Sunday, March 04, 2007

Think you could be baptized in Second Life? If God made everything, I guess he made virtual water too. Sorry for the grabby introduction - I'm not sure anyone would read this if it didn't start off sounding sexier than it is. Now that you have torn off the wrapping paper...

I spend a lot of time on LinkedIn, and I recently responded to a question from someone there. He asked if there are any real business opportunities in Second Life (SL). If you don’t know what it is, check out before you read on.

Most of what the other folks have discussed has centered on SL itself. I would like to bring a slightly different perspective. I believe there is no doubt whatsoever that SL-like environments will become very important components of the global economy *eventually*. Eventually could be 10 years, 20, 30...who knows. But way before they become a critical part of everything, they will continue to occupy a growing segment of the gaming industry.

The problem in trying to build a business or business opportunities around the trend is that "SL-like" environments does not guarantee by any means that SL will even be part of the industry when it takes off. There are many powerful firms with more resources and experience in 3D, massively multiplayer games, gaming hardware, marketing, etc.

If you think back on the last few quantum shifts in communications and computer technology (the Transistor, Graphical User Interfaces, Digital Cell technology, the graphical web browser, etc.) you will find that it is very common for innovators to fail commercially. They just prove there is traction, and someone better financed comes in with big tech and marketing resources and grabs the ball.

If you accept this reasoning, I think the best way to play it is to write tools for use in SL-like environments that do not commit you to SL itself but that enhance the user experience. I would suggest community-based applications for sharing and selling 3D objects, creating object and texture repositories, networking, data mining, marketing, etc.

During the .com bubble, things were all about technology until the technology started to coalesce, then it was all about content (and still is). I think this will be true of the technology around 3D immersive environments as well. Content is what the big boys need when they want to build competitive systems quickly. It is gold, and the only folks that have it are the ones that spent the last few years building it.

If you are intent on being an early mover, my advice is to look at what succeeded in the last decade in terms of Internet enhancements, and find analogies in the networked 3D world.

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