Brian McGuinness, vice-president of Virtual Aloft, one of the brands of Starwood Hotels & Resorts Worldwide, declared in 2007 that the virtual world created by Linden Lab was no longer a profitable place for advertising and business, and closed his on-line property. The three-dimensional buildings of the big brands, such as Sun Microsystem and Dell, would have been as empty as the Almeria desert in Sergio Leone's films, according to the Los Angeles Times.
Millions of Us, an enterprise specializing in immersive brand marketing, announced that they would have gone beyond Second Life, signing an agreement with Gaia Online, in the hope of being able to reach there a wider public.
Not that everybody agrees about the commercial death of Second Life; there are still enterprises and individuals competing in the virtual market; for instance, while many US managers were declaring the commercial failure of the virtual world, Italian institutions and football teams were announcing their entrance into the on-line world. Anyhow, the numbers are clear: Second Life is no longer able to provide a sufficiently large audience for the enterprises that buy a property there. Every moment, there would be no more than 40-50,000 users logged in. The main question is whether other online worlds with a larger audience will be able to do better.
One of the main peculiarities of marketing in virtual worlds is surely its interactive dimension. It does not leverage so much quantity, as this is surely better reachable through a classical bi-dimensional banner on a popular website or a virtual lounge, but on quality. Interaction tied to good images leads to better memorisation, awakens interest and shows that the company in question is in the vanguard. Of course, accessibility to the place of advertising is another central issue, and this might be for example one of the problems with a virtual world like Second Life. If you are not explicitly looking for it, it is less certain that you will randomly find a specific place in Second Life, since the virtual world has expanded in the previous years, with many locations available to visit and spend time in.
If on-line marketing does not produce the results it promised years ago, there are new forms of on-line business that seem to be proliferating, although not too legally. Among others, the production and sale of virtual goods, especially in on-line games. Particularly, the Southeast Asian market segment seems to see a growth of this phenomenon. According to the 3rd ASEAN Media Forum held in Singapore on 16-17 December 2011, South East Asian countries have experienced in the last few years a boom in the use of on-line communities and social networks. Journalist Julian Dibbel, in his book Play Money, affirms that at least 100,000 people in China work (illegally) in the new market of virtual production and trade. Faced with the extension of such a phenomenon, Blizzard, the society that created World of Warcraft (one of the world's most played online games, with 11 millions users), has launched a new game, Diablo III, announcing the possibility of converting on-line trading in real money, and so making, in this way, the business on his platform completely legal.
In 2010, it was estimated that 70% of the revenue of virtual goods trading came from South-East Asia, and consumers would have spent $7.3 billion worldwide on virtual products that have been generated in virtual worlds, games and networks. In-Stat, a market-research company for the new-tech sector, estimated that this amount will double by the end of 2014. According to recent surveys from In-Stat, the top 10 virtual goods companies earn 73% of current worldwide revenues.
Surely, on-line trading of virtual goods is not necessarily illegal; in 2010, Jon Jacobs, US actor and film-maker, succeeded in selling his virtual spatial station for $635.000.
Considering alternative forms of profit and marketing, Facebook announced in 2011 a reward of one credit - equivalent to 10 cents - for each of certain advertising videos that users will watch to the end. The ads are placed mainly inside virtual games on Facebook and the credits can also be used to buy real-world goods. The gain does not seem to be really high, but still, this step opens up the door to a new frontier of (on-line) advertising and marketing strategies.
Even if the virtual reality of the virtual worlds has turned into a bitter reality for some businesses, there is another reality which seems to offer great possibilities to new investors and technology enterprises. Augmented reality is probably the new promised land of digital technologies. Lester Madden, marketing agent for several technology companies, such as Microsoft, Nokia and Skype, states that, while in Japan and South East Asia Quick Response codes are in common use, in the USA and Europe, they are still not being as fully exploited as they could be. It is true that, in recent times, Great Britain has seen a flourishing of Quick Response codes throughout its cities, but many of the possibilities of these applications remains unexplored.
Augmented reality is defined as an augmentation of the material reality, a mix between the virtual and material, with a preponderance of the latter on the former, differently from virtual reality which involves a predominance of the virtual over the material.
In the praxis, virtual elements such as texts, lines, virtual objects overlapped to images or videos from the material world, or projected in the material world itself, are considered examples of augmented reality.
Here are some field of applications for AR technologies, that hold potential for future expansion:
Video-games, including learning games for school usage
Graphics and visual representations for enterprises;
Architecture and landscape planning;
Tracking down and identifying objects, including the flourishing field of Quick Response codes. They can be used to display information on a place, object, book, or CD and to insert additional promotional material;
Markers, which enable the projection of virtual elements in the material world;
Microsoft Tags, that can be inserted even in business cards and lead the user to a website that is visible on a mobile phone;
Face recognition devices, usable among other things, for marketing purposes, for example to display appropriate ads based on the age and gender of the viewer;
Diminishing reality, at present used mostly by the police in order to isolate persons or objects in video sequences, but suitable for future developments in the field of photography, for instance;
Real-time translations of signs;
Production of hardware, such as glasses, although this latter field is still widely underdeveloped;
Devices for enhancing the cinema or television experience, adding physical sensations to the vision.
Although the cyberspace remains a risky field and may lead to deception of those who venture into business in its endless land, it is nevertheless undisputed that the virtual dimension will represent, in a way or the other, a promising investment ground for the future.