Business in Virtual Worlds, Second Life

Rezzable Parses Second Life Stats: It’s the Economy Stupid!

Second Life’s economy is stalled because of poor integration and retention of newbies, Rezzable proposes.

Their economic analysis is really quite useful, as is their conclusion:

In fact my guess is that the Emmy award will be a marker for SL…a milestone for when things got really tough. A massive, complex software/hardware environment, more difficult management issues and no doubt some serious competitors coming to this space. And really if a new virtual world platform can only get 400,000 engaged users…well the new players would be equal with LL pretty fast. And that could happen with 3 months with a well organized, well funding marketing plan on an inferior platform.

It’s an interesting post, and reconfirms the humming noise and observations I’ve made previously. In general, I’ve proposed that the issues with Second Life aren’t related to poor grid performance but to retention rates for the ‘casual’ newcomer to the environment. Grid stability isn’t a reason for people not to sign up - I didn’t check on the percentage downtime before I logged into SL, and a few crashes and TP freezes didn’t have me running for the exits. Grid stability became an issue when I started to use the platform seriously.

Grid stability might be one factor considered by businesses wanting to enter SL, but they’re just as likely to evaluate other factors as well: security, brand protection, communication mechanisms, ability to measure ROI, concurrency, and service/support.

If major brands don’t currently find SL as attractive as they once did, that leaves corporations who see it as a vehicle for collaboration rather than branding, educational institutes who are attracted by how easy it is to get up and running (with accolades to the NMC of course), and the creative class who are using SL for everything from immersive virtuality to art to getting laid.

Linden’s stated goal is to connect everyone to virtual worlds. This implies therefore that limited corporate uses and education are just one slice, or foundation, upon which needs to be built an environment that attracts, stimulates, and retains ‘casual’ participants. People who arrive in SL without a specific intention other than curiosity. The attrition rates that Rezzable points out re worrying indeed.

With all the focus on whether or not SL REALLY is getting more stable, and all the grid-sphere babble about whether HAVOK is a key to greater stability or one part of the puzzle, attention is taken from the real performance indicators:

- How many people who join SL are still there an hour, a day, a month later.
- How well do the social functions of SL facilitate creating, managing, and participating in communities.
- How well does the platform and tool sets aid in development within SL as a creative medium, attracting ever widening partners and participants.

To solve these things, LL would need to focus on:

- Vastly improved log-in and orientation experiences, and not simply relying on corporate welcome centers set up primarily because they were fed-up with the current system. These orientation experiences need to include a proper process for mentoring. Linden Labs should spend significant money on newbies in the first few weeks - e-mails, free guides, invitations to seminars, mentoring, and perhaps some freebies and enticements to get them to stay engaged.

- Vastly improving the social tools within SL. There’s been a lot of talk about using the JIRA to get the group limit raised, but frankly the issue is so much deeper and requires much more creativity than the group limit. SL social functions should probably include ability to have interoperability with the major chat programs (MSN, AOL, Yahoo Messenger), better group management, global and regional chat channels with opt-ins and filters to avoid the sort of vendor spam you hear in places like WoW, and the ability to sort, group and tag your friend’s list in a more useful way.

- The creative class beyond the current circle of brilliant SL residents will never expand significantly until true interoperability is available. The architects and designers who use Autodesk products would migrate in a minute to platforms that offered deep interoperability if it also included a limited number of the features of SL. On the coding side, LSL needs to be abandoned in favor of Mono. And overall, the platform needs to enable the same production work flow as the gaming studios use. The launch of Havok4 doesn’t do anything to address the fact that a game or virtual world development studio needs to learn and set-up a whole new production stream to handle SL. The virtual/game development stream is such a highly developed discipline that SL should be learning from it and integrating elements of it into the platform, or risk being left behind by platforms that understand.

There are economic and social implications to the above. Maybe there’s a fear that if Linden upsets the balance of current policy and the restrictions and opportunities built into the current code set that there would be defections from the current user base. As much as I hate to say it, however, it’s perhaps even more important now than ever to switch the balance to worrying more about newbies than the feelings of current residents.

Gaming platforms have known this for years: after an initial point, the early adopters need to be abandoned in favour of an expanded pool of users. Contentious as this is, I also think it can be done in a more productive way that finds favour on all sides because increased traffic, usage, spending, and retention can only benefit those who understand the future of the medium and who will find that future either on SL itself, or in the virtual worlds to come.

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