In the last few days I came to the conclusion that Second Life may prove not be profitable at all for Real Companies, at least looking at how their presence is structured now in the Metaverse.

There are several considerations worth doing on this.

The general assumption is that a Second Life project does not require a huge amount of money to be launched.

This may be true if you consider the mere presence in the Metaverse. Buying an island, put some buildings and objects on it, build a store may be really cheap to develop. After you have done this very first steps you will discover that:

• Any place in Second Life has to be kept alive. That means that someone from your company or from a third party company has to put people in the Metaverse to populate your Island. If buildings are cheap in Second Life, real people need to get paid with real money and that is definitely expensive.
• You plan to run events on your brand new island. Mostly every single event I have attended in Second Life had music and videos. If you plan to run this kind of events you will end up considering paying royalties fees to broadcast that music and videos. Again, real money.
• Your store is selling real life stuff. What about the costs of systems integration between the Metaverse and the real world IT systems?
• It seems that the only way to promote a place in SL is word of mouth. Nobody pays attention to advertising signs in Second Life (Yes, they are those extremely expensive 16m2 plots you see on sale in the Land Sale search tab). If you are going to use word of mouth that means avatars, and behind each single avatars there is a human being that need to be paid for that job. Probably not real money but it is always a cost.
• When you build you business plan for your SL store linked to your RL store how many customer do you think you may hit? Apart from the long story that among the 8 million users only a few are regulars users (customers) you will need to keep in mind that any single island may not hold more that 60/70 (probably less in high scripted environments) avatars at the same time. How many of these will buy your stuff? The only solution is to replicate your presence in several islands all around the Metaverse with an increase in development and maintenance costs.
• Opening a subsidiary of your company in Second Life is no more something that the press will run to talk about. Dozens of new company are now coming to SL and this is not new anymore. You will need to develop something different if you want some returns from the press. Developing something new and exciting will cost you more money (real money).

Why do I blog this? I think these are really big limitations that you will need to take in consideration if your company is planning to enter Second Life.

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