LL diversifying? What does that mean?

LL CEO Rod Humble

Potentially the most interesting comments to come out of Rod Humble’s presentation at SLCC 2011 were related to the fact that Linden Lab may be diversifying. These started early on when he announced:

“You are going to see Linden Lab working on new products as well as Second Life”.

While he refused to delve into specifics, it has led to speculation that he may be referring to what Hamlet Au refers to as a new “SL Light experience” that will utilise “the web and tablets”.

Hamlet was certainly in a position to ask Rod questions on the matter after the presentation, given he’s at SLCC; and so may have a greater insight than I; certainly, there is no denying Rod indicated that Linden Lab is eyeing-up the tablet marker where Second Life is concerned. However, I cannot help but speculate that Linden Lab is going after something a lot broader than just introducing a “light” version of SL when Rod refers to the growing tablet / mobile market.

Look at his comment, quoted above, for example. It clearly differentiates between Second Life and a product and whatever else Linden Lab has planned. This seems an odd statement to make if whatever is coming down the line is simply aimed at enhancing Second Life’s reach. It’s also a differentiation that came up again during the extensive Q&A session. Here’s what he said:

“The other massive opportunity and massive threat to on-line games and everyone in this room is the rise of tablet and mobile devices; and right now we don’t participate on those devices. So you will see us address for Second Life, but also for at least one new product, the area of tablets in particular and some mobile stuff as well.[my emphasis]

Again, if Linden Lab are simply looking towards opportunities to extend Second Life’s reach, it seems odd that he clearly differentiates between Second Life and the “new products” in this comment.

So what else could he be referring to? Here’s where the speculation begins.

A recurring theme during the 45 minutes Rod was on stage was what I’m going to refer to “social involvement”, so much so that it is hard not to link them with his comments relating “new products”.To bullet-point some of the references:

  • He was at pains to emphasis the importance of people being able to define their own persona on-line and to be able to set their own barriers as to how much they reveal about themselves and how they establish divides or barriers between what the reveal / how they interact with others according to the environment / situation they are in
  • He also emphasised twice that Linden Lab believes that customer privacy is paramount, and that they will not do anything that betrays this
  • A number of his comments were around LL’s perception that people’s habits are changing with regards to Second Life, people are spending less time engaged in-world, but more time engaging socially about Second Life through various mediums – the new web profiles, Twitter, etc.

In this last point, he specifically points out, “By the way, I mentioned that Second Life was growing earlier…there’s a really interesting dynamic as well, is that many of the new users of Second Life are a very, er, very younger demographic…sort-of a mid-twenties, college age. And they also…they are generally spending less time in-world but more time socialising within Second Life social circles…and I think that’s really interesting.” He goes on to note that this is common in other on-line games and suggests that the onus for LL is to enhance this capability, “for our customers”.

Wen profiles: precursor to LL’s move towards wider on-line social involvement?

This would all seem to point towards Linden Lab moving more into the realm on on-line social involvement. It’s something they’ve tried, albeit on a very limited basis through the acquisition of Avatars United a couple of years back, which was ultimately discarded – which is not to say they ever gave up on the idea.

In many respects, it makes sense for the company to move into social involvement in a more premeditated manner, as a) this is clearly a growing market; b) through Second Life, they have been developing capabilities and knowledge ideally suited to the environment (i.e. through my.secondlife.com). What’s more, they are willing to step away from the likes of Facebook and Google+ and uphold the principles of pseudonymity and privacy, which could make such a move attractive to a broad audience.

Of course, it would be ridiculous to suggest that Linden Lab could in any way take-on the likes of Google or Facebook in the broadest sense; and I’m certainly not suggesting that.

But then, they don’t have to. By providing a set of social media tools that enable gamers, Second Life users and others to remain connected, to “meet” and discuss their interests, passions, plans, swap ideas, link-up with others and so on, they could potentially tap into a huge market, and offer them the ability to leverage technology and capability already developed that would not necessarily impact on their focus of “fixing” core issues and services within the Second Life platform itself.

There’s also the matter of diversification and revenue. Hamlet himself (rightly or wrongly, depending upon one’s standpoint) makes much of the current revenue stream enjoyed by Linden Lab (the “sale” of SL “land”) as being somewhat unsustainable – and over time, he may well be right. Ergo, it would make sense for LL to look at other opportunities and markets in which to generate new income. Although precisely how this might be achieved is harder to define, and worthy of a separate debated in and of itself.

It’s going to be interesting to see what is announced in the coming months and, equally, how Second Life users respond to whatever comes out of the Lab – particularly if it is seen as “taking effort away” from supporting Second Life. In this latter regard, assuming the new products are divorced from Second Life, LL will doubtless have a fine balancing act to perform where user happiness is concerned.

Rodvik at SLCC 2011 – The gist

LL CEO Rod Humble

Rod Humble gave a polished, if short-term and purely tactical, overview of Second Life for listeners at SLCC 2011.

