shoe lines. A pair of converse all-stars (80s replica)... $7,500L
Thats why these companies are failing.
Actually, the biggest misconception many of these companies have is that SL is actually relevant to today's internet marketplace. No huge offense to SL but it ceased to be relevant the second it was incepted, much like AOL or Facebook even now as they're closed entropic systems. All of these social networking sites are operations that only encompass the tiny fraction of the internet that find them useful and relevant. To anyone with a decent scope on the larger picture that the internet conjures up, traffic at these sites looks amazing, but coupled with their limited functionality, poor marketability, and a general lack of cohesive structure they simply become a backwater. Facebook, SL, AOL, MySpace, etc never innovate or advance the internet they just respin old concepts into shiny new packaging. Social networking in closed environments is dead to anyone with a good grasp of how trends move. The only people who don't know this or don't care are the inhabitants not fickle enough to move on to the next great thing. Sadly big behemoth companies don't realize they're months if not years behind the times when they hook up with these offerings and end up getting burned when the advertising dollars go right down the drain.
I play Second Life Regularly. Normally when people play a game called Second Life, they don't want to hear any advertising and what not about Real Life so they shop at Resident Stores that are cheaper and better quality anyways.
Advertisers are used to being able to put up an ad and instantly seeing their sales go up. This used to work. That business model single-handedly brought us television, radio, and newspapers. Advertising paid for all of that.
Now, people have of course evolved and we've learned to ignore advertising. We shut it out. It doesn't work (very well).
So, to many advertisers the idea of being able to bring their old business model into a new hip and interactive world seemed too good to be true. (It was.)
Virtual worlds have not reached their peak. Not even close. But it's an entirely different game. It can't depend on advertising to make it grow. (By the, way, aside from the costs of leasing land, Linden Labs doesn't see any of the "millions" advertisers spend in-world.)