While you were worrying about keeping your home, you may have missed the popping of the virtual-reality real estate bubble. In Second Life — Linden Lab’s immersive, 3D game that allows players to trade real dollars for virtual dollars — a nice stretch of mainland coastal property that would have fetched around $65 in 2007 today goes for $16.
That’s partly because the financial crisis crimped spending for the 1.38 million users, known as residents, who have logged into Second Life in the past 60 days. “The real real estate crisis had a direct effect on the real estate” in virtual worlds, says Guntram Graef, a business partner at Anshe Chung Studios, which sells “land” in Second Life. It’s also because the pell-mell growth of Second Life has slowed dramatically since four years ago, when BusinessWeek put Anshe Chung — the avatar for Ailin Graef, Guntram’s wife — on its cover.
The article suggested that Second Life and other virtual worlds might be “more intuitive portals into the vast resources of the entire Internet than today’s World Wide Web.” Companies from IBM to Wal-Mart to Wells Fargo experimented with virtual worlds for employee training, customer service, and marketing. Pierre Omidyar, eBay’s founder and chairman, was a Linden Lab backer via his investing group, Omidyar Network. He was quoted as saying: “This generation that grew up on video games is blurring the lines between games and real life.”
As it turned out, that generation would soon be spending far more time updating Facebook pages than outfitting avatars. Growth has slowed at Second Life. More than 10,000 IBM employees still attend meetings in Second Life, but some companies have dropped out or given up on wooing consumers through virtual worlds. On June 24, Linden Lab Chief Executive Officer Mark Kingdon stepped down and was replaced…