Yet another turn of the year blog post

Introduction - Second Life misrepresented - hurdles jumped and obstacles overcome - wildly inaccurate predictions - we few, we lucky few - holiday cheer.

It's customary to commemorate the switching-of-arbitrary-number-thing with highlights of the year n and predictions for the year n+1. Well, far be it from me to separate from the herd, so here we go!

Baaaaa!

As 90% of the other blogs are filled with complex technical analysis of the year behind us, I'll take another route and try to evaluate the year from a more personal perspective. For me, 2007 was the year when I shed my online 3D environment prejudices and embraced virtual worlds wholeheartedly.

Embracing the virtual world

Why was I skeptical? For one, I hate online multiplayer games. The hassle of having to play the game and deal with complex relationships at the same time never attracted me. When I first heard of virtual worlds through the mainstream media, this was the impression I got. Of course, having read Snow crash (and loving it) years ago, I was patiently waiting for the Metaverse. I just didn't think we were there yet - and none of the media reports made it seem so.

The books that started it all

The second reason was the name. "Second Life". Admit it: the name is too good! As I have been quite happy with my first life, the idea of a replacement life in a cloud of pixels was off putting. I understand why an immersionist would be immediately attracted to the name, but for myself, "Additional Life" or "Life Enhancement" would be more appropriate and alluring.

All this combined to make it hard for me to jump the hurdle; but, fortunately, with the assistance of someone who used to jump hurdles in competitions, I finally managed it. I came, I saw, I spent Lindens, I crashed, I loved it!

So, now that I am here, what are my Second Life predictions for 2008?

1. User retention will stay the same

Second Life's 10% user retention is not due to system crashes or user interface. It's due to inherent complexity of the virtual environment and communication. A large group of people can't find the Post Office based on simple instructions and can't write a coherent email to save their lives. Do you really expect them to successfully navigate and communicate in virtual worlds?

2. Prices of virtual goods will fall

The virtual nature of SL merchandise means that there are no costs associated with production of items. Once the development/building costs are recouped and the competition is closing, it's very easy for the creators to start lowering price and continue to do so until the price reaches zero. This is the reason for Anshe's much-maligned 10 L$ goods. She's not evil; she just understands the virtual economy. The sooner SL creators understand the laws of the virtual world, the better. The solution is not to band together or hurl penises, but to keep creating; the time of resting on laurels is even shorter in virtual world than in the flat world.

Idea: instead of having fixed prices for goods, why not implement an algorithm that would automatically lower costs towards a preset minimum based on aggregate demand? Every store (or every creator) could have a sales bot that would connect to an external database and dynamically adjust prices.

3. L$ will detach from the US dollar

This one is a bit out on a limb. It greatly depends on the state of US economy during the 2008 and perceived main market for Linden Lab, as the possible attachment to the Euro would mean rising costs of Second Life for the American customers. However, if the US economy tanks, but the European and Asian don't, it would make sense to shift primary focus to more healthy markets and to guarantee an influx of a more stable currency.

4. There will be no big virtual worlds revolution.

Another risky prediction. I think that improvements of software alone cannot be revolutionary enough to turn the large part of society to virtual worlds (see prediction 1). The revolution, when it comes, will be based on hardware breakthroughs. Bring on the cyber jacks!

5. The hype will become and remain mostly negative

The people at Gartner are known for some weird predictions, but I think they're on the money with the hype curve. It's important to understand that the hype curve describes the behavior of mainstream media and says nothing about technologies as such.

What does that mean for virtual worlds? Well, from a personal standpoint - I remember the Eternal September and have seen it arrive in a variety of media, so I say Hooray! I understand the need for Linden Lab and virtual merchants to expand the user base as much as possible, but I for one will be glad to meet fewer, but more interesting people.

From a global Second life standpoint, the year 2008 will be a year of proving ourself and our virtual world against expectations. The grid will crash; the media will glee in describing our alternative lifestyles to the close-minded masses; money influxes from big companies entering SL will drop; and respected SL businesses will close. But, despite (or even because) of all this, we will not only prevail, but become stronger - with better communities, better content, and more knowledge and skills. When the hype cycle turns and the shift into virtual worlds begins for real, we will be there and ready to lead the transformation.

Wearing fancy avatars with wings or cute furry ones, of course!