Will The Last Corporation Leaving Second Life Please Turn Off The Light
The LA Times has an interesting article up on the failure of real life businesses in Second Life. — The crux of the piece is that despite the hype, real life businesses are closing down their Second Life outposts due to little to no interest in them.
Context & Ripple Effects
This closes a week that was already turning skeptical: GigaOM ran a debunking of five recurring business myths about Second Life on July 12, and the Los Angeles Times followed on July 14 with marketers themselves admitting their doubts — the TechCrunch post here is amplifying that same reporting, which syndicated widely. The through-line is behavioral: per the Times' reporting, residents' avatars simply do not shop, which guts the premise behind brand outposts.
The retreat also lands after a rough spring for the platform's image — a threat to its virtual economy surfaced in late 2006, and May 2007 brought both a demographic reveal that Europeans outnumber Americans three to one and damaging press around in-world conduct. For Linden Lab, the corporate-exodus story compounds those hits at the moment its 'just got a little more real' positioning depended on real-world brands validating the economy.
First-order effects
- Companies that built branded islands and outposts are closing them outright, writing off the design and staffing spend because resident traffic never converted into customers.
Second-order effects
- The agencies and consultancies that sold Second Life presence-building lose their marquee pitch, while Linden Lab faces pressure to prove the platform works for commerce rather than spectacle — its Lindex-based Linden dollar economy was pitched precisely on real-money utility.
Third-order effects
- If the pattern holds, corporate adoption of consumer platforms gets judged by measured resident behavior rather than press-release headcount, forcing platforms seeking brand money to publish engagement data they currently have no incentive to disclose.
The trend: Brand experiments in virtual worlds are entering a correction phase, where exit announcements — not user counts — become the metric that reprices platform hype.