Open thoughts to Linden Lab about the real commodity of Second Life

[Dartagan Shepherd]

I just finished reading an article that detailed the continued decline of a what once was a profitable business model here in SL. Said establishment had been in SL since 2004. Rather than excessively blame SL, they were rather thoughtful in explaining their situation, and how their closing here came to pass. Article here: http://elfclanvr.grouply.com/message/2233

It points to all of the key elements that are root causes to the slow decline of Second Life.

A Marketplace that never needed to be owned by Linden Lab (whether this truely serves as a sink, or ways to cash in on L$ or use it to pay employees salary or bonuses), thereby destroying not only many in-world businesses, but also leads to the decline of land sales and tier. It also ripped the potential for users to establish profitable commerce ventures of their own.

Increased and obtuse Land impact (previously called Prim Equivanlency) costs to serve as more sinks, thereby taking more money away from users, and further decreasing Merchants profit margins. Scripts have nothing to do with prims. Size has nothing to do with prims. Your lack of hardware resources that you provide for sims have something to do with the impact of prims and their "cost" to the user. A flat "pro" fee on top of a premium account would have scratched your profit itch alongside a very modest upload fee. Reference the original article pointed to here to see how even L$10 uploads impact some of your merchants to the tune of hundreds of dollars. Yes you need to store larger files with Mesh, so be it. For $30/month for a pro account and a L$10 upload sink, you can find a way to afford it.

Repeated attempts to participate in the economy yourselves always fails. (Again, reference the included link.) This latest land sale resulted in roughly 600 new sims for LL. Land barons are not happy, ACS removed nearly 200 sims. Expect this to bite you more as time goes by. Or go whole hog and reduce an already rediculously priced tier down to something reasonable for what people actually get. $300/month is outrageous. Don't fire-sale it, lower the price across the board and create more opportunity, not less. And upgrade the hardware while you're at this, please. A $195 setup and $100/month fee should buy a sim on a dedicated machine at your level of purchasing power. It may not pay as many employees, but then again you don't need so many that don't get their hands dirty with the job of direct maintanence and development.

Commodity #2

Despite these high costs and excessive sinks you continue to decline. Note this is not a sky is falling post, but you do need to start taking notice and action at this stage. Adding features will not help unless they directly relate to the core product, which is one of your key commodities. People bought into SL as it existed for the most part in the 2006-2007 era.

A couple of examples. Lag is often explained away as opposed to games because games are downloaded, pre-rendered content. Then solve this ... once I go to a sim and download the content it should be as fast as a game. If that slows down travel from region to region, bite it on this one. Surely you can get where I'm going with this ... there's room for speed improvement if you change the way you're handling this. Longer download times and pre-processing may break the illusion of contiguous and immediate spaces, but will lead to smarter choices and longer times spent in places travelled to.

Development. The limits on memory, the amount of data able to be transferred into/out of SL is rediculous. Improve the scripting. After 10 years, you should have had a nice little object oriented, stable scripting language capable of developing some pretty sophisticated applications and open pipes to data and various formats. Stop being so stingy, I feel like I'm developing MUD scripts back in 1992. Go Diku. MUSH code and MUF were better at this 15 years ago, and had less of a memory footprint.

The UI. Just ... ugg. Think game. Think fun. Product managers who know product design dictating to coders, not coders writing for end users. I got behind Viewer2 with open arms. It's still more beastly than any enterprise application on my machine.

Commodity #1

The People. You're not listening. At all. You kind of do, piecemeal, but for the most part, majority says you don't get it after 10 years. Boiled down it relates to the above. Make what works work better. Stay out of the economy. Lower prices. Make people who are here happier to be here. When they get happier they tell more people. Stop getting involved in the world. When your employees want to come up with lots of bright ideas on how to make this thing even cooler? ... Stop them and tell them to get back to work at either keeping things running or get back to developing.

People are here because the most amount of people are here.

You have history to fall back on, with worlds that have come and gone and why they didn't work or stagnated. A dozen VRML worlds, Blue Mars, There.

Are profiles the next big thing? I tend to think no, they weren't worth the effort, or a particularly brilliant idea to try to capture social networking aspects, yet you blew money on this. No one asked for them. Learn from your mistakes.

Ad placement on the Marketplace is even remotely important when core features don't work? Bring back banners and call it done, and focus on the functionality. Don't spam google. Don't face-tweet product listings. Just make it work. Users outside of SL don't buy SL goods and users inside of SL don't need your help selling and advertising it if goods get displayed, searched and delivered properly.

The in-world experience is the most important aspect of your product, the people who populate it would go elsewhere quickly if enough other people were there to dance with them and buy their goods, the resentment comes from a lack of interest in your core product and your true commodities, which are few and simple to focus on.

After that's done, think about re-branding. Second Life sends a message to outsiders not into virtual worlds that we're a bunch of losers who can't cope with first life. Try reading blog comments by non-SL users sometime, it's the majority response.

Go. Do.

