Back then, the world was ooh-ing and aah-ing at virtual real estate millionaires who were appearing on the cover of magazines like Businessweek, buying and selling land and goods in an ambitious effort to create a cohesive digital world.
But although you probably haven't heard much about it lately, Second Life hasn't gone anywhere. With 900,000 active users a month, who get payouts of $60 million in real-world money every year, and a virtual economy that has more than $500 million in GDP every year, Second Life is still a world of opportunity.
Today, the rising tide of virtual reality - with companies like Facebook, HTC, and Sony betting big on immersive 3D technology - means that Second Life's time may have come around.
"Now the world is waking up again," Ebbe Altberg, CEO of Second Life developer Linden Lab, which now has over 200 employees, told Business Insider.
Linden Lab is marshaling its expertise and experience in building immersive, functional virtual worlds to make a proper successor to the Second Life platform and take advantage of the bold new world of immersive VR. Specifically, Linden sees a huge opportunity in making it easier for people to build and share cool virtual reality experiences.
At Second Life's peak, the company had about 1.1 million users, says Altberg. Going down to 900,000 monthly users over a 9-year period isn't exactly a sharp decline.
The monetization model has never substantially changed over the years: If you want to build something, you either need to buy a plot of digital land directly from Linden Labs or rent it from someone who has. This is a healthy market, with Altberg claiming that 10 people own more than 30% of Second Life land.
Meanwhile, a thriving market in custom-made player goods - clothing, hairdoes, furniture, whole new avatars - provides a source of income for digital artisans.
It's not a game, and there's no storyline or giant signposts to tell you where you should go or what you should make.
"You have to figure out what to do, just like in your real life," Altberg says.
One Second Life user has led a small but thriving community to create an exacting replica of Berlin circa 1920 for users to tour, provided they're willing to dress their avatar up in period-appropriate clothing. In another demo, Linded showed me a mansion that a lightning designer from Dublin had whipped up, a baroque casino with pointed ceilings, stained glass windows, and, of course, a full virtual bar.
It has workplace applications too: San Francisco-based nonprofit TechSoup hosts its monthly all-hands meetings in Second Life, where as many as 50 people meet in the virtual world - tools like Skype are too unwieldy for them at that scale, Altberg says, and it provides a way for them to be in the same room even when they're not. Texas A&M University hosts lectures in Second Life that anybody can attend. Even IBM has been known to host virtual offsite meetings there.
The challenge for Linden Labs now is to take all of that and make it something accessible. Which is why it needs a new, proper successor to Second Life.
Right now, Linden Labs has a demo of Second Life running on a pre-release Oculus Rift headset. But while Linden has invested a lot in updating the game's graphics engine since the 2006 launch, it just doesn't have the framerate or performance needed for a really immersive VR experience.
Still, it points the way forward. And it's a good indication of where Linden's mind is at when it comes to VR. If people are already building virtual classrooms and holding meetings using the relatively primitive first version of Second Life, imagine what kinds of really immersive experiences they could build with a new, more modern version. It provides a common, interconnected platform for all of these experiences.
Which is why the next version of Second Life has a few clear priorities, Altberg says:
- Make it easier for people to find cool, relevant stuff.
- Make it possible for more people to attend and experience that cool stuff (Duran Duran did a free concert in Second Life once, but only 50 people could fit in the room for technical reasons).
- Make it possible for people to make money in new ways from their stuff (like letting people who run virtual classrooms rent out the technology to other universities).
If the company can do that with this next version, Altberg says, then Second Life's prosperity will continue well into the new reign of virtual reality.
The company has a head start - Linden Labs has been doing things like user-generated content, virtual recreations of real-life spaces, and massive online worlds well before the likes of Minecraft, but Minecraft still gets all the credit.
"Shoot us for being 10 years early and doing things people thought were impossible," Altberg says.