With the upcoming five year anniversary of Second Life’s public existence, there’ll be plenty of editorialising and we’re not about to miss out. Below are the key achievements and challenges arising from Second Life’s first five years.

The achievements:

1. Changing the landscape

There’s no doubt that Second Life broke some serious new ground over the past five years. It was the first virtual world that gave residents enormous freedom and ownership over their creations. This alone makes the past five years a worthwhile exercise. Until then, there were gaming worlds and more restrictive social worlds like The Sims Online. Most importantly, it’s started to change the mindset of the broader population – virtual worlds are no longer just some freaky hobby experienced by a few.

2. Growth

In June 2003 there were 623 registered users of Second Life. Now there’s around 14 million registered users. Using the traditional method of a 10% active user base, that’s 1.4 million active users worldwide. That’s certainly growth, albeit not growth that matches gaming world success stories like World of Warcraft. Given some of the challenges listed below, this growth is arguably surprising and a testament to the user-driven community in Second Life.

3. Marketing

There’s no doubt that Linden Lab have had some real marketing successes, although the biggest story wasn’t created by them – Anshe Chung’s first miilion dollars . There was a deluge of new residents in late 2006 came and Linden Lab ensured the momentum continued well into 2007. The gambling, banking and ageplay bans weren’t perhaps handled as well, but overall Second Life is still perceived as a viable and attractive option in spite of its shortcomings.

4. Transparency

Linden Lab do try at times to maintain some transparency around their decisions and operations although I believe this has declined in some areas over the past year. They’re far from perfect in this regard but still a step ahead of a lot of tech companies.

The challenges:

1. Usability

This is by far and away the biggest issue facing Second Life, particularly if you live outside the USA. Linden Lab have actively touted 2008 as the year of improving the Second Life experience and there’s still a long way to go. It’s now well over a year since the word ‘soon’ was uttered in regard to SL servers based in Australia. Until this occurs there’s little likelihood of significant growth locally as the experience for most people is frustrating to say the least.

2. Relevance

With so many competitors on the horizon, SL will have a battle to maintain its market share, let alone increase it significantly. That said, the open source corse Linden Lab have taken ensures it remains the preeminent virtual worlds platform for now.

3. Interoperability

The works well underway in ensuring different worlds can directly interact but there’s an enormous amount of work still to be done. Projects like OpenSim are leading the way and the list of new grids continues to grow but OpenSim will continue to have an uphill battle against the large number of proprietary worlds underway.

4. Governance

I don’t envy Linden Lab at all as far as its role in deciding what’s acceptable or not. The numerous legal jurisdictions are enough to turn any risk manager’s hair white overnight. Things aren’t going to get any easier either as real world governments finally start to grasp the impact of virtual worlds in a range of areas – intellectual property, taxation, and health and welfare are the three more obvious ones. Linden Lab’s banking ban, ageplay intervention and gambling crackdown have had varying degrees of success – expect more intervention in coming months and years.

The overall report card

It’s hard to imagine that any company could pull off a faultless virtual world creation and expansion, so at the very least some credit needs to be given to Linden Lab, faults and all. The continued expansion of the organisation in a coherent way will make the difference between a relevant and ever-improving virtual world platform and a declining pioneer that lost its way.

Here’s to another five years of innovation and inspiration – and maybe even a more usable virtual worlds for those of us down here.

Over to you – what do you consider have been the highlights and lowlights of Second Life’s first five years?