 

[Chelsea Malibu]

The article on the ElfClan was so indicative of what we went through on the corporate side as well.  We opened the 9 Sim Club Jenna/Ecstasy islands project and the same issues with price changes, price compression and so on which caused us to have to say goodbye to SL.  We bought 4 sims at $2,000 each only to have them lower the price to $1,000 about a month after we took delivery on ours.  That devalued our investment by $4,000 almost instantly.

There is a notion in the postulates of economics that when you charge more for something than it's perceived value, sales go down.  This is in large part why we have 1/2 as many sims online today as we did 4 years ago and why SL is seeing this kind of attrition.  If their stats are correct, 10,000-20,000 new residents a day would have a significant impact on growth yet concurrencies and economics remain flat. 

I have moved into a new Virtual World as well and though the traffic is not there yet, I do find the prices to be in line with what they should be and we are banking on the idea that we ourselves can drive traffic to our region much like we did in SL.

As bad as it may seem, in the end, SL is still the most stable and popular platform out there but I am still looking into other worlds to make home.

[Ela Talaj]

Seems to me the authors of the quoted article do blame the Lab for their decline. Yet business models must change to accommodate market changes. Some of them might be indeed caused by the Lab's policy/pricing changes but the Lab is under no obligation to cater to a specific business models of their customers. Others however have nothing to do with the Lab. People vote with their feet. The Lab did nothing to promote the use of the Marketplace over in-world sales yet it took off like a rocket because it is undeniably more convenient to shop on the easily accessible web page than in the laggy and not always easily accessible world.

Landlords create no value, all they do is charging extra for the "land" (bandwidth) they are renting from the Lab. Why should anyone pay them, when mainland bandwidth at the Lab prices is available in abundance? The only reason for a merchant to rent a satellite store is additional traffic at its location. Yet most landlords do very little to create, maintain and increase traffic to the stores that rent from them. The marketplace evens the playfield by eliminating the need for satellite stores altogether. Perhaps it may eventually result in the whole concept of  "land" renting being devalued and replaced with something else. The Lab did not cause it, the users did.

I'm not going to cry about decreasing land market. That does not mean the end of SL, it means the end of an era in SL but same happens in RL once in a while as well. Perhaps more future business models would be oriented toward offering something of value instead of re-selling facilities made available by the Lab.

As for scripting tools the OP mentions, I seriously doubt that they could be greately improved unless an abuse of existing ones by hundreds (maybe thousands) home-made "scripters" is put and end to by licensing access to the compiler to those able to pass a software 101 test.

[Toysoldier Thor]

Great posting Dart.  A lot of good and valid points.  The writing was already on the wall two years ago - just the messages of SL's risk of healthy existence has just got louder over th epast year.

Ela's posting and comments are so far from surprising that I could have written her response.   At least if nothing else her blind loyalty to defend LL and blame all others for LL's screwups on running SL into the ground are consistent.

And in the interests of not ticking Sassy off, I will end this post right now. 

 

[Rhotis Paine]

Actually they did a very very large thing to market the marketplace.  When you go to your dashboard on the SL site you have a menu for shopping that takes you directly to the Linden Lab branded marketplace.  That is massive in and of itself.  

On land while I agree with you on the broad idea of Linden Labs not devaluing land with the marketplace I disagree that estate owners offer no value.  If your estate owner offered you no value perhaps you were with the wrong estate owner.  Not all of them simply offer you a blank parcel in exchange for some lindens and "I will see you when the rent is due again" mentality.  Several estate owners have various levels of co-branding and advertising sharing resources that can benefit merchants.  If you are not utilizing an entire sim (If you are  if you can afford it it is obviously financially more advisable to buy direct from Linden Labs) then you are renting a parcel of a various size which means you will have neighbors.  This is where estate owners and the quality of the estate adds or subtracts value from your enterprise.  Does the estate have policies on how many stores,  how much resources each store can take based on the land they have and so on.  If you and your competitor are selling similar products of similar quality and prices but your competitor's store is on mainland and your customers cannot walk while your store is with an estate that does frequent performance testing and trapping of sources of lag with a 24/7 management staff there to assist you with any issue about your land,  then your customers will see the difference and they will tell their friends.  

So the basic idea here is if you want (or need,  I will never buy a building I cannot walk through first) land for your store then rushing to the absolute lowest price per square meter is not really the best choice,  specifically for a business.  Find out what the estate you will be renting from can do for your business.  I big hint,  if you cannot reach management when you have a question about their land as a prospective renter,  then you will have similar issues reaching them when you are already a customer of theirs.  Find out if they do performance testing.  Find out what they consider tolerable Time Dilation and Sim and Physical FPS levels.  Find out how often they check their sims manually for lag (meaning someone actually teleports to that sim and tests it).  Find out what avenues they have that you can use to leverage your business in the greater Second Life community.  Land is not just land with the only difference being the price.   

[Toysoldier Thor]

OK Sassy... dont read this post... it could be a bit longer. <sniker>

So lets paraphrase what Ela is trying to convince most others that read her post.

