Third life

Building on the runaway success of the virtual world, Second Life, Chinese companies are now hoping to build virtual "third lives" with Chinese characteristics.

"Although our idea is to create a Chinese virtual world comes from Second Life, we do not intend to fully copy its model," says Eric Ye, CEO and founder of UOneNet, which runs the Chinese virtual world Uworld.

"What we want to do is to create a Chinese virtual world that best fits the needs of users in the country."

Wendy Chen, general manager of IBM.com in China, presents her avatar in Second Life.

A virtual world is an Internet-based 3D Internet environment where people interact through alter-ego images called avatars.

Second Life, which was launched in 2003 by its developer Linden Research, Inc (commonly referred to as Linden Lab) and inspired by is, according to its website, "a 3D virtual world entirely built and owned by its residents" and a "vast digital continent, teeming with people, entertainment, experiences and opportunity".

New members are invited to create an avatar, tailored their imagination. They then guide that avatar through three-dimensional landscapes in which they can chat - via a keyboard and speech-bubbles - to other avatars, purchase virtual land, goods and services and teleport themselves anywhere they want to go. The result, according to one "travel guide" to Second Life, is "a world of endless reinvention where you can change your shape, your sex, even your species as easily as you might slip into a pair of shoes back home."

"I think virtual worlds in China will see an explosive growth in the next two years if the industry environment is favorable," says Ye.

Established in 2006 with investments by overseas venture capital firms, UOneNet in January formed a partnership with IBM in which the blue giant will open an IBM China area within its Uworld. The company is also in talks with many other companies in China and will formally launch its Uworld later this year.

The rise of virtual world

Although Second Life was launched in 2003, it did not garner mainstream attention until late 2006 and early 2007 with widespread media reports about Ailin Graef, whose main avatar, Anshe Chung became the first millionaire in Second Life with her wide-spread virtual real estate empire. She exchanged her Second Life currency, "Linden Dollars", for real money and stories about "the Rockefeller of Second Life" were featured in a number of prominent magazines including Business Week, Red Herring and Fortune.

Since then, the virtual world has become a fashionable place in which companies, news agencies or even government organizations are flocking to make their presence known.

According to a report from the research firm Gartner last year, 80 percent of active Internet users and Fortune 500 enterprises are predicted to have a presence in the virtual world by the end of 2011.

"In a 3D virtual world, people could seek information the same way as they did in the 2D Internet. But many businesses in the existing 2D Internet could be expanded in the 3D environment and may receive a better experience," says James Ye, CTO of IBM Greater China.

Ye says about 5,000 IBM employees around the world have avatars in different virtual worlds and the company has been partnering with many of its customers to discuss how IBM could help them expand business in the virtual world.

At the same time that Second Life has gained a success in the United States and Europe, there is more evidence that the Chinese virtual worlds are gaining momentum.

During the past four months, Intel, Hewlett-Packard, Procter & Gamble and IBM have all announced plans to establish their virtual presences in Chinese virtual worlds including Hipihi, Novoking and Uworld, although none of them has yet to make a formal launching.

"My expectation is that many multinationals will be interested in Chinese virtual worlds because they are unlikely to suffer from the lack of governance which has caused many enterprises to scale down their interest in Second Life (or leave entirely) and focus on internally hosted virtual worlds for collaboration purposes," says Steve Prentice, analyst and vice-president of Gartner.

Remaking a second life

For Ye from UoneNet, the only way to build up a successful virtual world in China is to go beyond Second Life, where Ye found that many Chinese users often wandered around and didn't know what to do.

"I think Second Life is more like a utopia and I don't think the virtual residents should do whatever they want to do," says Ye. "It can be malicious to users in the long term and will hurt virtual world operators in the end."

In Second Life, the role that Linden Lab played is more like a God who created the land and sea and then leaves. Governance responsibilities are mostly taken by the virtual communities and sometimes the result in a lack of control and even reports of fraud, violence and sexual abuse.

"In our perspective, what has happened in Second Life is a little bit out of control," says Ye. "That will become a hurdle to the formation of a mature economy in the virtual world."

According to Ye, UOneNet plans add more in-game tutorials and content creation tools to help users to get started more easily in the virtual world. The company will also partially disable the transmit function in Uworld, Ye says, in order to end the value of virtual land and discourage consumption.

"Unlike Second Life, in the real world people cannot teleport themselves and that has created the need for transportation such cars, trains and planes," says Ye, noting that he will try to copy the existing business model to the virtual world and even hoping to create a virtual stock exchange as long as there is a needs.

"Virtual worlds are a bit like the World Wide Web in 1993 - nobody really understands which business models apply and how to effectively use it," says Prentice from Gartner. "The same is true of the virtual world's environments today - we still need to understand what works and what doesn't - but it will happen!"

(China Daily 04/07/2008 page6)