The online virtual world Second Life was launched in 2003, and with it, created a new understanding of the way in which the Internet could be used for social, political, and economic purposes. The software’s innovative design set a precedent for much of how internet users behave today. While Second Life has been abandoned by many of today’s internet users, its active userbase dwindling slowly from well over a million in the mid-2000s to around 600,000 by 2013 as a greater variety of social media platforms have been created, its transformative impact upon Internet culture, ecommerce, and the nature of social and political action online continues to be seen in a variety of contexts.
The company behind Second Life, Linden Lab, was founded by Philip Rosedale in 1999, originally with the purpose of creating virtual reality hardware in mind, However, at the time VR was still in its infancy, and attempts to create commercial hardware ended in failure as all prototypes were difficult to use and failed to offer the smoothness and ease of movement necessary to create a truly immersive digital environment.
The company the developed the online environment Linden World, a software application in which users were able to socialize with one another while completing tasks which functioned as the Alpha-testing phase. The name “Second Life” was chosen for the Beta-testing phase, and a greater emphasis was placed on the social aspects of the application, with users being allowed to create their own tasks within the environment rather than being given any goals.
In this way, users are given greater control of their Second Life experience- the environment is whatever they make of it, and what they do within it is their choice. Users are also able to create items within the game such as “skins”, cosmetic additions to their avatars, and buy and sell these with the in-game currency “Linden Dollars”, which, if the user achieves a surplus, can be converted into real-world money at a rate of approximately L$252/USD$1.
Interest in Second Life grew throughout the mid-2000s, as the economic potential of the application began to be noticed by the world at large as several successful businesses stemmed from the platform, and the prospective application of the virtual environment in the fields of education and health began to be considered. Traffic peaked in 2008 with users collectively spending over 28 million hours on the application in January alone. While attention has faded significantly since this time, Second Life’s transformative nature lives on, having shaped much of the way in which the online world is conceptualized and navigated today.
Transformation and Innovation.
At the time, Second Life was an anomaly within the landscape of the internet- despite appearing similar to MMORPGs, with no set objectives in place, the virtual world could not be considered a game, and at the same time, by allowing the user the ability to create an avatar and explore a virtual environment, it was entirely different to any forums or early social media platforms at the time.
Second Life came at a time at which social connection in the online world was somewhat unheard of- it was released only months before Myspace was founded, and came to shape online interaction, normalising the creations of avatars to represent the self, the practice of socialising with individuals around the globe, and pioneering some of the first social media micro-celebrities.
Second Life also pioneered elements of e-commerce including the trading of virtual goods by allowing its users to create, buy, and sell various items within the game’s free market as well as renting virtual land and properties with its in-world currency of Linden Dollars, exchangeable for real world currency.
Having not only set precedents in the social and economic realms of online culture, Second Life was also responsible for early developments in online politics, having led to legislation surrounding trade of virtual goods and services being introduced due to its innovations within the field, and was the exemplar for much of the way in which the Internet and online social networking is used for political gain and networked activism today.
The business model of Second Life has its focus in three areas- voice services, Linden Dollars and virtual trade, and its virtual real-estate market.
The appeal of voice services within Second Life is difficult to understand in a more current context, in which several communicative platforms that offer voice services such as Skype and Facetime are available to the consumer; however, Skype launched months after Second Life opened, and Facetime was not introduced for several years. At a time where online communication was restricted text the prospect of verbal interaction was both innovative and enticing, as textual interaction is often hampered by missing the nuance conveyed by tone and the cues of body language that could be replicated by the behavior of the avatar. This was an incentive for many to begin using Second Life, leading to an increase in the size of its userbase and, therefore, in the amount of revenue Linden Lab was able to accrue (Williams, Eyo, & Akpan 2011, p.97).
Another major factor of the business model of Second Life is its introduction of in-world currency, Linden Dollars, the ability of players to exchange this currency for real-world money, and the free market of virtual goods within Second Life stemming from this. Linden Dollars can be bought with real-life money, and with an increase in virtual funds, the user is able to access more content within the world. This led to significant revenue being created from the virtual world- much like the real world, it’s free to enter, but takes money to really enjoy.
Similarly, all users in Second Life are given the ability to create a variety of items and skins. The ability to make content to enhance the Second Life experience for users has lead to an economic chain of supply and demand amongst users, a free market left uncontrolled by Linden Lab itself and moderated by users. This becomes especially lucrative considering the currency can be exchanged for real currency, and many players have managed to make sizeable amounts of money from this, including Second Life user Ailin Graef, the woman behind avatar Anshe Chung , who was dubbed the world’s first “virtual millionaire” after making upwards of a million dollars in 2006 from a variety of ventures within the online world. The prospect of earning real life money from online ventures was an incentive for many users in Second Life and attracted many to join, becoming an important contributor to the virtual world’s popularity.