 

• "LL is under no obligation to cater to a specific business model"...  aka LL can do whatever they want and they dont have to listen to and service the needs of their customers.  In Ela's concepts of how to run a successful business, the Customer is a burden and pain in the butt and so servicing these annoyances when running a successful business should be the lowest priorities.  LL should not cater to its customers, they should cater to their own self interests!
• "Others however have nothing to do with the Lab"... aka LL is never at any time at fault for all the declining business / market indicators that even LL's own politically spun quartarly stats cant hide.
• "The Lab did nothing to promote the use of the Marketplace"... aka please disregard that LL's own TOS does not allow Merchants to let inworld pricing be lower than MP pricing, disregard that any LL marketing you see promotes the MP but never the shopping at inworld stores, disregard that inworld search has only gotten worse not better, disregard that LL's commerce team is pretty much 100% dedicate to working on MP initiatives and not to improve the ecommerce of the inworld merchant / economy.  ( I will agree that with Ela on one thing, because of LL's conditioning of the customer buying options - the vast majority of SL residents have voted with their feet and are turning inworld marketplaces into abandoned ghettos - see Ela we can agree on somethings)
• "Landlords create no value"... aka Ela hase never heard of the concept of how Landlords provide a service of taking on the risk of investing in LL's volatile real estate market values but purchasing and paying teirs for sims that most SL residents cant afford on their own and carve it up in smaller parcels that we can afford.  That Landlords can provide better sim management and services that LL provides ZERO value-add service on mainland.  Sadly I have my store on a mainland and I challenge Ela to live on a mainland parcel and deal with Mainland'ss horrid lag and try to get the mainland sim rebooted with its needed.  Funny - with private sims this is possible.  Finally as a renter of a parcel of mainland, try to get ant form of sim/land support from LL when you have land issues?  Unlike LL, a Landlord is someone you can successfully approach and get resolution to resolve.  Big landlords can even be big enough to get LL's attention when a land issue needs attention - no hope for a mainland renter.  
  
  BUT... of course Ela sees no value in Landlords in SL.  They are just gouging all those 100's of thousands of renters and tenants - their customers - and all those SL residents are so stupid as to not known any better so they stay.  Isnt it funny how in paragraph 1 Ela says Customers will vote with their feet yet in this paragraph she basically is willing to say that Customers DONT vote with their feet?   Bit of a hypocrit from what I see.
• "I'm not going to cry about decreasing land market"... SL land market values are collapsing (just as housing and real estate market values have collapsed in the USA in real life) but unlike what almost all economic analysts would tell you that this is a BAD SIGN - Ela thinks this is just a shift in the SL world and it only means some magical future opportunity ("perhaps") will fill this void.  Hmmm considering that sim teirs is where LL makes most of their revenue and sim usage is declining -800+ sims abandoned in the last year, Ela had better hope this yet unknown new ERA show up quick before LL ceases to exist.  HEY Ela... here is a new era and business model to consider... that SL's customers VOTE WITH THEIR FEET and set up new business models in growing cost effective open sims and walk away from SL.  Ooops - seems I hear footsteps voting on that now. 

Final comment Ela.... a question.... do you honestly believe that SL is in great shape now... that LL's is a well run smart operating company.... that there are no risks to SL or LL as a company... and that LL is not at the primary factor for all that is currently wrong with SL now?   Careful how you answer this - there are a lot of smart people reading these posts and your answer will position where you stand and the credibility of your future posts.

[Medhue Simoni]

Well, while I'm sure that elfclan could probably be more responsible for their own decline than they let on, but most of their bashes were very much warrented. I think we can all see the pattern now, and there kind of is no denying it. LL has made many, many bad decisions over the passed few years. Most of them during their peak too. How the high ups or any1 at LL doesn't see where the mistakes are and were, that amazes me. I guess, every1 can blame something. Maybe there are too many perspectives to see any 1 thing clearly. We have had quite few different lindens moving in and out tho. Of course, I'll give my view. Yeah, it's narrow, but any good business man/woman needs to always keep an eye on the overall economy.

*Are land prices too high?  Definitely, and the set up fee is straight out, ridiculous! Even a $50 cut off mainland and private tiers would be something to smile about there.

*Long time bugs and structure problems that never get fixed, are killing SL? Yeah, but I will say that I am seeing things get worked on.

*Marketplace killed inworld shopping? Maybe for some, but I would argue that it had more to do with the broken search engine and messed up equations. IMHO, it is still messed up, see Problem with Search #2 below. If you add the normal SL problems in with having to teleport to a couple dozen places to find anything related to what you search for, then I think you see why the marketplace got so popular.

Here are some things that I think LL still needs to work on. IMHO, if they do not fix these things, SL will continue to gradually decline.

#1 The problem that I think is the most disturbing, that is most important, and somewhat general, is a viewer that actually works, on most machines. I might be exagerating, but I swear that I have yet to use an Official SL viewer that did not have some major issue, if you could even log in with it. I think being able to log in is important, and apparently hundreds of newbies in the answer forums think so to. It is like the most asked question, "why can't I log in".

