Second Life SWOT Analysis
What is Second Life? In the words of its creator Linden Labs…
Second Life is a 3-D virtual world entirely built and owned by its residents. Since opening to the public in 2003, it has grown explosively and today is inhabited by a total of 4,836,223 people from around the globe. From the moment you enter the World you'll discover a vast digital continent, teeming with people, entertainment, experiences and opportunity. Once you've explored a bit, perhaps you'll find a perfect parcel of land to build your house or business. You'll also be surrounded by the Creations of your fellow residents. Because residents retain the rights to their digital creations, they can buy, sell and trade with other residents. The Marketplace currently supports millions of US dollars in monthly transactions. This commerce is handled with the in-world currency, the Linden dollar, which can be converted to US dollars at several thriving online currency exchanges.
Avatrian S.W.O.T. Analysis for Second Life:
Described by the Economist magazine (September 28, 2006) as a petri-dish for innovation, Second Life is undoubtedly the pre-eminent metaverse platform. It achieved this enviable position when Linden Labs granted the intellectual property rights for all products made “in-world” to its original creator. This revolutionary idea catalyzed an
enormous engine for creativity and entrepreneurship within the virtual community of Second Life. Since each resident can reap the rewards for his or her own innovativeness and hard work, the Second Life economy has grown to become a viable commercial marketplace. The in-world currency of Linden$ is stable, does not suffer from inflation swings, and has a continually strengthening value against the dollar. Furthermore, the Linden$ is highly liquid and can easily be converted back to the US$ at any time. In addition to the progressive intellectual property terms, Second Life also has the advantage of being able to attract substantial media attention. Its operations have been covered by the BBC, CNN, ABC and every other major news network. Reuters has also realized the growing importance of the Second Life platform and has assigned a full-time journalist to report on the most noteworthy in-world events. The buzz and excitement surrounding Second Life is critical in solidifying its relevance in the technology world. It also effectively promotes the platform to future participants and contributes to its exponential growth (currently at 20% per month).
Probably the most unique characteristic of Second Life is that, during its short history, it was able to capture demographics that are normally difficult to obtain in on-line digital communities. At present, Second Life statistics show that there is almost equal
participation between the sexes at 41.95% for men and 40.05% for women (Second Life Manual, December 2006). And the real life ages reported currently averages to 32. This is not a world of purely pimple-faced, teenage boys. The data is an evidence of Second Life‟s universal appeal. And, this diversity of residents will only ensure the richness of in-world developments.
Ironically, the weaknesses of the Second Life platform stems directly from its very strengths. First of all, its wide popularity has lead to congestion and frequent lags in the system. The current infrastructure at Linden Labs is not able to keep up with the volume of new members. And “the grid” is often subjected to unexpected updates which render it unavailable to users. Secondly, Linden Labs „laissez faire‟ attitude towards residents‟
activities is a double-edged sword. Although it has encouraged innovation and creativity, it has also brought sub-standard creations and even raunchy elements into the virtual community. Wired Magazine (October 2006) accurately describes this phenomenon as the tragedy of the commons in Second Life. Not everyone has aesthetic sensibility. And Second Life‟s landscape dotted with ugly sprawl is a testament to this fact. Finally, Linden Lab‟s continued price hikes have made participation beyond a basic account
nearly unreachable for many individuals in the real world. If the pattern of land price increase coupled with account stipend decrease continues, there is a strong likelihood that the bulk of Second Life‟s future residents will only be well-heeled individuals from
developed countries. And, this will undoubtedly choke off the diversity that is fueling the creative expansion of the virtual world.
Second Life presents many opportunities for entrepreneurs, developers, businesses, and non-profit organizations alike. It is a social networking platform which places heavy emphasis on user-generated content and communications. For this reason alone, Second Life can probably be regarded as the best example of Web 2.0 technology. It has a thriving marketplace. And, even though there is already a large amount of development by residents in-world, there are still many products and services that are unavailable in Second Life. Identifying these unmet demands and making them available to residents is an opportunity for those who want to engage in Second Life‟s commercial arena. Last January of 2007, Linden Labs has also open sourced the Second Life API to the general public. This means that there is now a way for developers to communicate and pass instructions to the main engine that drives the Second Life grid. This opens up a whole range of new applications that can be provided to users. For example, email, chat, and instant messaging communications in-world can be integrated to more widely popular software applications already used at homes and businesses. The API open sourcing puts the development of Second Life‟s virtual environment in the hands of many talented programmers (far beyond the number of software engineers that Linden Labs can host in house). If the developer community widely adapts it, many useful applications that make Second Life even more functional will come about. And, this will place Second Life in good path towards becoming the internet in 3D.
It is also important to realize that business transactions and marketing should be handled differently in Second Life. Business models that work in the real world does not automatically succeed in-world by translating it directly. Avatars behave differently from their real counterparts. And, blatant marketing is not appreciated by many residents. It is important that new participants provide a sense that they are bringing something unique to the community and not just there purely to sell and profit. Collectively speaking, the Second Life community has a pervasive attitude towards utopian idealism. This has to do with the early history of the platforms‟ development and the purpose of membership for most of its pioneer residents. Because of this, aggressive product push is most likely going to be met with resistance. Subtlety is always the preferable method. From a technical standpoint, the biggest threat to content providers is the inability to back up work off-world. Although, creations can be copied to as many inventories as possible, all the items are still stored in Linden Labs‟ servers. This leaves creators, especially the
ones who have invested in many virtual items, at the mercy of Linden Labs backup recovery system. So far, no massive data loss has occurred. But until virtual creations in Second Life can be off-loaded, content creators are not in full control over the state of their work.