Virtual Worlds Are So, Like, 2005 – Right?

A new study from GigaOm Pro predicts that virtual worlds “will gain widespread corporate adoption as a platform for long-distance conferencing and training, job fairs, and other business uses.”

The study authors predict that, “After reaching a critical mass in the next 12-24 months and doubling year over year, the industry will soon be earning billions of dollars in annual revenue.”

Um, hello? Hasn’t anyone told these guys that Second Life peaked about three years ago? In 2007 there was a spate of stories like this one in The Los Angeles Times, saying that “Four years after Second Life debuted, some marketers are second-guessing the money and time they've put into it.”

At that point the glowing predictions for virtual worlds – that we’d all spend quality time in virtual worlds, flirting with other avatars and buying cool virtual threads with our virtual money – seemed as overinflated as real-estate prices. “Despite the hype, real life businesses are closing down their Second Life outposts due to little to no interest in them,” reported TechCrunch.

Second Life continues to grow, according to creator Linden Lab – although a close look at these numbers reveals them to be fairly soft. The hype around Second Life, and virtual worlds in general, has mostly faded, notwithstanding a recent Hollywood action thriller starring a certain bald action hero.

Interestingly, many corporations haven’t gotten the memo saying that virtual worlds are so, like, 2005. Cisco (CSCO), for instance, has maintained a healthy presence in Second Life. More importantly, the networking giant is working to build virtual worlds of its own, seeing them as an important new frontier for doing business and interacting with partners, employees, and suppliers. (I guess virtual reality is for people who can’t handle videoconferencing.) So, while Second Life has more or less flopped as a virtual shopping mall, virtual worlds may have a future as more focused arenas for actually doing business. It wouldn’t be the first time that the marketers and publicists got it wrong.