Second Life: Its potential for a small company?

<table of contents>

Executive summary...............1 Introduction..............2 Methods..............3 Interpretation of Results................7 Conclusion................8 Reccomendations............8

Discussion...............4-6 Figures..........................9 Results................7 References................9

1.0 Executive summary
Massive Interactive is a growing and influential digital media company, creating interactive work for many of Australia’s leading companies and events. With their rapid increase in popularity and growing reputation within industry circles, Massive’s is considering forming an online presence within the global virtual environment Second Life. “Second Life is a 3D virtual world where people use avatars to explore and commune with other people.” Second Life has grown notably since 2003 having over 10 million registered users and growing at a rate of 10,000 new members per day. This report undergoes research to find if the decision to introduce Massive Interactive as an online presence to the hugely popular site ‘Second Life’ is ultimately profitable and will evaluate factors in order to decide whether to go ahead with the project.


1.2 Introduction
There has been a massive increase in the popularity of companies becoming associated with Second Life. For many I.T companies, creating an online presence and modelling a place of work has boosted and invigorated the company’s role. The fusion of a company and the online world of Second Life have proved extremely successful with I.T companies such as H&R and DELL, who have developed techniques to maximize user interactivity and replicate the real life ‘shopping experience. At ‘Dell Island’ customers can even “builds a virtual PC and then buys it online” bringing online interactivity to new depths. The consumer has total freedom and navigational control. At Cisco Systems, users are drawn to the lucrative company-sponsored user group meetings with auspicious keynote speakers such as John Chambers, Cisco’s CEO, and Tom Malone, an MIT luminary. For Massive Interactive, a gallery of interactive work could similarly boost the company’s profile and the possibility of creating a forum for interaction amongst employees and clients to discuss their projects and reviews. Second Life will be able to maximize Massive’s company’s profile, allow clients to come in and inspect their gallery, feel inspired and have an interactive discussion on the progress of their briefs and projects.


1.3 Methods
The project will be a research-based one, which investigate various sources in order to assess and analyse the potential gain for ‘Massive Interactive’ to join Second Life and for designers to build an online presence the company. The investigative sources, listed below in figure 2.1 which will ultimately determine the decision, will be evaluated according to quality of information, reliability of sources, cost effective, time, relevance to research, and drawn up in a ‘decision matrix’. The criteria will help to determine the usability of the information, and a qualitative, and quantitative report will then be presented in order to present the final outcome of the research. FIGURE 2.1:

Physical: 3. 4.

Surveys: survey submitted amongst TAFE campus Interviews: interviews conducted with second Life participants

Electronic: 5. Web engine: 6. Online survey: Survey submitted amongst online Second Life users 7. Blogs: Online blogs such as


1.4 Discussion
OPTIONS TO CONSIDER LIBRARY SURVEYS SURVEY BLOGS CRITERIA WEIGHT Rate Score Rate Score Quality Of Information 5 1 5 4 20 Cost Effectiveness 4 2 8 5 20 Reliability of Sources 3 1 6 3 9 Time 2 4 8 2 4 Relevance to research 1 2 4 4 4 TOTAL SCORES 26 43 INTERVIEWS WEB ENGINE Rate 2 5 3 2 2 Score Rate 10 20 2 4 3 53 4 5 6 5 3 Score Rate 20 20 2 10 3 61 4 5 6 2 3 ONLINE Score Rate 20 20 2 4 5 44 2 5 6 4 5 Score 10 20 2 8 4 60

My personal research has gone through the various factors that will decide whether or not to go through with the project. After evaluating the DESION MATRIX (ABOVE FIG. 2.3) it is apparent that the method of a web engine is best suited to researching this project. Therefore this will be the final option chosen for research. The results will be written up in a final chart and a final conclusion will be assessed. DISCUSSION: Cost: The current cost for establishing an Island is $837.50 (US Dollars). Additionally, a monthly maintenance fee of $295.00 (US Dollars) is also applied to all accounts. The cost of a private Island in Second Life gives the user 16-acres of virtual space and an allowance of 15,000 prims, (the currency used in second life) While this is not an exorbitant cost for a thriving company, it no less is quite a substantial contribution to a cause, which might not guarantee profitable gain. This sum could quite easily be awarded to annually upgrade system software, or another more concrete investment. Additionally maintenance of the island space will require at minimum of 50 hours a month. This will most require the skills certainly have to be an I.T specialist in conjunction with several designers. This must be evaluated according to cost effectiveness given that these employees will have to sacrifice time working on projects for maintenance of the Island.

1.4 Discussion
Setup Time:
Fig 2.3 Impression made on Second Life companies. Usually private islands will be delivered in about 10 business days of placing your order. However, some companies have reported delays in getting their Island in Second Life setup and billing agreements resolved. For this reason, it is advised that companies ensure at least 6 weeks time.


The success of a second life company is hard to convey quantitatively, as this is such a new and growing technology. The CFO of Linden Labs (the company that created Second Life), John Zdanowski, led a real-world presentation titled “The Virtual World of Second Life” where he outlined the benefits of Second Life as a business venture, such as the fact that Second Life residents spent more than 28 million cumulative hours in the virtual world in February alone, and they own more than 1 billion square meters of virtual space. They have also “created almost 200 terabytes of digital goods, with more than 50,000 “in-world” businesses claiming virtual profits.” There are approximately 8.3 million Second Life residents who spend $1.7M on virtual goods and services daily. Here is an image from ‘The Marketing opportunity of Second Life’, demonstrating the success of online businesses involved in Second Life.

