Applications and Tools, Business in Virtual Worlds, Second Life

Setting the Stage for Mesh Imports: Second Life, XStreet Listings and the World to Come

Linden Lab recently announced policy changes on its popular XStreet commerce site in an effort to make the shopping experience more, um, friendly. The Lab cited extensive consultations in launching a “plan that all of our residents have helped us build.” But not just the Residents held sway in the policy decision: larger considerations around how Linden Lab will handle mesh imports may have played a key role, and in this light the changes to XStreet have created the framework for future tiered pricing related to the value and type of goods and, perhaps, a long-awaited change to the premium/basic account categories.

XStreet is the Web-based shopping site for Second Life. Residents can browse virtual goods, purchase them using Lindens, and have them delivered in-world. One of the complaints about XStreet has been the gaming of the system through the posting of free items and the challenge of creating a level playing field for goods.

For the shopper a search for, say, ‘chairs’ can result in a long list of free chairs, which are posted either as a form of ‘loss-leader’ to promote a specific retailer’s goods or are simply free because of the ubiquity of certain types of content in Second Life. With no money made towards the maintenance of XStreet or the lining of Linden Lab’s pockets through commissions, less likelihood of someone with non-free items ‘making bank’ amongst a plethora of freebies, and what some argue is a degraded experience for the shopper (and what others would argue is degraded because of the interface and search function rather than the presence of freebies) the Lab announced that they would solicit feedback and figure out what to do about it.

Sinks and Shelves
In a world in which there are no ‘sinks’ for virtual goods, content eventually becomes commodity, it becomes ubiquitous, and value eventually approaches zero. In game environments, sinks take content and goods OUT of the economy: your sword needs repairs, or your armor breaks. But in Second Life, content lives forever (or is lost in inventory, or just sort of fades away into dead accounts which are forms of a sink, but not to the same degree as a game environment).

This places a challenge on content creators and shifts the value curve in two directions: to create experiences and in-world brands as the focus of value accrual, and through the provision of new TOOLS for content creation to spark new innovations at higher price points.

The addition of sculptys, for example, made yesterday’s jeans obsolete, and suddenly every piece of clothing came with sculpted attachments like leg cuffs, collars or hoodies. Eventually these too become ubiquitous of course, and so there’s a constant churn of new tools and techniques and new approaches to creating recognizable and trusted brands, experiences, and communities.

There’s a philosophical debate around ‘freebies’ although I fail to see how it applies to XStreet. On one side of the debate is the thought that the lack of scarcity in a virtual economy like Second Life means that freebies can’t be avoided – that the trend towards ubiquity means that EVERYTHING will eventually be free, and that this is how you arrive at a rich environment in which everyone can participate, socialize and express themselves.

From a more mercenary point of view, freebies are often considered to be like samples – think of those little perfume capsules you get at the mall. It may be free, but it’s an interaction with a brand, and maybe by getting a whiff of the brand you’ll go back for the stuff that costs money.

It’s hard to take issue with either of these arguments but only insofar as someone has access to shelf space. To take the perfume example, a store can elect to cover the overhead, no matter HOW seemingly small, to facilitate that tiny transaction – the handing out of a free sample. But hey, they paid for the lights, the staff, the advertising that got you in the store in the first place. And for someone who has rented an in-world piece of land and set up shop and spent the time getting people there – well, more power to them.

If giving out stuff for free somehow helps you cover tier, or you even do it at a loss….it may be irritating, it may lower the competitive playing field, but that’s the way business works, and as I said above the expertise in content development moves on to newer tools or to expertise in community development, search optimization or branding.

There are all kinds of ways the Lab could have devised its policy about freebies on XStreet, but at a minimal level what this does is introduce a factor which says: “if you’re going to use up some shelf space, you need to pitch in for the tier” just as a grocery store would stop carrying items that don’t sell, or would rent the space to the company making the product – a common enough practice where Tide detergent buys retail shelf space by the inch.

The problem with the Lab’s decision isn’t in the mechanics (although I’ll be the first to agree there are other ways they could have achieved the same end) it’s in the rather disingenuous notion that it was motivated primarily by improving the shopping experience itself.

Content Protection and Identity
But at the same time as the Lab was sorting out the ‘freebie’ policy its been hard at work on two other things: content protection and mesh imports.

While there’s still significant anxiety over the ease with which people can ‘rip’ content, especially via third-party viewers, I’ve actually been finding myself fairly shocked at how aggressive the Lab is becoming in setting up a new regime for content protection. Has it been done fast enough? No. Is it complete? No. And has the communication been thorough and reassuring? Um…has it ever been?

