Our usage and tracking data show that these visitors are devoting considerable time to the virtual expressions of their lives, especially compared to the amount of time one commonly expects people to spend on a web page, which is measured in seconds. In contrast, the average stay of a visitor to the NMC’s virtual campus in Second Life is 42 minutes.

In terms of typical engagement studies, spending three-quarters of an hour on any activity is consummately rare in today’s fast-paced world. More than any other aspect of virtual worlds, it is the ability of the technology to keep people’s attention that is driving interest in virtual worlds within the education and training sectors, and that interest is widespread. Over the past two years, an estimated 4,000 educational projects have emerged within Second Life alone, and of the 13,400 regions in Second Life that were active at the time of this writing, more than 1,400 of them were being operated by bona fide educational institutions. Add to this more than a hundred other projects on open-source platforms like Project Wonderland, Qwak, and Croquet.

Education is growing so fast in virtual worlds that it is no longer possible to maintain an accurate list of all the examples of education and training that exist. Immersive, high-fidelity examples can be found in dozens of fields and disciplines, and the list grows daily. Among the fields in which many examples may be easily found are these:


1

  • Emergency Response
  • Homeland Security
  • Health Care and Wellness
  • Biotechnology
  • Nanotechnology
  • Government Outreach
  • Civic Participation
  • Cultural Awareness
  • Global Warming
  • The Environment and Ecological Action
  • Civic & Economic Development
  • Business
  • Languages and Cultures
  • The Arts

The not-for-profit sector is not yet as active as education, but a number of key organizations, such as the Annenberg, Sloan, and MacArthur foundations, and the American Cancer Society have significant projects, along with hundreds of smaller not-for-profits.


2

Commercial development in the typical sense of how one might think of it on the 2D web has found less opportunity in virtual worlds, and there have been a few high profile experiments by companies like American Apparel and the Starwood Hotels that did not find the success they hoped for. In other areas, however, the economy of Second Life, while small in overall terms, is doing quite well.


2

The most notable aspect, as least in the popular press, is the burgeoning micro economy that is fueled by the virtual Linden dollar, which typically trades at about 265 to the US dollar. The latest numbers from Linden Lab identify about 55,000 small business owners operating in Second Life, but this number is somewhat misleading. By far, most make less than US$100 per month; only about 150 individuals actually make more than US$5,000 per month operating businesses completely within Second Life. Most of the businesses that operate within Second Life produce virtual goods that can be used to build out the world, provide entertainment and other services, or customize one’s appearance.

A much less chronicled aspect of the Second Life economy involves the businesses operating in the ecosystem of Second Life for whom their work in virtual worlds is a real world enterprise. These companies, of which the NMC is one, operate using real currency, real contracts, and standard business practices. A recent survey by Linden Lab identified about 385 such companies who together are expected to produce about US$60 million in revenues this year. These businesses employ about 4,400 people who deliver goods and services in the virtual world, but who work and are paid within the real world economy. The average annual revenue projected for these companies in 2008 is about US$156,000. A little more than a third of all the regions added to the grid by Linden Lab are developed using the services of these ecosystem companies.

Posted by NMC on March 30, 2008
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Total comments on this page: 5

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Peter Miller on paragraph 4:

I could be wrong but I don’t think there are *many* examples from biotechnology thus far but it’s a loosely defined term and I’ll grant that there are some good bio-oriented sims tangentially related to biotech.

April 1, 2008 2:12 am
Prokofy Neva on paragraph 5:

You really do a grave disservice to inworld business, Larry, by making “commercial development” seem as if it is only something external, in corporations, You’re not getting it.

April 1, 2008 11:47 pm
Prokofy Neva on paragraph 6:

Larry, it’s good that you called the Linden’s bluff here on this “positive Linden flow” that doesn’t count tier. But there’s a big difference between $100 and $5000 and there is quite a range and many within that 50,000 or so who do make a living or make a significant income that pays real bills. And that’s pretty extraordinary. And frankly, it’s the only real, tangible thing that we have to point to from this virtuality, and Philip Rosedale himself, when I asked him at SLCC after his keynote in August 2007, about what affect he could say the virtual had on the real, cited inworld business (!). You would think, that with all that citation and all that actuality, we would get more recognition!!!

Education has frankly yet to be proven by real scholarly studies or even anything that is a significant article in something that isn’t somebody’s blog (if you know of a really serious journal that has published anything, cite it). A lot of what passes for education in SL is in fact enthusiastic professors (and even less enthusiastic students, oddly enough, given the MySpace generation) using SL to talk about digital worlds, new media, new communications, etc. instead of having all the tech tech talk resolve to actual content. Oh, sure, I realize novels being illustrated at libraries in 3-D and such, but you know what I mean.

And corporations have not many any profit, and IBM cannot answer (yet) about savings or even whether they have increased work productivity. It’s all very promising, but we do it all a disservice by not trying to measure it better.

I really would like to understand the sourcing of your numbers here on the metaversal service companies. These figures are different than what Glen Linden last published — perhaps they are differnt. I don’t think you can make the claim that 1/3 of the grid is devoted to metaversal agencies — unless of course this is what Glen is telling you know (but it wasn’t so long ago he was saying 15 percent, and so many companies have left).

A real outlier to this sector is CBS, if you are counting their $7 million in the $60 million. I don’t see that they will stay after the CSI:NY episode is done. The Electric Sheep made it very clear that they are moving on from SL and see most of their revenue being generated from other platforms now, Giff Constable has stated this in his blog.

April 1, 2008 11:55 pm
Prokofy Neva on paragraph 6:

And here’s what you really, really need to hear about these 55,000 small business owners that you seem so keen to dump in to the pot making the least amount of money (after metaversal agencies, and even after education, apparently). *They pay more tier than you or the corporations*. Why? Because for one, you have the educational discount. For two, many of us actually own more islands than an IBM or a CISCO, and really have to earn our bread prim by prim in the micropayments world.

You’re also forgetting the many thousands of single owners or small group owners who are end users mainly for socializing.

Together, the end users and the small businesses pay most of the revenue of Linden Lab’s income. There are about 12,000 private islands and 4,000 mainland sims, at $295 and $195 respectively. I don’t know what percentage the educational sims are now, but I would say it has to be less than 20 percent, and if the metaversal developed sims are another 30 percent, that’s 50 percent individuals, groups, small businesses (I think non-profits are still a negligible percent, and are subletting or getting freebies anyway).

So it’s the individuals and businesses paying most of the revenue, who are not represented in this hearing at all, or even mentioned, who are the economic engine for Linden Lab, the virtual world phenomenon, and important for the future. The real issue for virtual worlds as I see it now is whether individuals, groups, and small businesses are going to be able to retain even those restricted freedoms they have in the economy and the society (it’s not a democracy), or will they be subsumed by big corporations, including universities, in the name of grid-level account management.

April 2, 2008 12:01 am
Larry Johnson on paragraph 5:

Your point is well taken, and it was not my intention to slight inworld business, but rather to highlight the general failure of Fortune 500 companies in finding traction in Second Life. I will look at how that paragraph can be rewritten to make the intended meaning more clear.

April 2, 2008 11:53 am
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