Lots of commentary out there this weekend on virtual worlds such as Habbo Hotel — which Wagner James Au writes about for GigaOm here — and Second Life, which is the subject of a feature in the New York Times and one in the Globe and Mail as well, by my colleague Erin Anderssen. And then there’s the somewhat ambitious prediction from the CEO of ICANN that virtual worlds are “the future of global commerce.”
That last one might be a bit of a stretch, considering that — as the NYT piece notes — a number of the companies that set up shops in Second Life (such as Adidas) or built their own private islands (such as Wells Fargo) have pulled up stakes and departed for greener pastures. Maybe when the guy who sells superfast rollerblades in Second Life becomes a global enterprise, the ICANN CEO’s prediction will have some merit.
Until then, Second Life seems more interesting to me as a social experiment than a business proposition. The fascinating thing is that even in a world where they can be and do anything they want (which can also cause problems, as Erin notes), people choose avatars that look like supermodels and spend hundreds of dollars on shoes. In an interesting economic twist, people won’t buy things that appear expensive in Linden dollars, even though in “real” money they are extremely cheap.
Habbo Hotel, as Wagner notes, doesn’t get a lot of publicity — perhaps because there are no blue-haired vixens with gravity-defying breasts in Habbo, and no flying pink penises either — but it definitely deserves some, and perhaps more than Second Life. Although it offers only blocky, 1985-style graphics, it has become a hit with young users and generates revenues of about $77-million (likely orders of magnitude more than Second Life).
Wagner says that a recent talk by one of the principals at Sulake — the Finnish company that created the site — made several points about virtual worlds, including the necessity for multiple revenue streams and the high turnover rates that such “games” have (something Second Life has also demonstrated). Gamasutra has more on the address here.
To me, one of the most interesting things about Habbo is that it is what the Sulake founder calls “a gameless game,” in which virtually anything can become a game. When my 12-year-old daughter used to play it a lot, she played something called “falling furni,” in which tiny avatars tried to catch pieces of virtual furniture as they fell from the sky.
Sounds dumb, doesn’t it? But she loved it. Second Life is also a gameless game in many ways — and that is a big part of its appeal. Whether it can ever become a real business still remains to be seen.