Riches in your Second Life

From fashion to ‘Bollywood’, paintings to entertainment and IT, more companies are discovering money in Second Life. Dean Williams talks to denizens of the other ‘reality’ about the future of a company in the virtual world

This is the future,” says Siddharth Banerjee, CEO and founder of Mumbai-based Indusgeeks, referring to the rise and rise of the virtual world Second Life (SL). And it is a future that multinational companies across the globe are increasingly paying heed to.

Indusgeeks is a technology development company that specialises in Second Life, and along with the likes of IBM, Sony BMG, Dell, Sun, Toyota, Nissan, Starwood and Reuters they are envisioning the ‘virtual’ eclipsing the ‘real’ in the future.

“Virtual worlds are quickly becoming a powerful tool and a driving force to what many are calling the 3D internet — one that is open, immersive, innovative, and social,” says Harriet Ip, IBM’s media relations manager, Asia Pacific.

Earlier this year, Indusgeeks took a part of India to SL when they opened their India-themed community — the only one of its kind — called ‘Bollywood’ in the virtual world. The community, however, according to Banerjee, has got little to do with India’s film industry.

“The reason I chose that name is because of its global appeal,” says Banerjee. “No matter which country you’re from, there’s a good chance you’ve heard of Bollywood. And that’s why a large number of our visitors (other than Indian) are European and Chinese.”

And Indusgeeks is not stopping there. On October 13, Indusgeeks will launch their very own fashion brand EthniCity on Second Life. Part of the proceeds from sales of the line will be donated to Child Relief and You (CRY).

There’s no doubting that SL is steadily gaining popularity in the corporate world. Ip says that as of August this year “more than 6,000 IBMers [sic] were active in Second Life”, up from 800 in December, 2006.

“IBM employees are extremely enthusiastic about the possibilities of virtual worlds. Thousands of IBMers have their own avatars and participate in these virtual worlds communities,” she said.

Rishi Seth, managing director, India, of PR company Text 100 said that his company has 100 avatars in SL from around the world, and “we have learned a lot about the business value of virtual worlds, as well as about the logistics of operating within one. We have experienced first hand how it can be useful for education, collaboration, spurring innovation and for marketing.

“About 20 per cent of the consultants in Text 100 have SL avatars, and/or are actively involved in broader peer media initiatives.” So is SL set to be the place where riches are made and dreams are realised?

In this case Banerjee advises a cautious approach: “Real world business mechanics don’t work on Second Life, simply because time is accelerated. The amount of progress you can make in one month on, say construction, in Second Life would be equal to two years in the real world. You have to be dedicated to SL to make money in it or you have to have people whose business is SL do it for you.”

Buying an island on SL costs $1,695 ( about Rs74,000) after which you pay a monthly maintenance fee of $295 (12,500). Once you buy the island you can then break it into plots and sell each plot separately or open a business on your land selling anything from paintings to clothes.

“Sometimes it makes more sense to rent rather than buy,” says Banerjee talking about those who simply want to set up shop in SL.

Although Linden dollars cannot be directly converted to Rupees (you have to convert them to US dollars first) there is a chance of that becoming a possibility as SL steadily grows. In fact, the US and the UK are already looking at laws that will allow their governments to tax earnings made in SL.

“The world is changing. Now you could have a hundred rupees in your bank account and still buy a car. How? Because you have lakhs in Linden Dollars in SL,” says Banerjee. “The first thing is to recognise that SL is not a game,” says Seth, “having now held a series of Text 100 internal meetings in Second Life, we have experienced first hand that the quality of interactions in virtual 3D worlds is engaging in a unique way.”

But explaining the physics of Second Life  to a layman can still be a daunting task as Banerjee attests. “We tell people we’re a virtual company dealing in Second Life, and they ask ‘cartoon banata hai?’ and when we see no they say ‘game banata hai’ eventually they ask us if we’re into internet pornography,” laughs Banerjee who is keen on showing the world that the internet and virtual worlds are more than just mires of smut and vapid entertainment.

According to Banerjee, explaining Second Life to people is even more difficult, especially when it comes down to the business of the virtual world.

“The only way to do it is to compare SL to a new country,” says Banerjee. “At present the GDP of SL is $750 million, and that’s a fact. SL is growing at a rate 10 times that of India or China. Now just imagine the opportunity to make money in this country in sectors like manpower and real estate. That’s where we come in with our turnkey operation. If you want to set up shop in SL, then we provide the space as well as the design and innovation.”

Of course, Banerjee admits that explaining to a businessman in his sixth decade that his Rs10 lakh was spent buying land that only exists on a server somewhere in California can be a bit tricky.

Ip is bullish about the future of SL and other virtual worlds, even though they still remain in the domain of those that are tech-savvy. “In the fourth quarter of 2006,” she said, “IBM established a business unit to focus on developing business opportunities within 3D environments.

Through our virtual ‘Business Center’, we are gaining really valuable experience and insights, which we will leverage to develop new models of client interaction that will ultimately make it easier for our clients to engage with IBM.  This is a leadership role that we are eager to embrace.”

Seth is of the opinion that virtual worlds like Second Life present the next generation of peer-to-peer platforms. “They create a rapidly growing new public that we need to address as a public relations consultancy,” he says. “Of course,” says Seth, “over and above all this, the cool factor hasn’t gone unnoticed either.”

And therein lies the key to the success of SL and other virtual worlds...to couple the chic edginess of virtual reality with the brutal business sense of the real world.