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.

Is this the beginning of the end of "Second Life Fever"?