Linden Lab announces Tilia partners with Unity “to power virtual economies”

Linden Lab’s Tilia services are now available for Unity developers via the Unity Asset Store

On Wednesday, January 26th, 2022, Linden Lab announced that its subsidiary company, Tilia Inc., the licensed money transmitter and end-to-end payments platform, has reached an agreement with Unity for the Tilia’s API and services to be made available to Unity developers as an integrated end-to-end payment solution.

Referring to the agreement as a partnership, the announcement from Linden Lab notes that Unity has vetted the Tilia API to ensure it is suitable and optimised for the latest version of the Unity Editor, and developers building in Unity can now access Tilia’s API through the Unity Asset Store to enable in-game and in-world economies, allowing their users to make and receive payments, and even exchange in-game tokens for real money.

This is potentially the biggest partnership deal Tilia has thus far made (customers until now being reported as Second Life, Sansar and Upland – although ” NFT marketplaces” are also listed as being partners), potentially opening Tilia’s three services – TiliaDirect (in-world payment processing), TiliaWallet (capabilities for “stored value” for assets & enables user-to-user transactions) and TiliaPay (enables the redemption of tokens for fiat (real) money, allowing players to cash out) – to Unity’s entire community of developers.

Many of today’s top games and virtual worlds are built using the powerful Unity real-time 3D development platform and increasingly developers want to incorporate significant virtual economy elements that allow for in-game or in-world user transactions. We are proud to bring an end-to-end payment solution available to the Unity Asset Store, and we look forward to seeing how Unity developers will incorporate Tilia.

Brad Oberwager, Executive Chairman of Linden Research, Inc.

It is perhaps worthwhile noting that this announcement does not in any way mean that Unity is buying or otherwise investing in Linden Lab / Second Life or that they are about to do so (a question I have already been asked). This is about leveraging the power of Tilia Inc., and the services it provides to deliver them to Unity developers who wish to utilise them and, in doing so, provide further revenue streams back to Tilia / Linden Lab.

For further context, please refer to the Press Release from Linden Lab in full.

In the press: Second Life, Tilia Inc & the Metaverse

Friday, September 3rd saw an article by VentureBeat’s Dean Takahashi – no stranger to Linden Lab, Second Life and LL – doing the rounds, entitled Will the metaverse bring the second coming of Second Life? While I personally find the term “the metaverse” to be one of the must frequently over-hyped / over-used terms in recent years, Takahashi’s article makes for an interesting read on a number of levels.

The first is that VentureBeat is a well-regarded tech news and events on-line magazine that includes the supplement GamesBeat that focuses on the world of computer, mobile and video games. Between them, they draw down some 6 million unique visitors a month and 12 million page views. That’s potentially a lot of exposure for articles within the publication, and Takahashi’s article was a headline piece for GamesBeat’s front page (although it has since slipped down the ranking somewhat).

Dean Takahashi, lead writer, GamesBeat

The initial part of the article is something of a re-tread of Second Life’s history for those of us familiar with the platform. While the ground covered may well be familiar (and the quoted numbers possibly subject to quibbling in some quarters), this re-treading nevertheless frames SL for those not familiar with it or were unaware it is still around and doing moderately well for itself.

This part of the article also helps frame Linden Lab as an “elder statesman” (so to speak) of the user-generated content frontier, having long since tackled many of the issues and hurdles that those attempting to now define and provide “the metaverse” are just starting to tackle. All of which makes for good reading and certainly helps carry the message that in this day of Facebook, Microsoft, et al trying to foist their visions of what “the metaverse” should be, Linden Lab has the right to say, “been there, done that – and still doing it!”.

However, it’s the latter part of the article that drew my focus, with its referencing of both Tilia and recent moves on the part of the Lab to develop “partnerships” to try to “grow” SL. Both of these are also parts of the article I’ve witnessed as causing some negative gnashing of teeth in some circles, which has also framed my thinking in writing this piece.

In particular, Takahashi’s revelation that Tilia has cost Linden Lab $30 million has raised eyebrows and some grumblings about what this might mean for Second Life’s future.

via the Tilia website

This needs a little context. While LL has spent what seems like a huge amount of money on Tilia, as Takahashi notes, it has been over a 7-year period, starting not long after Ebbe Altberg joined Linden Lab as CEO, and the initial expenditure was required; as Takahashi goes on to point out, for a company like LL to be able to make pay-outs to users (and generally handle fiat money on behalf of its users) it must comply with a range of US federal, state, and international regulations.

In terms of US requirements, this has meant LL had to become a licensed money transmitter at both the federal and state levels – a move more easily achieved by ring-fencing the services that handle all payment processing / transfer into an entity of their own. Had it not do so, then LL would have hit a wall in its ability to make pay-outs. Beyond this, Tilia Pay’s regulated services benefit Second Life in a number of other ways (allowing the use of credit / debit cards within services such as the Marketplace through to assisting with overall user account management and security, for example).

Obviously given a large amount has been sunk into Tilia, it is natural for the Lab’s new owners to want to leverage this expenditure. But this doesn’t mean Tilia and Second Life are, or will become, an “either / or” proposition for the Lab’s future direction.

Rather if Tilia can be made a success, it would mean that Linden Lab – after more than a decade of trying – has gained a second revenue stream it can utilise to help it remain viable moving into the future. Further, it’s long been the philosophy at LL that as long as SL has users enough to ensure it remains a healthy generator of revenue / income, there is little reason to shut it down / sell it, and I’d question this philosophy being radically altered by the success of a second product within the company’s portfolio.

At the end of the piece, Takahashi brings in the subject of Zenescope, and LL’s focus on “partner collaborations”. This appears to be part of what has been referred to as the drive to grow the user base.

