Interview: Still Farther to Go Down the Trough of Disillusionment

2007 brought both a wave of adulation and a pummeling backlash from the media to virtual worlds. In other words, we rode out parts two and three of the Gartner Hype Cycle. Used to model adoption and application of new technologies, the Gartner Hype Cycle predicts five basic steps: The Technology Trigger, Peak of Inflated Expectations,  Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity. The middle and end of 2007 was almost certainly the Trough, but with more praise (and adoption) coming in for kids' worlds, some spectators are looking forward to the upwards Slope. "I think we're being a little optimistic there," counters Gartner Research VP Steve Prentice.

Prentice cautions that the Hype Cycle isn't a perfect fit for virtual worlds, though. It doesn't publish an official Hype Cycle for virtual worlds because the cycle is really meant to plot the paths of technologies.

"It's kind of questionable whether virtual worlds are a technology or a collection of applications," Prentice explained. "Having said that, it's one of our high-profile tools. It's a reflection of the media interest. It's really reflecting how people react to things more than being some truth to the way the world works based on the laws of physics."

As much of the media focus (both positive and negative) has been on Second Life, some commentators worry that the  world views Second Life as representative of the entire virtual worlds industry. And with more consumer success coming from fantasy worlds like World of Warcraft or youth-oriented worlds like Webkinz or Habbo Hotel, that makes it hard to track the space as a whole.

"If there's one challenge, it is increasingly difficult and dangerous to cover a segment of the market without being aware of what is happening in other areas," said Prentice. "You can focus in one area, but you have to be increasingly aware of the other segments because it's changing people's attitudes. The success, growth, or decline of virtual worlds I'm convinced is based on people's attitudes."

However, the adult market is still getting most of the mainstream focus, and it's not helping.

"If you take the traditional adult market--by age not content, open virtual worlds like Second Life--my feeling is that as a collected concept, it is probably pretty much still heading down into the Trough of Disillusionment," Prentice explained. "I think there is farther to go."

In other markets, only the gaming worlds are really  at a mainstream point. Prentice puts them at close to the Plateau of Productivity. There are established business models for developers and expectations from consumers. So there's not much risk in creating a game world now, but there's also significantly less competitive advantage. The biggest risk is competing with World of Warcraft's status as an early adopter of the platform that took off.

The rest of the virtual world industry, though, has farther to go.

"If we look at the teen worlds, they're on the upslope still, and the [corporate] intraverses probably are in the early stages of those," said Prentice. "I don't think any of the virtual worlds have really gotten through the Trough and come out the other side. People's attitudes vary depending on what their users are, though.  The one thing that has become abundantly clear is that people want to have a good time, but people's descriptions of 'fun' are different. So I'd hesitate to say that the long-term users of Second Life  aren't having fun. Human nature says they must be or they would leave, but I think the problem is that what they find fun is not what the mainstream audience is looking for."

Putting a Good Foot Forward

Part of the explanation for Prentice is that the press loves a bad news story about as much as it loves a gee-whiz-over-hype story. A year ago, Second life could do no wrong. Now, however, it's been struggling with new rules, gambling and banking bans, and how to put forward a friendlier face to the media than its previous Lawless Wild West environment.

"In fairness that is the message that is coming to them from the long-term user base," said Prentice. "There are many users, I get the sense, that believe Linden is providing the infrastructure for their personal usage and enjoyment, which I think is being a little naive. You've got bad things starting to happen and people taking advantage of things."

He cites worlds like There.com, though, that have much stricter rules.  Likewise, the fantasy (or science fiction) worlds  provide structured environments with a much more limited ability to break the real world's laws--at least when limited just to in-world activity. Those worlds also, Prentice suggests, offer more fun to adults. So while they may be lightly lampooned in the media as a haven for geeks, they're not mystery worlds filled with sex-crazed maniacs and flying penises.

"It seems to me there are only two genres that actually work," said Prentice of the game-based worlds. "The science fiction side of things and the fantasy side of things. I put that down to the fact that if people are going to put considerable time into the alternate universe, human nature dictates that they're going to opt for something fun instead of something not fun. Why wouldn't you choose an environment that you can do things that you can't in the real world? The realistic worlds have struggled to find something to do that's fun. That's something that Second Life has struggled with users and the press. Youngsters brought up on gaming expect immediate gratification and fun, and Second Life in its raw form doesn't provide that."

The younger worlds have undeniably taken off. BuildABearville.com hit a million users within a month; BarbieGirls hit three million in two months; and Disney's acquisition of Club Penguin was one of the biggest stories of last year.

And Prentice suggests that at least part of the success is the addition of rules.

"It may seem a bit hackneyed, but kids seem to know how to have fun, and if it's not fun, they leave quickly. They're quite happy to be directed and not have all the freedoms," said Prentice. " Second Life offers an immense amount of freedom, but it might be too much for the younger audience. If you go down to the tween worlds then the limits to what kids can do is even greater, and, if anything, they're even stickier. They're hugely popular, addictive some might say, but there are very limited opportunities for user-generated content. Kids and parents want a more controlled environment where they can use their imagination to play and not try to re-create everything in the virtual world."

