According to Virtual World News, Electric Sheep, the virtual world development company, has laid off approximately a third of its workforce. For those not familiar with ES, the term “virtual world development company” doesn’t mean exactly what you might think it means. They don’t build the sandboxes…they build castles inside them.

The Sheep has been active in Second Life for quite some time, with arguably their most high-profile project the development they did for the in-world tie-in for CSI:NY’s “Second Life” episode. And that, some speculate, led to the layoffs, since the pre-airing goal that was whispered was a million new signups from the promotion.

That…didn’t happen, at least not to that extent, despite quite a bit of interest.

(Hey…it’s on their blog at ES. Apparently, she has the ES logo tattooed on her arm, but I haven’t gotten around to checking yet.)

And now, we come to this:

“We are disappointed by having to make such a tough call,” says (Valerie) Williamson. Divisions affected included the virtual worlds advertising network, which was focused initially on the Second Life platform, and the company’s virtual worlds events team as well as a consolidation of the creative staff.

Okay, first up…this is not, I repeat, not an opportunity for the nay-sayers and doombringers to start screaming “It’s over! It’s over!!!” in regards to the potential of virtual worlds. However, this might be a sign that “SL Fever” may be starting to run its course, according to a tidbit added to the story by Massively:

It has been previously noted that ES had to cut back on the number of islands for CSI: NY, and now both AOL Pointe and Pontiac are pulling out of Second Life.

Corporations that don’t sell virtual sexual aids for furrys pulling out of SL? Do they have no vision? Well, guess what? Even if they don’t, ES does:

While Sheep remains committed to the Second Life platform where it has been predominantly focused, the company is focused on diversifying to other platforms as well. “We need to be nimble to take advantage of new platforms such as Metaplace, Multiverse and Icarus,” says Williamson.

Damn skippy. Sure, SL has (some would say “had”) potential, but it’s about time someone started the trend of looking at other virtual world potential. Or just making their own.

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