Virtual worlds set for second coming

Analysis: Don't believe the (lack of) hype…

Not hearing much about virtual worlds these days? They're not dead, says Tim Ferguson - just preparing for the next round.

Virtual worlds such as Second Life have a bright future, according to experts, especially as businesses start to realise how they can be used for collaboration within their organisation and with customers.

A couple years ago, big names in tech and business were rushing to capitalise on Second Life's popularity by building 'islands' and headquarters in the virtual world - or using it to sell products in a novel way.

Second Life in pictures

♦  Photos: IBM serves up Wimbledon in Second Life
♦  Photos: Renault F1 races into Second Life
♦  Photos: Second Life business evolution
♦  Photos: Second Life - whose HQ can you view?
Plus read what Linden Lab CEO, Mark Kingdon has to say about the virtual world in this exclusive Q&A

But since that initial rush, things have quietened down. Media coverage of virtual worlds has subsided and some early adopters have abandoned their virtual activities after failing to reap benefits from the medium.

So are virtual worlds dead?

Hardly. Now experts predict the virtual world phenomenon is entering a second phase in which businesses will become shrewder about their involvement in such environments and look more carefully at the tangible benefits they can realise.

Realism returns
Emerging technology specialist at IBM, Robert Smart, is confident virtual worlds will become more important to businesses in the coming years.

He told silicon.com: "We're seeing businesses look at [virtual worlds] much more seriously and say, 'If we're going to invest money in this, what can we get back? How can this benefit us?'"

Matt Brotherton, project manager at the applied technology centre in BT's chief technology office, agreed. He told silicon.com: "People are taking a step back and trying to look at what the real beneficial uses are."

One example of this, he said, is a turnabout from the public splashes companies made when creating virtual headquarters in Second Life and other worlds. Now businesses are quietly creating private islands to experiment with the technology before opening their venture up to customers.

David Naylor, partner at law firm Field Fisher Waterhouse (FFW) - which has a presence in Second Life - said businesses are becoming more interested in virtual world technology and are finding "more sensible commercial uses for it".

"The hype has died down a bit," he said. "But you're seeing a greater volume of more measured media attention and corporate involvement and communication around virtual worlds without it being quiet so fashionably and wildly enthusiastic."

Collaboration to ecommerce
Organisations are discovering myriad ways to benefit from virtual worlds.

The first and perhaps most obvious is collaboration. This includes holding real-time meetings in the worlds with each member participating via an avatar. It can be a big cost saver, as it removes the need to fly workers around the globe.

Virtual worlds can also help teams spread across several locations work together and co-ordinate projects.

The virtual world Qwaq, for example, allows users to create rooms that can store documents relating to a project, and where team members can meet up to share those documents and discuss the project using their avatars, IM and even VoIP.

Another area virtual worlds benefit businesses is marketing. This is where those virtual islands and headquarters come in, as a place for the general public to interact with the organisation. Virtual environments are also ideal for conducting market research and soliciting feedback from customers around the world.

Many organisations are also experimenting with virtual worlds for educational purposes by distributing training material and running courses in virtual environments.

Ecommerce is one area ripe for virtual worlds - but it has yet to take off. Few transactions are taking place, mainly due to the fact many people are not yet comfortable enough with the medium to allow money to change hands in that way. But as people grow more comfortable in virtual worlds, that could change.

To continue reading about virtual worlds, go to page two…

New front-ends, please
Before businesses ramp up their involvement in virtual worlds, though, improvements in the worlds themselves are needed.

In particular, poor front-end interfaces and difficult sign-up processes hold back adoption for business users as well as the general public.

Gartner analyst Steve Prentice described the current user interfaces as "bad to worse".

FFW's Naylor agrees that user interfaces need to be improved as they don't currently meet the expectations users have of them - causing people to quickly lose interest.

IBM's Smart predicts more web browser-based virtual worlds will appear over time, meaning users won't have to spend time downloading and setting up client applications.

Other factors holding back virtual worlds include limited bandwidth and processing power on users' computers. Not enough of either can make accessing a virtual world slow and laborious. The spread of fibre and the continual arrival of faster computers could soon solve these kinds of issues.

Just like the web
Despite these challenges, experts agree virtual worlds have a big future for business collaboration and as a new channel for conducting business.

The teething problems they're experiencing are not unlike those faced by the web back in the 1990s.

FFW's Naylor points out that like the web, businesses initially jumped into virtual worlds before working out what to do with them - and attracted criticism as a result.

Naylor added, though, that many of the companies that persevered with the web ultimately found success. Virtual worlds could follow the same pattern. "It's not going to be an overnight sensation," he said.

Gartner's Prentice said businesses are sceptical about virtual worlds in the same way they were about the web when it first started to attract mainstream attention nearly 20 years ago.

But he believes their true potential remains untapped. "They may become potentially as significant as the world wide web was," he said.