The business model of Second Life is also heavily reliant on its virtual real-estate market. If a user wishes to own property within the world of Second Life, they pay money in order to own a plot of land within the space, paying this lease monthly as they go about their life within the virtual world. This is appealing to users for a variety of reasons; not only because this allows for a full realization of the user’s Second Life but because they are able to then rent out the property to other users. This is one of the ways in which Ailin Graef was able to make her millions; by leasing large amounts of virtual property and renting it out to more casual users within the world that did not wish to make a full investmentt. The virtual real-estate market has led to a great amount of revenue being created for Linden Lab ($60 million USD in 2014 alone) and is a crucial element contributing to the success of its business model.
Partnerships and Competitors.
Several businesses have partnered with Second Life in order to market to users within the world, and the amount of real life businesses operating within Second Life are too numerous to list. However, notable examples include Disney, which collaborated with Linden Lab in order to prototype various CGI figures from various films. Harvard Law School offered a course called “CyberOne: Law in the Court of Public Opinion” that operated entirely within Second Life in 2006, and Toyota used Second Life to create a model of the Scion xB and promote it to consumers there. Second Life has also been used to conduct studies on health and education, and applications of virtual online environments to these fields, with Linden Lab supplying data to the groups involved in conducting studies and allowing research to take place within the world (Beard, Wilson, Morra, & Keelan 2009, p. 20).
In terms of direct competitors, there have been few virtual worlds able to keep pace with Second Life; considering it allows users to choose their own activities within the environment, one is able to make Second Life whatever they want it to be, drawing a broad variety of users from many walks of life. However, Second Life is limited to players 16 and up, and so younger demographics are drawn to virtual worlds such as Habbo Hotel and Club Penguin, which have no such restrictions on age. Second Life also competes with online virtual world IMVU, which is aimed specifically towards female users, its more narrow market meaning it is able to target females specifically rather than relying on broad appeal in the way Second Life does.
However, more indirectly, Second Life competed at its peak with the social media site Myspace, which rose to prominence at the same time, with many users being drawn to the ability to showcase their real-life selves and communicate with those they know in real life, rather than using an avatar to connect with strangers. However, the popularity of Myspace has dwindled, leaving Facebook as the main social media platform Second Life must compete with. Many applications that use voice chat have arisen in recent years- Skype is Second Life’s main competitor in this field, due to being the platform with which most professionals use for voice services, although the gaming-related chat client Discord has become favored for casual, social online voice chat in recent years.
Several businesses stem from Second Life including Anshe Chung Studios, which operates a variety of ventures including real estate within Second Life and creating and selling virtual goods in a variety of MMORPGs, and the Electric Sheep Company, which designs content for three-dimensional online virtual worlds. Linden Lab is also creating an offshoot of Second Life, referred to as “Project Sansar”, in which users will be able to access the world of Second Life through virtual reality if they so choose.
Social, Cultural & Regulatory Change in the Online World.
Being the first major social platform in the online realm meant that Second Life was the catalyst for much of online interaction today, positive and negative. Due to there being no “goal” to achieve in Second Life, many users approach it as they would any other social network, chatting freely with others and making connections across the world. Second Life may have served to normalize befriending strangers from across the globe- rather than being something done by those in forums for niche interests, it became available to even the most casual internet user who could join Second Life for any purpose.
Second Life was also the catalyst for social and culture change in the online world, shaping the way in which political discourse is conducted today. Online clashes between left and right wing political groups today mirror the political upheaval seen between socialist and conservative groups operating within the landscape of mid-2000s Second Life- when the far-right French politial party Front National attempted to create a presence within the environment they were chased out by Second Life Unity, an international socialist organisation that formed within the platform. There were also several embassies set up in the environment for countries including the Maldives and the Phillipines, and some politicians set up campaign headquarters within Second Life. There was also a precedent set by Second Life surrounding online currency and trading due to the introduction of Linden Dollars, with the US government investigating the Second Life economy and putting legislation in place in order to protect online consumers.
While Second Life may not have the cultural relevance it once did, its impact upon the online world cannot be ignored. It elicited political, cultural, and social change in regards to networked activism, virtual worlds, and e-commerce, and transformed the way in which many online communities operate today.
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