Going to Work

Prentice is more optimistic about the future of virtual worlds, which he describes as a problem of people, not physics. It's worth remembering that he made the oft-cited prediction that 2011 will see 80% of Internet users involved in virtual worlds.  And, after all, the little people currently flocking to Habbo Hotel or Club Penguin will eventually be the big people making decisions about collaborative environments and network interfaces. There's also World of Warcraft to keep in mind.

"If you look at it from an enterprise standpoint, the group dynamics of World of Warcraft are increasingly being identified as useful," said Prentice. "That's creating a user base of young professionals who are used to working in this environment, and older management, which historically would have disregarded them as games, is more open. You're setting up avatar-based collaboration as something that young professionals see as completely normal. It's the 3D version of MySpace or Facebook. Instead of using Lotus Notes or the traditional collaboration environments, they're quite happy to use the virtual world to carry out meetings without it seeming strange. Not only are they likely to suggest it, but those suggestions are less likely to be met with the blanket refusals that they would have been in the past."

As you look to even younger generations, the interplay is even more apparent. Prentice predicts that one of the next big waves of innovation will bring a 3D social networking site that moves beyond the current plug-ins for  Facebook and Bebo. Those haven't drawn much attention yet because people aren't ready, but that's mostly a matter of time. In turn, that will lead to 3D navigation for more information tools. Prentice doesn't find the term "3D Internet" very apt, but he thinks the spatial navigation is intuitive, but still too new.

Likewise, while commerce hasn't taken off yet in virtual worlds, Prentice sees potential, at least at some point.

"For at least the next couple of years, the idea of people doing a great deal of commerce in virtual worlds seems fairly dubious," he said. "At most it seems like the enterprise's early entrance into Second Life seems to have largely fallen by the wayside. It's not exactly been a raving success. To call it a failure is a mistake, because that depends on what the objectives were. My feeling is that companies that plunged in early weren't exactly sure what their objectives were. But I don't think users are really ready to start doing commerce in virtual worlds. The business models that seem to work are associated with virtual worlds—buying Webkinz or buying virtual goods at a pocket money level—but as soon as you get up to the older audience, they seem to be thinking more about creating instead of buying and selling."

Instead, one of the main sources of work and entertainment in adult worlds seems to be entertainment from the real world. While the success of the CSI in SL project is debatable, sees it as an interesting experiment on par with News Corp's acquisition of MySpace. The reasoning wasn't clear at the time, but it gave the old media giant a firm footing online.

"Now no one would question that now," said Prentice. "Traditional media are exploring new media, and virtual worlds are a powerful element. If you look at what Viacom is doing with MTV or what Anthony Zuiker was doing with CSI, there is no doubt that traditional broadcast media is starting to eye up virtual worlds as an extension of television as something that is more immersive and stickier than traditional broadcast television where, frankly, they're struggling to maintain an audience."

What Next

Gartner still has that prediction for 2011 on the table, and with so many changes seeming to come from youth worlds, it's worthwhile to eyeball those trends. One of the most significant that Prentice points out is the volatility of user bases. Adult worlds tend to have high barriers of entry and exit, which has led for some users to  call for interoperability. Kids worlds don't have those issues. Instead, they migrate across platforms according to different identities, daily desires, and needs.

Prentice predicts more of the same. And that volatility will necessitate a change in the way businesses interact with virtual world users.

"The mistake that I see a lot of corporations making  is to confuse the platform with the community," he explained. "That's reasonable now, but the time is going to come in the not too distant future where there is an alternative to main platforms and the communities will have viable realistic alternatives that offer them environments closer to what they're looking for. Communities will be more important than platforms, and communities will simply use the platform that suits their needs. And those communities are viral."

For Steve Prentice's thoughts on the more immediate future, check out his responses in our 2008 Industry Forecast.

Comments

[Jon Himoff]

Actually what Second Life has done is to split the content from the platform also. This is why SL is helping drive toward the 3D Web and is not merely a game.

SL is visionary in that it allows people to build their own virtual space. Their tech stack is really amazing --> micro-payments, VoIP, new physics engine, windlight viewer and most importantly their open source viewer. SL allows developers to integrate web data as well further allowing the users to define their experiences.

So the Hype cycle is missing all of this and in some ways SL is more like a new kind of web browsing technology than a game.

[len]

Not SL particularly, but any real-time 3D space offers a singular compelling advantage for organizing and querying:

... proximity.

A 3D world can be to an object collection what the document model is to a form. Everything from free roaming (exploration-based learning) to guided tours (tutorial-based learning) is possible. The human brain dedicates enormous amounts of power to processing 3D objects in motion.

What SL is demonstrating is how user-driven services can be organized within a 3D server farm. This is not inconsequential. It simply isn't pioneering; it is commercializing the concept of service-oriented world design. Until more business-breaking applications emerge, the trough will be the local minima. I do expect to see something like that very soon. I think the serious games and infrastructure apps will get there first.