Second Life model can not be copied; there is still hope for virtual world in China

Anshe Chung’s Halo and the Second Life’s brilliance can not be copied completely in China. Having experienced blundering imitation, the 3D virtual world in China needs to reconsider the reality of China as well as the issue of landing in China. Re-examining the development of SL, we can divide it into two semi-stages, which reflect the quiet changes of the SL business model.

The first stage: For individual users. At this stage, Anshe Chung is a typical representative of the SL. Anshe Chung gives the closest and distant goal for those Internet users who dream of getting wealth in the virtual world as if that all of us can create a myth of wealth in 3D virtual world.

Anshe Chung really brought enormous users for SL, but no one can go beyond the Anshe Chung. In tens of millions of users among SL, The number of independent users who can really achieve “Balance of Payments is surplus” is no more than 66,000. The number of active users is in stagnation.

Linden Lab may have already foreseen this problem, so when in grand and spectacular scale Anshe Chung myth, it has not been intoxicated by the myth, it is quietly developing institutional users.

This is the beginning of the second phase of it. A considerable number of the world 500 enterprises such as IMB, Intel, Microsoft and so on settled down in China. Even some government agencies also set up its virtual embassies, such as the Maldives, Sweden and Estonia. U.S. presidential election campaign is also camped in SL.

However, in the process of developing institutional users, the phenomenon of withdrawal began to appear in the institutional users in SL. For example, Starwood Hotels Group, Reuters and so on announced withdrawal from the SL because the hits can not bring real growth in the actual business. In such background, SL institutional users strategy was fine-tuned , this is what we called at the beginning – semi-stage one.

In this semi-stage, SL focused on a more pragmatic development to really bring values to the actual businesses of the agencies, such as online education, virtual training. A number of universities in SL set up virtual classrooms, in which IBM held the virtual meetings, in which Britain and the United States military conducted joint military exercises and so on.

From SL development process, we can see the changes from individual users to institutional users, from the retreat to the practical, from the popularity development to a pragmatic number of active users.

At present, China’s several 3D virtual worlds, either imitate SL (actually mimic the first stage of SL), or make a virtual world of games or community. China’s Internet has indeed very obvious entertainment feature, but the demand for entertainment has been seized by games, web video, online music, what can virtual world use to grab users?

The current community-based applications have extremely low threshold, virtual worlds have to use a high threshold to seize the low-threshold application users and it is difficult to provide a better user experiences. How do you convince customers to buy yours?

CNNIC analysts: SL’s several changes worth study by domestic carriers of the virtual world. Under the present conditions in China, it is not possible to realize free convertibility between RMB and virtual currency as the Linden currency to US dollars do, therefore the possibility of developing economies in Chinese virtual world is nearly zero.

What China’s 3D virtual world operators should really learn from SL is their second semi-stage work. The virtual experiences will be combined with the practical application and entities, such as cooperation with the Radio and Television University Virtual instruction; training institutions for the entity to conduct the development of virtual training; cooperation with on-line virtual mall showings, Virtual Dressing, virtual test drive and so on.

Finding and focusing on their target market, we believe the 3D virtual world will be much more successful in China.

Chen,Jiangong, Senior analyst, Internet Development Research department, CNNIC

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