Second Life: failure or just a game?

This article, is the first of a collaboration between YourStory and Startupover, an Italian blog speaking about failure. You can know more about them visiting their website or following Andrea Dusi on Twitter (@andreadusi_vr)

Today, I was reading an article about Second Life, which said that it didn’t fail at all: it is very much operational and the founder is still making money out of it.

Is that true?

Let’s take a step back. Second Life is a 3d virtual world where people can create avatar and interact with other avatar exactly as they do it in reality.

The idea was born from the intuition of founder, Philip Rosedal, a physicist. It was 2003 and Second Life Viewer gave the possibility to the users to create a virtual character interacting with others through different activities: socialising, exploring the virtual world, meeting other avatars and managing another life inside Second Life, almost as in the reality. Users could get married, realise projects, buy fields, build new houses, travel in time and much more.

Residents could customise their avatars and their entire world. One of the most important characteristics was giving royalties on the items created to the users, that can be sold and exchanged between residents through virtual coins (Linden Dollar) that could be exchanged in real money (USD or Euro) creating a monetary economy. Between 2003 and 2008, the world was speaking about Second Life and companies were trying and investing to be a part of Second Life.

In 2007, Businessweek put Second Life on its cover. American Apparel, Dell, Reebok and thousands of other companies were creating their virtual shops, but by the end of 2007 Second Life's saw a steep decline.

Why?

In my opinion there are three main reasons - 

1. Incapability to cope up with high tech standards. They added some new features but that didn't help much. The speed at which internet was growing was tremendous. Thousands of other social websites were coming up and they were much faster. It made Second Life obsolete in a very short period of time, in months not even years.
2. May be, it was just a game. If we look deeply, Second Life is a Massively Multiplayer Online Game (MMOG) like many others. But the incredible buzz that was created and the high expectations associated with it were not met. On top of that, there was a huge bubble of marketing speculations and big companies were investing but at the end of the day it was just a bubble. This is something which has also happened in many other cases. Raising extremely high expectations can have a boomerang effect as it happened for Pleo and Segway.In 2007, out of 9 million registered users on Second Life, just 3,00,000 were active.
3. Facebook met users' need of socialising much better than Second Life. And they could not adapt themselves to the situation's need of being more than just a game.

It was a simple game whose expectations were pushed a lot by media. But it saw itself as just a game and nothing more. And that's why they failed.

Takeaways for entrepreneurs

1. If you don't adapt, you die.
2. Promise less, deliver more. Not the other way round.
3. Be open to pivot from the idea if and when the time demands.