Second Life is also an excellent platform for market research; Adidas allows customers to design their own sneaker in Second Life, helping them to design more remarkable “first life” sneakers in Second Life, helping them to design more remarkable “first life” sneakers. Mazda has also ventured into designing an experiential marketing vehicle; the car’s designers even appear in virtual form to launch the new model. Just as the web replaces and extends the capabilities of traditional print media, Second Life is extending the capabilities of broadcast media and chat. “Second Life now surpasses the intensity of broadcast advertising at an even more favorable price point than print.

Fig 2.4, Total Residents by month August 07-April 07


1.4 Discussion
A report by Gartner reports that there are three challenges that organizations face in using Second Life, listing Graphics Card Issues
, as the first; Second do not use all graphics cards, placing pressure IT departments that do not have access to an adequate PC with an adequate graphics card. The second challenge companies face is the website maintenance downtime; an organization that wishes to second life for business purposes, such as running training sessions, may have to delay or reschedule those sessions if loss of service occurs maintenance restarts. This can be very detrimental to a company, which relies on constant website stability, and could mean a huge financial loss to the company. The third challenge would be competition from other virtual environments. By the end of 2009, Gartner predicts that because of continued technical issues, consumers and consumer-facing businesses will seek other virtual environments as alternatives to Second Life. The solution most conducive to the biggest of these problems; Consumers simply fearful of the great unknown and the intimidations of an unknown world, is to make the virtual worlds as user-friendly as possible. Increasing usability, navigation and aesthetic will provide users with a sensory adventure as opposed to a confusing and hostile place they would prefer to spend as little time as possible in. In a chart sourced from a According to a research report, Real Life Brands in Second Life, released by Market Truths, 49% of SL residents think the presence of real life brands is positive; and about a third have a neutral attitude. Therefore it seems not all second Life residents are even aware of branded presences of companies.

Fig 2.5-Overall attitudes towards real life brands currently in Second Life.


1.5 Results
It seems that the virtual branding of a company in Second Life is a complex and challenging decision to make. Although it is clear that the world of Second life is growing exponentially, and for many companies this has proved very successful, it is also apparent that many Second Life users are not actually aware of real life brands. Therefore it will take several designers and researchers some work to reach the target the market users of Second Life who would be interested in navigating a Design Company Island.

1.6 Interpretation of Results:
At this stage (early 2008) Massive is enjoying enormous profit due to the increasingly positive of word of mouth recognition within the industry. However to keep afloat of this vastly competitive industry, where client’s expectations are extremely high the company must recognize that it profile has to be constantly pushed. Clients of today want immediacy and to be stimulated visually almost 100% of the time. In today’s hyper-sensory world, design studios are placed in a position where they must be at the cutting edge of technology and web-trends. Massive needs to integrate its cutting edge design techniques into its ‘Island’ while utilizing concepts to encourage Second Life users to understand more about Real Life companies and what they provide while simultaneously not repelling new Second Life with the technology.


1.7 Conclusion
Massive Interactive implementation of a digital Island within Second Life will be a positive step in its evolution into today’s technology. Its design and aesthetic will be carried over to Real Life’s Virtual world, and aid clients to discuss projects online with designers, and sit in board meetings over potential briefs. This will allow Massive to expand themselves globally, as companies will easily access them online, interacting in board meetings and more.


1.8 Recommendations
With more then 2.3 million Second Life ‘residents’ there is little doubt that Second Life’s popularity is growing. It is a tool that, while needs to be researched and understood in its effectiveness for marketing and publicity, is one that will reach a new type of consumer and bring new elements to companies trying to ‘push the barriers’ of communication and exchange of ideas. Many design organizations already exist of Second Life, who aim to create virtual environments for both commercial and non-commercial use, and provide graphic design, decor, scripting, and landscaping services for Second Life. For Massive Interactive, a potential innovation would be an Island with real life services, where clients can come in and explore a world, which exhibits a gallery of work, which the company has designed, from real life banners, and print advertisement, to interactive multimedia, web pages and animations. Clients ‘avatar’s’ can also attend company meetings, and have dynamic input into their projects. While designers must understand that not all clients will be enthusiastic to a Second Life ‘Island’; it may be the very slant a cutting edge design agency such as Massive Interactive can use to expand their client base and increase their global identity.


1.9 Figures
Page 1. Executive summary. Secondlife.jpg. Page 2. Introduction. Secondlife1.jpg, Secondlife2.jpg. Secondlife. com Page 3. Methods. SpaceportAerial.jpg. Page 5. Discussion. Fig 2.3 Impression made on Second Life companies. Page 5. Discussion. Fig 2.4, Total Residents by month August 07April 07 Page 6. Discussion. Fig 2.5-Overall attitudes towards real life brands currently in Second Life. default.asp Page 8. Conclusion. Phillips_secondlife.jog. Phillips.jpg

2.0 References
1. The Marketing opportunity of Second Life’, 2. report, Real Life Brands in Second Life http://sl.markettruths. com/reports/default.asp


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