My conclusion after a fairly extensive study of virtual worlds was that a primary activity was sexual play and that a primary user group was disabled, mental ill, or elderly people who were often bored. Second Life opened up a sexual play world to a vast number of people who otherwise would have little option than to watch TV.
Okay for adults sexuality is a lovely thing and a basic human right and it is a good thing that disabled people have social outlets.
But the problem for business is that the appeal for these networks are kind of limited. Most adults are too busy with work, children, or doing things to be attracted to a world like Second Life. They key consumer demographics of 25 to 45 is engaged in a range of real world and other social network activities. Second Life has not been able to penetrate this group while Facebook, Twitter, Match.com, YouTube and other social groups have.
So for companies who have invested in Virtual Reality there was still the issue of how to make money. Linden Labs seems to have the disabled, depressed, and elderly population tied up. So who else is often bored, lacks social interact, wants to meet people, will to experiment in identity, and likes new technology.
I have seen that many of the new VWs that have survived are heavy child grounded. In fact I essentially gave up this kind of work because all the new worlds I went to were full of children.
But remember the other key point of virtual world: sex play. How were you going to stop teens and pre-teens from experimenting in sex.
Well my take is it is impossible. Virtual Worlds simply lend themselves to sex play. And as any born again Christian can tell you it is sure hard to get kids to not experiment with sex.
Habbo Hotel's problems should not be seen as a failure of the firm as much as a consequence of the kind of activity that VR is.
As I post some time ago Virtual Worlds create a kind of shared dream space, in which the issues of reality can be symbolically played out. This promotes an environment where more of what Freud called the 'unconscious' can be acted out. Not to be too dogmatic I would say in the dream space of Virtual Reality the person is free to act out desires or interests that can prevented them in reality.
My own research made me conclude that there are in fact a set of fairly fixed patterns of Virtual Reality usage, and that sexuality is a predominate pattern just as Freud identified patterns of sexuality conflict, usage and expression in the dream state.