It's Not All Fun And Games

From Business Week Online-
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Virtual worlds abound in useful business applications

It's hard to imagine a less corporate setting than the often bizarre online virtual worlds such as Second Life. But to a surprising extent, mainstream businesses are already dipping their toes into the virtual water. They find it's not only a cheaper but also often a better way to perform a wide variety of corporate tasks.

For one, as any flight simulator fan knows, an imaginary world can make a boffo training ground. Tim Allen, head of technology at Crompco Corp., an underground gas tank testing firm, discovered that as the pseudonymous "FlipperPA Peregrine" inside Second Life. There, he built a virtual gas station, graphically showing all the tanks and gas lines under the asphalt. He says it's much easier to grasp the station's workings this way than it is on paper. "It's great for training new hires and showing changing regulations to existing employees," says Allen, who also runs the Web mall SLBoutique.

Companies are also starting to use virtual worlds as alternate offices in which colleagues and partners can meet and view materials that the Web isn't rich enough to display well. Justin Bovington, chief executive of the London marketing firm Rivers Run Red, for instance, uses Second Life as a virtual meeting place where ads, posters, and other designs can be viewed in 3D settings by clients and partners around the world in real time. That saves the weeks it would take to shuttle physical materials back and forth.

For Walt Disney Co.'s (DIS ) movie Hitchhiker's Guide to the Galaxy, Bovington's firm worked with the media agency Carat Group to develop a marketing campaign. Using Second Life to create 3D models of the android character Marvin for posters, CD-ROMs, and a Web site, they placed the character in various poses to see what designs worked best -- all in 20 minutes instead of the two weeks typically required to build physical models. Overall, Rivers Run Red saved up to $175,000 last year using Second Life to eliminate expensive modeling services and travel.

Other businesses have begun to use virtual worlds as marketing tools to reach young people who prefer logging on to games to switching on the TV. Bovington is working with media companies, a distillery that wants to set up a dance club inside Second Life, and the British fashion designer Mrs Jones, which offers virtual versions of its real-world apparel designs. "They're all interested in creating their own branded Second Lifes," says Bovington, whose avatar goes by the name "Fizik Baskerville." "Allowing people to immerse themselves in your brand is the Holy Grail."

Some big brands are already well along in the quest, creating their own independent virtual worlds for customers. Coca-Cola's (KO ) MyCoke.com envelops fans in everything Coke with games, music, and chat in a virtual setting. Wells Fargo's (WFC ) Stagecoach Island is a virtual world where people can play games to learn about finance while hanging out with friends. Some have even held virtual birthday parties there. "It wasn't just about slapping our logo up in a competitive game," says Tim Collins, Wells's senior vice-president for experiential marketing. "We have to make it fun to reach young adults."

All this could prove risky. As companies provide real services inside virtual worlds, such as employment and investment opportunities, they could draw attention -- and regulation -- from real-world authorities like the courts and legislatures. And more than in any other medium, companies don't make the rules inside virtual worlds -- the participants do. Too much reality, especially the commercial kind, could scare away the very people that companies are trying to reach.