His talk came just after lunch in Oakland, and he couldn’t resist making a few light-hearted comments, as he opened the talk by commenting on what people told him they wanted to hear.

“People were…before I was doing the talk, were like, ‘we want big news, give us big news!’ I, ah, don’t have any big news….wait a minute…. We’re shutting everything down! Thank you for all of your service, it’s been great!”

This earned him warm laughter and applause and set the tone for a relaxed 40 minutes, during which he talked about Second Life, Linden Lab and took questions.  Here are the highlights.

  • One of the reasons he was attracted to Second Life is the fact that it is still growing, something which sets it aside from other massive multi-player games. As examples of this growth he cited:
    • An average of 16,000 new users are still signing-up per day
    • There is an increase of total monthly uniques
    • User retention appears to be increasing
  • Second Life has longevity because it is a unique creative platform on both the physical level and the social level; that it engenders a sense of ownership whether you are physically creating something in-world or whether you are creating and cultivating friendships and engaging in social interaction
  • He touched on the identity element and the importance of being able to have the freedom to define our own virtual identity, and to put barriers between the different identities we use in much the same way as we create different personas in real life to deal with different aspects of our lives. He sees SL as being very unique in this when compared to other on-line social mediums (which he defined as “intrusive”) and views it as the correct (“traditional”) stance
  • Clearly stated that “customer privacy will always come first.”
  • Hinted that Linden Lab is diversifying, “You are going to see Linden Lab working on other products as well as Second Life,” (my emphasis). He suggested that the new productions would be related to “shared creative spaces” (a term he is fond of using in relation to Second Life itself), which he believes has a potentially large audience
  • Defined his personal ‘first year’ goal at LL as being to be able to give every family member within Linden Lab a Second Life account, for them to be able to send the account to any “intelligent or above average intelligence computer user” for them to be able to use it to get into Second Life, use it and be grateful, and this has effectively drawn a lot of what has been going on regarding the sign-up process, the initial experience for new users and changes to the Viewer (Basic mode, etc.), and issues such as dealing with lag
  • He touched on the recent cycle of rapid development and roll-out of features, etc., which has been followed by almost immediate nips, tucks, updates and revisions, stating that if a company tries to put something big out to the online community, it is going to break, either “spectacularly” or “elegantly”, but it will break. So he prefers to get small features developed and implemented and then “test, polish, test, polish”
  • The rest of this year will be focused on the “polish”, and he again specifically mentioned customer service (such as quality of service), lag and “bugginess”
  • He indicated that one initiative will be aimed towards griefers and that he hopes to make “life unpleasant for griefers”, although no specifics were given
  • A Linden-made, Linden-curated area in-world will go live in the next couple of months. the aim of this area is to both enable Linden Lab to learn how to make tools aimed at the users – he cited an example of being able to go to a role-play area and not having to worry about HUDs – you just press a permission button and, “everything happens”
  • Premium Accounts will be improved, with new features specifically aimed at adding value “at no extra cost to you.”
  • Towards the end of the year / 2012, LL will have a marketing campaign “of significant investment” to drive traffic into Second Life and hopefully towards SL merchants

This brief presentation was followed by almost 30 minutes of Q&A which included the following:

  • He refused to comment on a number of questions relating to pricing, although did indicate that there would be “no radical” change to current pricing mechanisms in place
  • There will be moves from LL to further protect content creator’s IP rights, although he declined to be drawn on specifics. He also linked this with the question of griefing
  • He addressed hardware issues in two ways:
    • Increasing the avatar count per sim
    • The “threat” of tablets and mobile devices – and he stated that LL will be addressing tablets with Second Life and “at least one new product” as well as doing, “some mobile stuff as well”, as the increasing levels of sales of tablet and mobile devices means that LL “needs to be there some way – and we will”
  • Indicated that SL has a new demographic among users: people in their 20s who are spending less time in-world, but more time socialising via message boards, Twitter, their SL profile feeds, etc. Also that more time is being spent socialising about activities as well as doing the activities, and he indicated that LL will be looking to enhance this
  • He doesn’t see it as LL’s place to define where SL goes in terms of technology development / integration in terms of “making” it a “killer app”, but rather sees LL’s role as taking its lead from its users and customers
  • Acknowledged that Viewer 2 has issues around the UI, etc., and while hoping people recognise efforts that have been made to improve it this year, further work is required BUT at the same time, too much new technology is embedded in the Viewer to “just give up on it” Also indicated that “at some point” he would like to see:
    • Removal of the Sidebar from the Viewer
    • In-world communications channels for merchants
    • New creativity tools for in-world creation
    • HOWEVER – emphasis for the present will remain on fixing broader issues
  • Indicated (again) that LL’s “top line” is over $75 million, and that they generate cash every month and are “very profitable”
  • SL is one of the most popular games in Russia and the most popular on-line game in Thailand – both as a result of localisation efforts!