I am sitting on my patio without a care in the world, contemplating the water as it falls softly down the rocks before splashing into a swirling pool beneath, watched over by gently swaying palm trees. It is an idyllic scene, and it is a shame that not everyone can enjoy it.
Well, actually, they can. This is not the real world, but a three-dimensional simulation created by millions of "residents" in Second Life, the phenomenon that may be taking the internet in a whole new direction. Some say it will be a nine-month wonder, others that it will gradually take over much of the time we spend watching television and eventually become a major economy in its own right, generating jobs and income for millions.
How does it work?
Second Life (SL) is not a game: it is what it says it is on the label—a second life, running parallel to, and overlapping with, your "first" life. To envisage it, imagine you are watching a film on television—only instead of actors walking around, there is a three-dimensional representation of you (an "avatar," who may or may not bear a physical resemblance to you), whose movements you control using your computer keyboard. As you walk—or fly—around, you can go shopping, listen to music, attend political meetings, take university classes, start a business or visit a strip joint. You can start building houses or objects on your own, by manipulating basic building blocks (cubes, spheres and so on) in various ways. Most importantly, you can talk, hang out, flirt or fight with your fellow inhabitants. (In some respects, SL resembles a more interactive version of The Sims, the bestselling computer game in history.)
It doesn't cost anything to acquire an avatar if you simply want to explore what Second Life is all about, or attend some of its many events, from pop concerts to poetry readings. But if you want to build on it, you have to pay Linden Lab—which created and maintains Second Life from its base in San Francisco—a monthly fee, in addition to the initial cost of the land. Although my first purchase of a tract of 512 square metres came cheaply as part of the membership deal, subsequent ones cost around $L10,000 (about US$40). Then you need somewhere to live. You can build a home from scratch using the building blocks described above. But I decided to buy a completed house off the shelf, for around L$500, from a real estate company set up for that purpose. After clicking the "buy" button, the house was sent automatically to my SL inventory, from where I dragged it with my cursor on to the plot of land I had bought. Suddenly a three-dimensional house appeared. I could explore its interior, or sit down inside. Then a visit to one of SL's numerous shopping malls gave me the waterfall. Since all these goods are "virtual," in that they are ultimately made of computer code, the number of waterfalls is theoretically limitless, as it costs nothing to produce extra copies. At a time of global industrial decline, a manufacturer's paradise is emerging—cheap, endless production.
When I woke the next day, I found that my neighbour (who lives in Australia) had completed the gallery—see images, left—and a day later a garden adorned with fountains had been added. After that, it was simple for me to upload images from my hard disk to stick on the walls. The most expensive part was buying four leather armchairs, which cost me around L$500. All this reflects the culture of mutual support that characterises the founding residents, which in turn recalls the ethos of the early web before its colonisation by commerce. Commercialisation is also happening to SL, as companies from IBM to American Apparel move in to establish a "brand" presence, just in case Second Life turns into something big.
But Second Life is still a virtual paradise for user-generated content: almost everything on it has been built by its residents. Although it is in its infancy—with about 5m residents compared with the social networking site MySpace's 150m users—it is growing fast. As recently as last July, it had only 330,000 residents. The infrastructure sometimes crashes under the weight of SL's growing popularity, giving rise to fears that it may not be able to cope with further fast expansion.
SL has already become a significant economy in its own right. About $2m of real money is traded every day, and its annual GDP was recently estimated to be around $220m—a figure which is probably already out of date. "Premium" residents, who pay US$9.95 a month for an account get a weekly stipend (currently L$300). But anyone can buy Linden dollars in exchange for real-world currency, or earn Linden dollars of their own by selling land, services or goods, such as tables or helicopters, to other residents. In February, about 113,000 people spent up to L$500, and 571 spent over L$1m.
If proposals to allow banks to lend money in SL are implemented, then SL will need a chancellor of the exchequer to set interest rates. And the virtual world of Second Life already suffers from some of the same economic problems as the real world. Land prices shot up by 24 per cent in one month at the end of last year. In theory, this should not happen in a virtual world with an unlimited supply of land. In this case it occurred because of a temporary problem with the installation of new servers.