But the Lab has made moves that a year or two ago would have seemed almost draconian against the background chatter about interoperability and open source and “all information wants to be free” (with lip service paid to content protection). Whether they’ll be able to get the genie back in the bottle is debatable, but give this another six months to play out and my bet is that the combined changes to policy, enforcement and code will result in a content protection regime that is radically different than it was a year or so ago.

One of the many things the Lab is considering is ‘fingerprinting’ content – something that has been alluded to by Mark Kingdon and even Philip in interviews, and which I’ve confirmed with several sources at the Lab is at least on the table, although they’re otherwise kind of mum about it and I’ve yet to confirm whether they’ve written any code. Now, I won’t get into all the details because as a stand-alone protection mechanism it has flaws, but as another tool in the arsenal it could contribute to better ways to track and remove copied content.

But this feature, and others in their content protection road map, relies in part on the connection of content to accounts and, to one degree or another, on the connection of accounts to identity (or at the very least some kind of verification or track-back info). The ‘trusted sellers’ program on XStreet and, at the far extreme, the Gold Solution Provider program for Second Life Enterprise, shift the Lab in the direction of linking content to registration/identity data, and thus towards being able to track who makes stuff (or at least who uploads it) and who to hold accountable for content violations.

Mesh Imports and the Commercial Dynamic
So the second thing the Lab is working on is mesh imports.

Frankly, I’ve been deeply skeptical about whether mesh imports are actually coming. But I’ve been told with certainty by those who should know that mesh imports are not some kind of optional/possible/wouldn’t it be nice enhancement, but that they’re coming, and that they’re probably coming sooner than we think.

The challenge that the Lab is struggling with, however, is how to sort out the policy issues in addition to fine-tuning the tech that will allow them in the first place. The ability to create content using industry-standard 3D modeling tools like Maya, 3DS, Blender or even Google’s Sketch-Up and to pull them into Second Life using the Collada 3D format has, on its own, technical challenges. But the policy implications are probably more staggering.

If content protection in Second Life itself is a problem, what do you do if people start buying items with a single-use license off of Renderosity, say, and then start selling them in-world? Now your DRM and copyright violation issues start taking on a new dimension, one which must have the legal team at the Lab puzzling out global regulations and laws while the rest of them think through the possibility that mesh imports unleash a flood of new content from Google Warehouse or wherever.

The problem is how to allow mesh imports while recognizing and dealing with the ‘external’ content protection issues and the impact on the in-world ‘prim economy’ through sudden access to entirely new sources of content which already exists in external warehouses, Web sites and on other platforms.

The solutions will rest on a bunch of things, and will include sacrifices (if you didn’t believe Philip at SLCC when he said that ‘change is coming and you may not like it’ then, well, believe it), but amongst them will very likely be the need to link mesh content to registration/verification information, and a new upload and listing structure which will likely include both variable fees and variable rights for different account types. While the policies are still being developed, it’s fairly clear that the Lab will likely include, or will have at least seriously looked at: a) charging more for mesh imports than, say, a simple texture b) restricting the ability to do so to verified accounts and, possibly, c) only allowing premium accounts to do so.

Mesh imports, in fact, give the Lab the excuse they need to re-open the premium/basic account structure, something which is difficult to revamp without having some new goodies to throw into the mix. Mesh imports could be one of a new ‘basket’ of things that will allow the Lab to reposition premium accounts as having an actual value, instead of being pegged to the ability to, um, get service or to own a parcel on Mainland.

I’d anticipate that some new Web-side features would be thrown into the mix and while we wait for the Second Life “Develop” microsite to get itself sorted out (the Lab plans to launch a portal directed to content creators much like its “Work” site, and I suspect it will be rolled out to coincide with plans around mesh imports), premium accounts may work at both a content-creator level as well as some kind of social media/Web site/preferred shopper type level for casual users.

So against the backdrop of the Lab’s attempt to get the content protection genie back in the bottle, to sort out the issues with mesh imports (including the IP issues that will arise and the impact they’ll have on the current virtual goods economy), the decisions related to XStreet and this week’s move to partner with Dragonfish for payment processing (and account verification) look more like stakes in the ground for an approach to managing the economy in which it isn’t just about what you’re selling and whether it’s free, but about who you are, what type of account you have, and where that content came from in the first place.


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