AFTER SEEING “AVATAR,” the movie, I wondered whether the record-breaking intake at the box office might spur more entrepreneurial activity in places populated by, er, “real” avatars—like Second Life, the best-known and largest of the 3-D virtual-world platforms. Could Avatar do for avatars what Titanic did for Leonardo DiCaprio?
An avatar is a digital, simulated representation of a person. On sites like Second Life, There and ActiveWorlds, you can engage your avatar alter ego in all sorts of escapist fantasies, like designing and dancing in your own underwater disco. When Second Life and its peers came out in 2003, companies rushed in to build outposts and sell products to the hoards of consumers rushing in to play. Attire companies like American Apparel and Giorgio Armani and tech giants like IBM and Dell set up virtual stores, using the build-it-and-they-will-come approach. Problem is, nobody came. The supposed consumers used the site to attend concerts or become unicorns, not to buy a computer. And what did they want to buy? White hair and goth outfits for their avatars. Which is not to say entrepreneurs should dismiss the immersive reality trip. In the past few years, much has changed, and many companies are doing virtual business—just not the kind they originally envisioned.
Two years ago Second Life, the largest of the virtual sites, with 1 million monthly visitors, created an enterprise group, to better cater to businesses. Companies like Dell shut storefronts and retooled their virtual-world platforms for meetings and training. A whole flock of specialized sites now provide business services, such as hosting conventions. “Companies learned they didn’t need to have a shop on Main Street,” says Gartner analyst Jeff Mann.
It turns out, these virtual?worlds may be especially well suited to new companies. In these simulated realities, one’s avatar can attend a trade show, keep up with technology, show off a new?product and network with a very global reach. The sites cut costs—both to budgets and the planet—by reducing travel, and they lend companies an undeniable cool factor. Software engineering firm Agile Dimensions had 35 avatars attending its recent conference on Second Life; the firm says the conference cost $8,567, mostly in software expenses, as opposed to the $35,695 it would have cost to host a face-to-face meeting. It saved 27 tons of CO2, to say nothing of the ham sandwiches.
With many new?technologies, there’s a period of hype-fueled growth, followed by disillusionment. Only later does stable growth arrive. Virtual worlds have reached a stage where new users continue to build, even though the media has moved on to fan the fires of Facebook and Twitter, says Douglas Thompson, CEO of Remedy Communications, a Toronto marketing firm. Second Life says the time spent on the site by users increased 21 percent in 2009. Most paying customers on Second Life are purely social, but it still boasts 1,400 business-related organizations as users. Thompson says traffic on Metanomics, his company’s Second Life video presence, has picked up in the past year, with 50 percent of new users coming from small or medium-size companies. “People no longer ask what an avatar is,” says Thompson. “We can thank Jim Cameron for that.”
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