     This just happened last week: A customer wants me to make speech gestures. No problem, I like making them, but I never use voice cause it never works for me. So, I think, no biggie, I have 3 computers, 1 will work. NOPE! Not 1 would let me use voice. I tried everything. Then, just for the hell of it, I tried the Firestorm viewer. Bam!!!! It works. 2 days of banging my head against a microphone, and all I had to do was not use and LL viewer.

#2 The second most important issue, to me, is SEARCH. Oh, i think LL thinks it is fixed, but I say it is as messed up as it has ever been. You can actually spot the exact day that the broken search was implemented on almost every statistical graph concerning SL economics. It should not really be a mystery. We don't need super complexed agorythms. It is actually quite simple. We have the keyword, which is most important. How many times does that show up? We have the land mass. How big is it? We have the traffic. How many people go there? Whoever has the most keyword hits, with the most land, and the most traffic are #1 and so on. Keywords being the main factor, but not how many keywords fills a tiny space. I would even throw in the age of the land. That being the smallest factor. Fix it, please!

#3 Free stuff on the Marketplace is down right nutty. Just another reason the marketplace got so much attention. Why hunt around SL, looking for free stuff, when you have free stuff galore right on a webpage. This is why the old Xstreet and inworld stores and locations had good co-existance. Xstreet didn't put low priced items at the top. All the real freebie gems had to be found inworld. Like a reward for all your travels. Now we have merchants who's whole marketing plan is giving away free stuff on the marketplace, and the crazy thing is, it's the only free marketing in SL anymore.

#4 Make **bleep**e better, lol. Ok, I left the best for last. Even though, my SL existence is tentative also, I'm seeing more improvements lately than I've seen in my last 5 years. Or, at least behind the scenes and fixes being looked at. The new UI impresses me, which, outside of artwork, is not easy. I'd like to see the menu wheel back tho.

#5 I'll add this just as a side note. I pay alot of money for land that may not, some day soon, be viable to actually own anymore. Lowering that cost would help a little, but I still would rather LL fixed other things so that I can keep doing what I love to do here, and able to eat.

[Dartagan Shepherd]

Some real wisdom and experience in these posts.

That's a shame, I can't imagine losing that much value to sims a month after the fact. Your situation is also indicative of issues that have all but dried up solution providers and those bringing corporate accounts into SL. Those are some heavy hitters in the adult industry that you deal with, and it should be more viable to get them in here on larger scales.

Unfortunately in order to lower prices, existing sim investments would have to be devalued.

I would suggest that they start with tier, because everyone benefits from lower tier ... it speeds up the process of recouping the initial costs, and then schedule lower prices for setup in order to not have those devalued in the short term. The downside is that sales would slow as people waited for the lower setup costs. I think the longer term benefits would justify it though.

Didn't mean to imply that people should jump ship to other platforms, would still like to see SL be the leader. Was a bit blunt in the OP, but hopefully that comes off as more constructive than bashing. I think we need LL to make some really hard decisions in order to move forward. The pricing model is still based on boom years which are over, and not at all based on the current RL economic conditions and a more realistic growth curve.

@Ela: I see your point, middlemen aren't "needed" for land but there is this ... SL is still promoted as having an "economy". While this is a fictional and manipulated economy it's partly about perception. Our CEO was saying at a recent BBC radio podcast that people earn livings here in this "economy". A strong part of the economy in RL is the business of reselling, from a wholesale/retail level to real estate, etc. Reselling is one way that makes an economy tick. The Marketplace in that sense is just another middleman, selling other peoples goods.

Do we even need a central Marketplace? Technically no, this could as easily be set up as individual shops under profiles. As long as you can search for products, it wouldn't matter if a centralized marketplace didn't exist, you could still find products and buy them from individual web based shops in peoples profiles, still with a "shopping cart", and never have a Marketplace. On the other hand, having a central Marketplace earns LL 5% off the top of your goods. This is the value of reselling, whether it be virtual goods or land ... multiple tiers of opportunity which add more bulk to an economy.

The problem in the case of the Marketplace is that when it wasn't owned by LL, a portion of that 5% would find its way back into the economy. SLX, OnRez and other independent markets would pay staff, would pay for programming, buy sims, etc. Once LL owns it, that 5% completely disappears from the economy.

It's the same with land. If LL were to eliminate land middlemen, that's more money that simply disappears from the economy. Also they give the perception of supporting land middlemen with things like the Atlas program ... discounts for land barons with large amounts of sims that add value on top of land.

[Dartagan Shepherd]

@Toy, just wanted to give you a nod about the old conversation on whether fees are taxes. Still don't view them as that way in relation to the Marketplace, but as it relates to sinks in general they're starting to feel like taxes. Mesh upload fees in particular, or rather Land Impact ... I'm suspecting Land Impact will be including normal prims in the future. Reason being that "taxes" are now being raised to unreasonable levels.

LL should not be justifying their "costs" in terms of raising taxes. The tax for rendering, how much scripts cost, how costly avatars are, etc. Stop raising taxes, they're killing the economy. You're taxing users because you won't put them on better hardware and increase the efficiency of the viewer. This is not our fault, it's yours, LL. You foot the bill on this one.