Some pundits think Second Life will wither away because it doesn't have the "stickiness" of established online games such as the amazingly successful World of Warcraft (8.5m paying members and counting), where players earn points for winning battles and bond into guilds, giving them an incentive to return. There is evidence from South Korea, which is years ahead of Europe digitally speaking, that virtual worlds lose their attraction after a time. But it is also possible that SL—or superior successors—will grow and grow, leading to a virtual revolution on a scale comparable to the agricultural and industrial revolutions. This is not as crazy as it sounds. Thousands of people already earn all or part of their living from SL. Rivers Run Red, a London company, employs two dozen people full time, building projects in SL for clients. Plenty of others are doing the same.
The killer applications
Second Life has three "killer applications." First, it has a micropayments system. If you set up an account with, say, PayPal and transfer some money to your SL account, you can then pay for very small items without incurring bank charges. For instance, when you upload a photo from your hard disk to SL, you get charged 2-3p. It is difficult to overstate the importance of having an efficient system for small payments. If the web had arrived with such a built-in micropayments system, it would be a very different animal today. There would not, for instance, have been such resistance to paying for music downloads, because a culture of payment would have arisen, together with a mechanism to facilitate it.
Second, SL lets its residents keep the intellectual property rights to what they create. This sets it apart from most of the big games, from Everquest to World of Warcraft, whose corporate owners jealously protect the contents of the game as their legal property. The corporations haven't been able to prevent the emergence of a secondary market in places such as eBay, where weapons that give positional advantage to players are traded. But all that is unofficial. David Birch, a digital money expert, has calculated that Chinese "gold farmers"—who spend hours over computers in sweatshop conditions to mine "virtual gold" in games such as Warcraft, in order to sell it to cash-rich, time-poor western players wanting to effortlessly advance their positions in the game—earn up to ten times what they would if they worked down the (very dangerous) mines in real-world China.
In Second Life, though, there is no need for black or secondary markets, because you are the legal owner of land you buy and anything you produce. It is a real economy. That is why business is getting interested. That is why Toyota has deposited virtual copies of its new Scio xB vehicle in SL as marketing support for its real-life launch. That is why Dell opened an island in SL where visitors can customise computers that will be delivered to their real-life addresses. That is why Penguin had an SL promotion for Snow Crash, a science-fiction novel by Neal Stephenson whose concept of a meta-universe was an inspiration for Second Life founder Philip Rosedale.
The third killer application is that Linden has just opened its source code to anyone who wants to play with it. This means that any software developer can work with Linden Lab to invent new applications or refinements for Second Life, opening up all sorts of new directions.
These three features together constitute an unprecedented creative opportunity. If you want a house of your dreams, build it in SL and present it to an architect for finishing off. Doubtless someone will come up with a computer-aided design program that will enable the house to be checked for safety and engineering strengths so it can be built in real life. Computer games created in SL have already been marketed in the real world.
Second life vs "first life"
The most common criticism of virtual spaces such as SL is that they are an escape from reality and could turn us all into screen-tapping zombies. Yet it is easy to invert the paradigm and argue that much of what happens in SL is more "real" than what would be done with the same time in ordinary life. Why should building a house with collaborators in SL be thought of as unreal while sitting in front of a television watching Big Brother without talking to anyone is normal? People in offices spend most of their day sitting in front of screens, and that is considered fine—but if they do it at night for pleasure, in a far more interactive way, they are thought of as weird.
In the normal world, if you kept stopping to talk to strangers in the street, you might end up with an Asbo. In SL it is normal to say "hi" to passers-by, who can either accept the opportunity to talk—via typing on their keyboard—or move on. If you start chatting to someone in an SL art gallery or museum, you will almost certainly find a common interest, so virtual friendships can easily be made. And unlike in real life, no one has to reveal their identity or background, unless they want to. (Second Life residents are typically in their early 30s, and over 40 per cent are women—although counting gets a bit complicated as nearly 20 per cent of men have a female avatar.)
Corporations such as Cisco and IBM are already finding that a virtual meeting room where executives (represented by their avatars) from around the world can gather is a surprisingly effective way to reach decisions—and it doesn't contribute to global warming. I was recently invited to sit in at a meeting of international scientists in SL, and was surprised to see how effective it was. Because participants had to type their contributions as text, they were forced to be concise. The entire dialogue appeared in a box on screen, so participants could easily check what was said earlier, and when the meeting finished, everyone had a complete record.
