Managing in the Virtual World: How Second Life is Rewriting the Rules of "Real Life" Business

In this paper, we will explore the growth of virtual worlds - one of the most exciting and fast-growing concepts in the Web 2.0 era. We will see that while there has been significant growth across all demographic groups, online gaming in MMOGs (Massively Multiplayer Online Games) are finding particular appeal in today's youth - the so-called "digital native" generation. We then overview the today's virtual world marketplace, both in the youth and adult-oriented markets. Second Life is emerging as the most important virtual world today, due to the intense interest amongst both large organizations and individual entrepreneurs to conduct real business in the virtual environment. Due to its prominence today and its forecasted growth over the next decade, we take a look at the unscripted world of Second Life, examining the corporate presence in-world, as well as the economic, technical, legal, ethical and security issues involved for companies doing business in the virtual world. In conclusion, we present an analysis of where we stand in terms of virtual world development today and a projection of where we will be heading in the near future. Finally, we present advice to management practitioners and academicians on how to learn about virtual worlds and explore the world of opportunities in them.