Side rant for good measure, nix the sale of themed sims, for every themed sim you sell, you take income out of the mouths of merchants.

What does the future hold? Approved official products? Will LL someday be competing directly with Merchants for virtual goods? That may be dramatic at this point, but at the rate you're swallowing up earning opportunity for users, it's looking more like a science fiction writer nailing future events from my vantage point.

@Medhue Have to say I agree with most of your points, and apologies for coming across like LL isn't making some good progress in certain areas. Lots improvements in the last months. Even NPCs I think are a good thing, although I'm hesitant that those won't come with limits that would make a goodly amount of NPCs running around a sim unrealistic.

UI improvements? Should I be looking at the beta viewer? Not seeing much of those in the stable release and haven't been keeping up on betas lately.

Amen to freebies. I get the value of the freebie as an upsell, but not for their own sake. Freebies are most valuable as an asset in general by creating a fun experience in world hunting for them. An excessive amount of freebies in a Marketplace is just an abuse of a dictionary.

Just a disclaimer, wasn't trying to paint the Marketplace as an in-world store killer per se, I've been using marketplaces to browse goods since SLX and Electronic Boutique, long before the Marketplace came along. I just think there are many ways to keep both strong, and there is no effort whatsoever to strengthen in-world sales.

Also yes, things change and people need to adapt, but when the adapting is continually more difficult financially speaking, the things we  have to adapt to aren't working for us.

Not to mention that they don't "need" 5%. And if they keep it, 3% can easily go to Marketplace afilliates, if they ever build in ways to resell others products in that way. Share the wealth, grow the economy.

Merchants need a bailout here if you want to get the economy back on track, you're leeching too much of it, LL.

 

[Gavin Hird]

 

Some interesting and good points being made here. My 5 cents for LL and SecondLife to re-invent itself:

 

• LL must get out of the business of eroding on resident business; the marketplace is a prime example
• Their focus must be to facilitate transactions to stay in-world and not being diverted to web sites that slowly makes it less and less interesting to log in and stay
• Their focus must be for resident interaction to stay in-world and not on their web sites or even 3rd party social media like twitter and Facebook.
• They urgently need to get a mobile viewer out that is compelling enough to make residents stay connected to SecondLife throughout their day. They siginficantly need to raise the relevancy bar in competition with the other offerings out there
• The need to stop making gettos like Linden Homes - essentially making hundreds of servers running idle 24/7. Linden Homes should be merged into vacant mainland sims and parcels to act like small nucleuses that would encourage business and leasure offerings to spring to life next to them. 
• Finally, they need to start offering the server backend as a licensed product to creators who want to make competing grids. The reason is that the legislative environment in which LL is incorprated (CA, USA) has become a liability as far as creativity goes. It also impose a very US centric view of the world that is fine when expressed as Hollywood movies, but simply does not fit people outside of the US very well. A good example is the adult policy which most Europeans will find very prudish in comparison to their RL experiences.  We see Apple is running into the same type of issues in Europe when trying to impose CA legislation and world views on content in the App store. 
• To complement the licensing of the platform, they need to facilitate portable directories and teleportation between grids based on their platform. 

EDIT: This point about the legislative enviroment and the Linden Lab policies that follows is important because nobody wants to pursue a "life" or hobby that allows less freedom for self expression than one experience in real life.  This is possibly one of the main causes for the stagnation of the environment and why newbees don't stay.  You can also transfer this to the viewer which has made it much less intuitive and attractive to build and design in-world. Mesh adds to that. 

[Anaiya Arnold]

They could avoid devaluing existing sims by simply charging a set up fee to those who want to pay it and offering a set up fee free option and having different tier rates for the two.

For any sim that has ever incurred a set up fee, tier should be one quarter to one third cheaper than current tier.  For sims that are set up free, tier should remain at the rate it is currently charged.

This makes the set up fee a worthwhile investment for those who have already paid it and for those considering getting a sim over the long term.  Anyone who does not wish to front up a set up fee should be able to rent a sim from LL at the current going rate.  This would be attractive to those who wish to have a short time event.  It's also a good way for someone to trial sim owning with the ability to not pay anything beyond tier, so they can determine if they can afford the sim long term and therefore want to commit to paying the start up fee (to access cheaper tier).

While LL is both not growing and slamming sims on servers like sardines, a start up fee is really not justified, particularly if it offers any hinderance to long term tier payments being received.  A short term one to two month rental of a sim should be profitable to LL at the current tier rates without a set up fee as they should have both surplus server space and a somewhat automated and relatively low labour-cost means of initiating a new sim.  LL should certainly be able to make a good profit on longer term sim rentals (given the current state of servers) at a rate somewhat lower than they are currently charging and the lower rate would justify a start up fee from the buyer's perspective if there was an alternative option with no start up fee, but significantly higher ongoing tier.

