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Wonders of the metaverse

In this survey


Apr 20th 2006
From The Economist print edition


A fantasy world where people make their own films

“LET'S build a really cool swing and see if we can get somebody to sit on it,” says Philip Rosedale. A few clicks later, there is the swing, and quite an artful one. Onlookers have gathered to watch. One, named “mermaid”, declines to sit on the swing, but another, called “ninja”, hops on and rides for a bit. Then a dragon comes along that is so beautifully crafted that everybody stares.

Technically, all this is happening not in real life but in Second Life, a “metaverse” (for “metaphysical universe”) created by Linden Lab, a San Francisco internet company. Mr Rosedale, its founder, says that Second Life is “not a video game but a place where people make things.” This is hard to imagine until one sees it, but then instantly addictive. People who log on to Second Life create an “avatar” (ie, an online extension of themselves). As avatars, they mingle, go to parties, create what they wear and drive in, build the houses where they live, paint pictures and compose music.

Second Life is not as separate from real life as one might expect. Larry Lessig, a real-world author, recently gave a book talk in Second Life, and lots of avatars showed up. People own copyright in real life for the things they create in Second Life. Avatars trade their creations in “Linden dollars”, convertible into hard dollars on Linden's currency exchange, which has a monthly trading volume of $4m. One user, Anshe Chung, pays Linden Lab the equivalent of about $200,000 a year to buy land in Second Life. Ms Chung turns a profit by developing this land into residential communities (such as “Hangzhou”, “Gotland”, “Emerald Island” and so on) and charging avatars rent. “It's the purest way of profiting from creativity,” says Mr Rosedale.

A lot of the things created in Second Life are exported into real life, as fashion, songs and so on. One user, Natha Keir (whose avatar is called Kermitt Quirk) created an online multiplayer game called Tringo, which is a bit like bingo but more fun. Tringo started as a game within the game but has now taken on a life of its own outside Second Life.

Other avatars have created cameras and are filming things that happen in Second Life. In effect, some avatars become actors for other avatars who become directors. These new directors then post their films to websites in real life (“real” having become a slippery concept by now). “You can be the next Coppola here,” says Mr Rosedale, as he watches one such film, in which a cowboy is just sauntering into a saloon and gun-slinging appears imminent. “Second Life reduces the cost of filming a movie to zero.”

Second Life opened in 2003 and is now inhabited by about 100,000 people from around the world (still a small number compared with the video-game giants). Unlike earlier generations of video games, which appealed mainly to narrow demographic groups, Second Life is popular with women as well as with men, and with middle-aged people as well as teenagers. If there is a trend, Mr Rosedale says, it is perhaps that Second Life does best in places with bad weather, fast broadband connections and unexciting entertainment options. He considers British suburbs an excellent growth market.

In time, metaverses could disrupt the economics of mainstream film-making. Philip Evans at Boston Consulting Group estimates that Linden Lab has so far invested about $25m into the Second Life environment. But as “about 90% of the content is created by the players”, calculates Mr Evans, this works out at a total “investment” of perhaps $250m, which brings Second Life up to the budgets of Hollywood blockbusters. “The production values are amazing,” says Mr Evans. This potential economic disruption to Hollywood, he thinks, “could be the harbinger of something very much bigger.”

Next article in the survey: The gazillion dollar question: So what is a media company?


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