From 2005 up through 2008, virtual worlds seemed like the hottest ticket in tech, but we’ve heard less about them in recent months. We imagined the people of Earth leading double lives in alternate realities. It was the stuff of science fiction, like flying cars and robot butlers, and unlike those things, it actually looked like it could become reality.

Except it hasn’t. What happened? Are people still using virtual worlds? Let’s look at the latest developments in two of the most hyped virtual world platforms for insights into where (if anywhere) the alternate reality trend is headed.

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Second Life: It’s Doing Better Than You’d Think

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Second Life was regarded as the standard-bearer for a long time, but the flurry of press over in-world concerts and political campaigns has died down in 2009. However, it appears that the virtual world itself hasn’t done the same — or at least its economy hasn’t.

Second Life creators and curators Linden Lab reported just a few days ago that 2009 was actually kind of huge. Second Life’s economy grew 65% over 2008 to $567 million, or around 25% of the virtual goods economy in the United States. This was during a time when the real world’s economy actually shrunk.

Second Life’s economy revolves around virtual land and items, the former created by Linden Lab and the latter created by users. Based on anecdotal observation, it seems to us that a sizable portion of the property and items powering the economy are being used for adult activities in the world’s new, adult-only continent Zindra, though Linden Lab hasn’t released the data.

The author of a recent article on Second Life at PC Pro observed that the areas of the world outside the adult community seemed empty, but readers responded saying that the real problem is a lack of tools for locating like-minded people. That noted, it looks like Second Life has settled into a niche. That’s not a bad thing if it’s making money, but it’s not the virtual world explosion that the press, users, and Linden Lab itself hoped for a few years ago.

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Metaplace’s Failure To Launch

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Metaplace aspired to be the first great web-wide platform for virtual worlds. Shortly after launching, it became the foundation for 70,000 worlds.

Metaplace was envisioned to be a place where anyone could go to create their own virtual world and community, just like they can create their own profiles on Facebook. Just like Facebook profiles, the worlds could be linked or associated in a number of ways. It was also an open platform, ideal for developers who wanted to integrate virtual worlds with whatever other projects they were working on.

Since it was a combination of the best ideas in both the web and virtual worlds spaces, it seemed like the most cohesive plan for virtual world domination on the scene. It was a tough sell to users, unfortunately. They didn’t always understand the concepts that developers and designers found so exciting about the project.

The grand idea might have been too ambitious. In December, Metaplace announced that it would close on January 1, 2010. “Unfortunately, over the last few months it has become apparent that Metaplace as a consumer UGC service is not gaining enough traction to be a viable product, requiring a strategic shift,” the company said.

Nobody’s explained what the new plan is yet, but the company has said on Twitter that it’s looking for Facebook game designers and programmers.

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The State of Virtual Worlds

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Dedicated virtual worlds platforms haven’t become mainstream despite all the press attention and investor enthusiasm. Maybe most users find them too abstract, or maybe the sort of extreme anonymity they provide only appeals to a few subsets of people.

The greatest virtual world success story to date for grown-up users (it’s a whole different story for kids) is arguably the online roleplaying game World of Warcraft. Maybe the lesson to be learned here is that socialization alone isn’t enough to keep people interested in a virtual reality. If socializing is the sole objective, people usually prefer to be themselves on Facebook or Twitter.

Also consider Foursquare and Gowalla, which make virtual worlds out of the real one. Like virtual worlds, socialization on its own appears not to be enough to sustain location based services. Foursquare and Gowalla found success where previous entrants in the space had struggled by incorporating gaming elements to keep things interesting.

And while location based services and massively multiplayer video games are not the virtual reality science fiction that geeks hoped for, if you think about it, social networking and location gaming are concepts so out there that even most sci-fi authors didn’t see them coming.

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More gaming resources from Mashable:

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- The Future of Gaming: 5 Social Predictions
– Free Multiplayer Android Games [3 of the Best]
– Top 10 Games You Can Play on Facebook
– 15 iPhone Apps to Tame the Kids
– 60+ Free Classic Tabletop Games for the iPhone

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Reviews: Facebook, Foursquare, Gowalla, Twitter

Tags: games, gaming, metaplace, Second Life, social gaming, social media, video games, virtual worlds, world of warcraft

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