The LA Times has an interesting article up on the failure of real life businesses in Second Life.
The crux of the piece is that despite the hype, real life businesses are closing down their Second Life outposts due to little to no interest in them.
The reasons for the failures are open to debate; from firms not engaging Second Life citizens, through to simply a lack of actual people using Second Life (the LA Times says it peaks at 40,000 users at any one given time).
Wagner James Au at GigaOm has a set of figures worth looking at. In defending Second Life, Au notes that the visitor rate to corporate installations on Second Life is 0.8-2% vs a CTR rate on standard web advertisements on 0.5-1%. Great, but does a higher CTR really matter? The 5 most popular corporate destinations on Second Life have between 1200 to 10,000 visitors per week. An island on Second Life (a popular choice for corporations) costs $1,675 upfront then $295/ month, and that doesn’t include the cost to actually create structures on the island from one of the various Second Life design firms (cost: approx $5-10,000). So lets do the figures: the most popular corporate destination has 10,000 visitors per week; at $295/ mth in maintenance fees that’s a CPM rate of approx $7.40. The bottom destination of the top 5 has a CPM rate of approx $61. If we apportion the upfront costs of design (say $5,000 although it’s probably higher) and setup ($1675) over 12 months the CPM rates become $21.20 (top) and approx $180 (bottom of the top 5). The CTR rate is irrelevant: the CPM cost for businesses on Second Life is insane: simply even for the very best, the figures don’t add up.
Au’s later notes in the same post that Second Life doesn’t rely on corporations for revenue and the decline of corporations on Second Life doesn’t really matter all that much to Linden Lab. Once the last corporation leaves Second Life, the user-generated metavserse will continue, and in some ways may even end up being better off.