[Ela Talaj]

We must see things in proper prospective. SL economy is not a model of a real world economy. Perhaps of some other world where people can instantly travel between continents and don't need to eat, but certainly not Earth. SL is basically a videogame intended for people to escape real world. The Lab provides a platform and general infrastructure for the game but it has neither means nor desire to provide individual accessories and applications for players. This void is filled by some players who spend time producing 3D accessories and applications, making the game more realistic for players. Basically they charge for time spent and as the game tokens are convertible to real currencies it may constitute some part of their real income. These are the merchants. There are at best only a few thousand of them doing it on more or less permanent basis. But the game has hundreds of thousands players. The Lab would be rather unwise to orient its business model toward this small fraction of customers, and those expecting it would always be disappointed.

For as long as players can easily obtain merchant's creations their gaming experience is enriched and they may spend more time inside the game. This is beneficial for each of the 3 parties involved: the players, the merchants and the Lab. How the players actually connect with merchants - via a web page or via the game itself (in-world), should not really matter for any party invlolved. If the players find it easier to go thru a web page, which is apparently the case, so be it.

The only ones care about the point of contact between merchants and players are  "land barons". These are the people who resell bandwidth (land) provided by the Lab. Having "land" is definitely enriches players gaming experience. However those "buying land" directly from the Lab are stuck with it, the Lab would not take it back on request. I bought a mainland parcel from the Lab 4 years ago and stayed there ever since. (I must say that whatever sim problems I had during this time were always timely resolved via live chat with customer support. for instance, once a large number of non-replaceable (no copy) objects were "eaten by the server" and the Lab issued a refund for each one of them in the amount I listed, no questions asked, within 24 hours).

Not all players however find it convenient to be stuck with mainland. Land barons renting out provides flexibility for the players and that is the only value their service has. Many players are willing to pay extra for this value however the Lab cannot cater to landlords either because once again their number is insignificant as compared to the total number of players.

If we keep this perspective, we may conclude that as the total number of players is either slowly increasing or at least remains statistically stable, the Lab must be doing something right.

 

[Ela Talaj]

 When I go to my dashboard on the SL site there is the Buy Land button right next to the Shopping button.

 

[Anaiya Arnold]

LL needing to receive tier for substantial volumes of land is not all about merchants or land barons but all about LL's ability to remain solvent.  That's their primary revenue source and make believe play money from marketplace commissions is not a viable alternative.

The Lindens cannot pay their bills, their staff and their share holders in play money you know and that's all they get for hosting our content on the market place.  In world on the other hand,  they get to charge tier for hosting our content, and that tier is payable in real US dollars rather than imaginary play money.

 

Evidently the Lindens do not agree with you.  They offer discounts on tier to the biggest landlords because while they may be few in number, they happen to account for a huge chunk of LL's income.

[Sassy Romano]

---

Gavin Hird wrote:

To complement the licensing of the platform, they need to facilitate portable directories and teleportation between grids based on their platform. 

---

Be careful what you wish for.  Hypergrid is just this.  Do you really want your assets to be exported by a customer to a different grid, possibly their own running on their own PC.  Who do you think then has full access to the asset database on that private region?

I agree with the mobile application, that's what makes Facebook and twitter handy though I use neither but they do let people with the 2 minute attention span stay in touch with their friends although that's not what SL is.

Here's the thing though, people are saying LL should be focussing people to go inworld but that's assuming that fits in with the LL strategy.  Maybe, just maybe they really want a fully web based "Second Life" after all?  You see, that's my question to LL.  "Precisely who is your present target customer?".  They didn't want the individual but went after corporates.  FAILED.  Anyone of us could have told them that.  They went after the education market and killed that.  They really would prefer that the adult market just stayed under the carpet and with the merge of the teen grid, that was a way of killing off the teen grid to save money.

So just who exactly are they after?  The Facebook crowd already have a home.  Not sure if you realised that already LL?

As for Toy... yes I did manage to get through both your posts, the first was in accordance with my 3 paragraph attention span and the second sort of was, it was just 3 very long paragraphs.  Way to go Toy!

[Ela Talaj]

Any business offers discounts to wholesale buyers, the Lab is no different. The data as to bandwidth revenues distribution between wholesale and retail we do not have so meaningless to argue. We don't even know if most of the Lab revenues come from tier fees or from premium account fees.

[Gavin Hird]

I am sure careful engineering of the asset store in a licensed scenario would get around too much content leaking out of the platform.

It was kind off the same arguments the music industry used for applying DRM on music sold online, but Apple showed them that selling non DRM-ed music on iTunes actually increased their revenue substantially. So I am not super worried about it. 

[Gavin Hird]

SecondLife is not a game. Period!

By using game and players you introduce substantial flaws and limitations in your analysis.

SecondLife is at the outset a general purpose infrastructure platform for building virtual realities. The platform consisting of the sim server backend, asset store, utilities, the client and the content development tools incorporated in the viewer and server backend. 

The platform can be utilized for anything from building architectural models, education, training, planning, personal interaction, art to gaming. As a gaming platform it is not particularly well suited. 

SecondLife as we know it also contains games and gaming, but it is not a game. 

What Linden lab completely fails at is working closely with and empowering their developers to deliver the most compelling experience to attract new users and keep long term customers. 

A good parallel is Apple, the iOS hardware and the App Store. 

