The business opportunities presented by interactive media and 3D virtual worlds

“By 2011, 80% of active internet users will have a virtual world account.”
Gartner Research, April 2007.

This quotation was identified by one of the presenters at HYPHEN on Wednesday evening. The event focussed on the opportunities new technologies bring with specific reference to Second Life and online gaming. There was quite a lot of discussion about the business opportunities these playful, often entertainment-focussed spaces deliver. Apparently BP identified virtual worlds as the “breakthrough technologies for 2008”.

Miniclip's Growth Chart

I don’t think any of us need to be told about the serious business opportunity online gaming brings. The image to the left is Miniclip’s growth chart and although you might not be able to make out the text on the graph, all you really need to know is that the units on the horizontal axis are years and the units on the vertical axis are users (in increments of 5 million).

So what about Second Life’s business opportunities? A few years ago, any business which had a presence in Second Life was guaranteed some publicity out of it but these days that’s not the case. The last Second Life story I heard reported with any gusto was that of Ailin Graef, the Chinese businesswoman who built a business by buying and selling virtual land and made rather a lot of money in doing so. Perhaps that’s the business opportunity Second Life presents…but then, most of us don’t want to build a business in Second Life. We’re busy enough trying run the business we have created in our first lives.

Many companies use Second Life to advertise to its 1.1 million regular users. But only about 7% of the 1.1 million regular users are based in the UK, so if you want to communicate with a UK audience, it might not be the best platform.Business Week Cover May 2006

IBM uses Second Life for internal communications and collaboration. It uses its own private islands to hold virtual meetings and deliver training so employees can meet regularly and access training without leaving a gigantic carbon footprint on the planet. I haven’t experienced a virtual meeting on IBM’s private island but I’m told that they are a richer, more engaging experience than a simple conference call or Skype interaction.

Using Second Life for private business interactions does bring its problems though, namely in the form of security. IBM’s Roo Reynolds says, “We’re never comfortable talking about things like patents because we recognize they’re on Linden’s servers…we can’t talk about anything confidential”.

News broke last year that IBM is launching a new mainframe platform specifically designed for next-generation virtual worlds and 3D virtual environments which will deliver added security, scalability and speed. The platform will provide a seamless development environment which will mean companies will be able to develop virtual world services. Over time this is likely to have a massive impact on the virtual worlds which exist and could easily pave Second Life Screenshotthe way to a 3D internet. Mark Wallace of 3pointD.com says “for some time now, execs have been comparing the advent of virtual worlds to the advent of the Web in terms of its impact on business and communications.”

David Gelardi, IBM’s vice president of industry solutions says, “I would argue that the world doesn’t yet understand the promise of [virtual world] technology.”

Hold on to your hats.