Second Life is no utopia. All human life is there. The libertarian ethos of the place is being tested by the activities of groups such as the self-styled Second Life Liberation Army, which detonated (virtual) atomic bombs outside stores run by American Apparel and Reebok in protest against a claimed colonisation of SL by big corporations. I can smile when a knight on horseback rides into my gallery, but I am a bit worried about the guy in quasi-military uniform who occasionally walks past my front door brandishing a machine gun. It is not that he (she?) can do me any physical harm—it is the mysterious motivation of the real person behind the avatar.
When I accidentally extended a wall into a neighbour's property, we settled it amicably, but people get just as agitated about their property rights and who is moving in next door in Second Life as in their normal lives. One avatar, Prokofy Neva, who bought a nice home by the sea, claimed his view was ruined when someone built a giant refrigerator blocking his view. In the area I live in, no one has thought about building a road. Such civic co-operation doesn't appear to be on anyone's agenda (though there are plenty of roads in purpose-built communities, like shopping malls or corporate developments, and reported plans to build a railway right across SL). The result is a bit like the wild west, with houses, bars, galleries and shops springing up everywhere. A lot of residents put an electronic lock on their properties, which sometimes makes going for a simple exploratory walk impossible. Fortunately, in SL you can also fly (though not over protected properties), or teleport yourself instantly to anywhere you want to go.
Unsurprisingly, the most popular places in SL are associated with sex and gambling. Whether this brings with it a gangster culture—with illicit casinos or protection rackets—remains to be seen, but it would be unusual if it didn't. If you wander about SL, you only occasionally bump into another person, since the 30,000 or so who may be online at one moment are spread across a vast terrain. But the sex areas often reach the maximum number of avatars that can be accommodated on a single server, and have to put up "house full" notices. These red-light areas mostly reflect real life, with lap dancing, virtual massages and simulated sex between avatars in luxurious, but cheap, hotel rooms.
There is a lively debate about how big SL really is. Clay Shirky, an academic who blogs at Valleywag, reckons that a majority of the 5m or so registered users—maybe as many as five out of six—have tried it and then bailed out within a month, leaving behind redundant avatars still counted in the statistics. But this doesn't mean SL doesn't have a future. Most social websites have far more registered users than active ones. SL is bound to have a bigger dropout rate than average, because it demands a lot of time to learn how to do basic things, and needs a computer with a decent graphics chip to provide a realistic experience.
It is also Second Life's fortune—or misfortune—to have been noticed much earlier in its lifetime than other social sites like MySpace and Bebo, which attract younger people and so stay under the radar (of adults) until they have built up a multimillion membership. But SL was a seriously innovative site, and so was discussed in the blogosphere even when it was tiny. When Business Week did a cover story in May 2006, SL had only 170,000 residents. The avatar featured on that cover was Anshe Chung, whose creator Ailin Graef has since gone on to become SL's first dollar millionaire through land speculation and development. But that story mainly made waves in the business community. It was BBC Radio 1's innovative move later that month to stage a concert with acts like Pink, Muse and Snow Patrol on an island in Second Life (replicating a concert that was actually taking place in Dundee) that really put SL on the map, reportedly triggering a threefold increase in membership.
The future of virtual worlds
What about the future? I would guess that virtual worlds will become much more important as computers get stronger and the user experience easier. They may even evolve their own systems of government and tax collection. (There have already been moves by the US congress to tax SL income, although they were soon dropped.) The key player may be Second Life, or may be one of its rivals (such as There or Kaneva), or even a brand new one with a stronger physics engine—able, for instance, to mimic the seasons by allowing plants to grow organically. Still, SL has established first mover advantage.
Second Life is very much a consumer experience at the moment, with people spending money on clothes, furniture and land. A few corporations are selling virtual goods, such as shoes or cars, and some real goods, but at this stage such activities are generally regarded as no more than a foot in the door, in case virtual worlds really take off. SL has possibilities for social networking operations such as MySpace, Facebook or Bebo, where a three-dimensional space to meet friends or go out together has obvious attractions. The potential for education is huge. Dozens of universities have already established a Second Life presence, as have research institutions and bodies such as Britain's National Physical Laboratory, which is involved in projects to promote nanotechnology and an earth observation satellite. Linden Lab's own in-house tutorials reveal the potential for distance learning that could open up new avenues for the likes of the Open University. If these potential sources of growth, leisure, education and commerce take off together, then the distinction between virtual and real worlds will become hazy to the point of disappearance.