Apple delivers a client hardware platform with operating systems and developer tools. As part of the package Apple delivers a few applications installed on their clients in addition to market a select few applications like iWorks, iMovie, Garage band ad so on. However, the bulk of the user experience is delivered by content providers in a very large and well managed developer eco system where Apple makes (for many) a compelling business proposal to make money out of their content. Per the company revenue to their App Store developers have so far been close to 3 billion USD. 

Contrary to what many believe, Apple listens closely to their devlopers and their needs. They also provide them with timely information for their developer community to be able to deliver the best and most compelling experience at any time in their applications and content spanning from business to games. 

This is in stark contrast to what Linden lab most of the time does where is seems to prefer to displace content provider business with their own, in addition to be very secretive on their development plans to the extent new versions of the software often introduce major disruption to developers. 

A good example of not listening to developers are that mesh are being introduced void of facilities to fit a clothes item to the avatar without substantial effort from a developer when this could largely have been built into the platform.  Another example is viewer 2 (and the version 3 sibling) which significantly hamper developer productivity having put off or discouraged content providers. Another example is the implementation of the marketplace which, as Steve Jobs would have put it, simply sucks. 

As per my other post, I think Linden Labs would do substantially better in licensing the platform to many capable providers and get out of the business of trying to micro manage a business model that has little scalablilty as it is currently employed. 

[Dartagan Shepherd]

Sassy Romano wrote

I agree with the mobile application, that's what makes Facebook and twitter handy though I use neither but they do let people with the 2 minute attention span stay in touch with their friends although that's not what SL is.

Here's the thing though, people are saying LL should be focussing people to go inworld but that's assuming that fits in with the LL strategy.  Maybe, just maybe they really want a fully web based "Second Life" after all?  You see, that's my question to LL. 

"Precisely who is your present target customer?"

.  They didn't want the individual but went after corporates.  FAILED.  Anyone of us could have told them that.  They went after the education market and killed that.  They really would prefer that the adult market just stayed under the carpet and with the merge of the teen grid, that was a way of killing off the teen grid to save money.

So just who exactly are they after?  The Facebook crowd already have a home.  Not sure if you realised that already LL?

---

Very good question. There doesn't seem to be  a focused plan of attack. Social networking is a bust, people here value privacy and don't buy into it.

Web based and mobile wouldn't be a bad strategy.

I'd say "social gaming", but serious game development isn't possible here without better support and pipes to get larger data in and out of databases, swapping out assets, properties on objects, globally accessible data in-world ... limiting prims and scripts kills that idea even further, and speed/rending is unrealistic in terms of large scale smoothly running games.

I could get behind nearly any direction, but I'm not sure there's much of a clue in that regard

Seems to be "anyone we can get to sign up while we're winging it". After 10 years that's not much to go on.

What I do know for certain is that if you take away the ability to cash out, it'll be dead in a year or so, so "creativity space" alone isn't all its cracked up to be, and virtual goods are vital, which is why I harp on stimulating opportunity and lowering costs to facilitate that aspect of it.

They just can't seem to find a focus, and seem to be afraid of publishing a clear strategy.

 

[Toysoldier Thor]

Gavin, I agree with your response to Ela.

Her disbelief that there actually are serious fundamental flaws to LL's primary product in the market due in most part to a continuous stream of poor business decisions and shotgun business strategies is based on her belief that SecondLife is either some Utility Gaming Platform.

SecondLife is not a GAMING PLATFORM.  There are critical aspects to SL that make it completely unique to a typical Gaming platform.  But if one truly believes the SL Grid and its related products/services are nothing more than a GAME Platform, of course the logic in posts like Ela's is understandable.

If SL is nothing more than a Gaming platform and LL's only job is to be a utility provider of this gaming platform, then the concept of the virtual economy being completely tied to a REAL LIFE currency via an exchange makes no sense.  If its a game than LL should sell LINDEN Credits and keep the cash from this sale (i.e. like Habbo Hotel credits for customers to buy company created accessories).

If LL is - as Ela stated "The Lab provides a platform and general infrastructure for the game but it has neither means nor desire to provide individual accessories and applications for players", then LL should not care if there even is a virtual economy in SL.  They should shut down the MP since their job is not to promote or get involved in the virtual economy - afterall they are just there to provide a place for all us customers to rez our avatars.  It should not care about virtual created content being stolen since whatever happens on the grid is an issue between customers.  Its like a power company worrying how I use the power in my home.

Unfortunately what confuses ppl like Ela is that LL created (and they know this) a Virtual World which is primarily successful because it spawned a virtual economy the allowed its own customers to use this virtually generated REAL VALUE currency to sustain and increase the customer's own activity on the grid that LL makes money from. 

As the posting from the ELF CLAN clearly demonstrates and what we have been witnessing over and over on the SL grid by many other similar examples, its because of the LL failings that have caused the collapse of the SL virtual economy that is cause LL to lose their customers in droves to competing grids with more economically viable economies than SL.  LL lost Elf Clan because the Elf Clan could not generate enough sustained inworld revenue to allow it to grow the SL grid and its use.

So Ela, your view of the LL Model of business you think they are offering is fundamentally flaw.  LL is a critical vested interest to support and promote a healthy growing inworld virtual economy.  IF they dont (and their repeated bad business decisions prove they havent) then LL will lose the customers they require to keep SL a stable (much less growing) product that LL needs to be a viable business.

But maybe that is the problem.  LL Sr. Management thinks and acts upon what they think and what Ela thinks... that SL is only a gaming platform and what goes on in the grid is not their problem.

BUT THEN..... Why did LL invest and take over and monopolize the Web Shopping market for SL (i.e. MP)?

This goes to was Sassy said and many of us have been posting for years....  LL's Sr. Management has never and still does not have a solid understanding of what they want to be when they grow up and therefor they have no Winnable Focused Business Strategy to work from.

 

[Toysoldier Thor]

I guess it also explains why LL hired an expert in GAMING to be the CEO of LL.

If Rodvik puts on his skills and talents as an awesome GAME CREATOR... this only further sinks SL since he will only further try to make a football player into a ballet dancer.  (That Dog Dont Hunt)...

As such it seems that Rodvik is the next generation of a Failed Experiment of management at LL.

[Sassy Romano]

---

Gavin Hird wrote:

I am sure careful engineering of the asset store in a licensed scenario would get around too much content leaking out of the platform.

It was kind off the same arguments the music industry used for applying DRM on music sold online, but Apple showed them that selling non DRM-ed music on iTunes actually increased their revenue substantially. So I am not super worried about it. 

---

Yes to careful engineering but I don't see that happening.  There's a massive amount of work around that content protection and it's got to be via a committee model since nobody owns the rest of the grids that are out there that want to interact.

You might think differently about licensing when someone exports your content to their own server, rips it and re-sells it on all the other grids.  Yes they can do that right now if they copy it that's true but I wouldn't want to hand it to them on a plate.  There's a HUGE amount of IP that goes with scripted items for example.  If anyone got full perm access to scripts on SL that make key products work, that's really throwing the baby out with the bathwater.  No thanks.  There's a mass of maturity to happen first.

It feels like inter-grid teleports and security are about where the internet was in its infancy, no security because everyone wanted inter connectivity and didn't think bad things would happen.

[Anaiya Arnold]

What?

LL's biggest source of revenue is from tier. 

Your argument was that LL should not cater to baron landlords because there are few of them.  Either selling anything at a wholesale rate is stupid and pointless or your original argument was wrong.

 

Here's what you argued

"however the Lab cannot cater to landlords either because once again their number is insignificant as compared to the total number of players."

But the lab can and does cater to landlords with significant holdings, despite them being few in number, and as you now seem to understand, this is not an uncommon practice at all.  Your argument that the lab cannot cater to landlords because they are few in number is wrong. 

[Gavin Hird]

No, it does not have to be by committe model, simply because the licensed product requires a grid to be member of a common name space or the software will not work. 

The common namespace would at a minimum consist of:

• common UUIDs for user agents
• common GUIDs for groups so that group ownership could be preserved across grids
• all assets being registered in a common asset store 

For user agents one could make the architectural change that it is not possible to register alts unless they are parented in a primary. The advantage of this is that it will significantly reduce the scope for fraud by alts as their real indentities will be known, but it will also facilitate a consolidated inventory for alts shared with the primary. This could lead to significant reduction of duplicated inventory that currently must exist in SL's asset store. It also removes the need for alts to re-purchase indentical objects as often happens. 

Further a common currency across grids could be established to promote interaction and cross grid trade. 

I don't see how content theft in such a setup would be much more of an issue than what it is in SecondLife today, simply because the core mechanisms for moving between a sim on a grid, would be be the same as moving to a sim on another grid. In both cases the asset store sends inventory to a server which agains sends it to a client for rendering. The key here is again common asset store/registry for all participating grids. 

it would also be a product with a price tag, so not everyone would set up a server at home as can be done with opensim. 

 

[Sassy Romano]

and how are all those changes going to be arrived at if not by committee?  Unless it's developed by one organisation and licenced to the others (which is what I think you're suggesting LL do) then it's not going to be open and given that the other grids have already gone down a route, there's discussion and meetings and I call that a committee.   The smart thing would have been for LL to have wrapped all this up at the very beginning but that's not where we're at now.

I'll state my concern again, as it stands today, scripts are generally considered to be the most secure asset, once that asset is on someone else's server, the current process to obtain access to that asset is via UUID, knowing the UUID will yield the content.

The IP around scripts would provide deep insight to other products that may be impacted by someone taking this content externally and having an opportunity to develop around it in a dark room.   Imagine the Meeroo scripts being out there full perm.

I agree with you all the "how" it should be done, that's no different from any other central registry however who is going to do this?  I don't see LL rushing to open the doors to competitors for the same reason I don't want my scripts full perm across lots of other grids.

Given that LL so far have shown little interest around any form of linking accounts I just can't see it happening from them.  Also, there's simply no way to force an alt to be linked to a main.  None, none at all.