It’s not necessarily a bad idea – working with organisations that have established audiences of their own and which could leverage Second Life to add a new dimension of engagement for those audiences. However, it is one that has some significant hurdles to clear: attractions have to be built-out, events need to be organised and run at a tempo that keeps an incoming audience engaged and coming back at a reasonable cadence to make the effort worthwhile, and their must be a path to a practical return on the investment made (time, effort money), and so on; to say nothing of getting people into the experience and comfortable with the viewer UI.

Zenescope Metaverse a new partnership endeavour involving Linden Lab opened in August 2021, but failed to capture the imagination for me See: The Zenescope Metaverse In Second Life

There’s also the question that, even if successful in bringing an audience to Second Life, just how well such partnerships might actually convert members of the audience into engaged Second Life users – something that will be an important measure of success by the current user base, if not necessarily to LL or their partners, who will likely use other criteria to measure the success of these ventures.

In mentioning such partnerships, Takahashi’s piece open the door to broader thinking around where LL might potentially go with this idea in the wake of of the move to AWS.

For example, it’s already been hinted that at some point, LL might look to offer an “on-demand” product. Doing so could potentially be advantageous to potential partners, in they it present a way for them to offer their users experiences in Second Life at a more advantageous price that a 24/7 product that might only be used once or twice a week. Beyond this, there is the question of whether LL might consider entirely private grids for dedicated partners / clients / markets, and even white-labelling such a capability if they did so (thus essentially providing a Second Life Enterprise style of product in a manner and cost that would be far more appealing that that endeavour).

However, given these thoughts do go beyond the article, I’ll put them to one side for now, and just say that if you haven’t already done so, I do recommend giving Will the metaverse bring the second coming of Second Life? a read.

A further look at Tilia and their new client, Upland

via Linden Lab / Tilia

In preparing my piece on Tilia and the changes coming to US dollar transactions related to Second Life (see: Tilia Pay to handle all Second Life USD-related transactions), I had the opportunity to take a look at the updated website for Tilia Inc., Linden Lab’s wholly owned subsidiary.

For those who may not be familiar with it, Tilia Inc, was established by Linden Lab in 2014, and focused on payments and the compliance work associated with operating virtual economies, including Second Life and Sansar. And now, as shown within the updated Tilia website, it is to provide its services to its first client not to have a direct link to Linden Lab, the property trading game Upland.

For those unfamiliar with Upland (I was until I looked them up), available via browsers and on Android and iOS, it is a trading game in which players buy, develop, sell and / or trade virtual properties that are based on real-world addresses.

The Upland… mascot(?)

Currently focused on the city of San Francisco, Upland is built on the EOS blockchain protocol. It entered a closed beta in June 2019, which ran through until the end of that year. During that period, the company added their own virtual currency – UPX – in August of that year, which users could collect as a reward and in return for collecting properties.

At the start of 2020, the game entered an open beta available to any wishing to play it, and added the ability for users to purchase UPX using selected cryptocurrencies.

The partnership with Tilia means that from later in 2020, Upland will be adding the ability for users to trade their virtual properties (and, I understand, goods associated with those properties) for fiat money (this is, US dollar values), through the Upland marketplace and to cash-out those US dollars, with Tilia Pay being the mechanism by which they do so.

In add the use of fiat money is seen as providing a further layer of value to the game, as Upland’s co-founder Dirk Lueth explained to VentureBeat’s Dean Takahashi in an article that went to press while I was drafting this piece:

By using fiat currency, Upland can stay in compliance with money transmission regulations in the U.S. And in this way, players can actually own the digital goods and properties they buy in Upland … If the game ever shuts down, the players will theoretically be able to take their property and move it elsewhere, in contrast to other games where players don’t really own the objects that they build or trade.

It is Tilia’s ability to provide services fully in compliance with U.S. regulatory requirements, including anti-money laundering, sanctions monitoring, and fraud prevention that could well make it a popular potential partner among companies offering their users to buy / sell virtual goods, as it provides said companies with the ability for their users (and themselves ) to profit in real terms from such virtual transactions.

I’d actually first speculated on the potential for Tilia being used by companies other than the Lab itself back in November 2015. It was was a subject I returned to again in July 2019, again referencing comments made to me in 2015 by the Lab’s former Director of Global Communications, Peter Gray:

Peter’s [2015] statement struck me as interesting in that its structure seemed to suggest that supporting Second Life and Sansar (then still “Project Sansar”) was part of, but also separate to, the overall goal of presenting Tilia as an entity focused on providing a robust payments and compliance system for operating (and managing) virtual economies to third parties.

– This blog, July 2019

More recently, Lab CEO Ebbe Altberg made it clear we would be seeing a growing client list for Tilia at a couple of public events, include the 2020 VWBPE Above The Book session in commenting about Sansar’s future, he also referenced Tilia.

We’re partners with them [Wookey Project Corp] because they’re using Tilia for payments / payouts just like Second Life is doing, and Tilia will have more and more customers over time. We have several of them lined up to be integrated to get those payment services.

– Ebbe Altberg, March 2020

As such, it will be interesting to see who else opts to leverage Tilia / Tilia Pay in support of their platform / game / product in the coming months / year.

In terms of Tilia itself, the website offers a view of the management team – perhaps the first since Vick Forcella helped me with digging into the early days of the company as a Linden Lab subsidiary in November 2015.  Back then, Tilia’s management team was pretty broad, encompassing multiple members of the Lab’s management team, and a small board of three.

Today, the management team is down to three people – Aston Waldman (the Lab’s CFO), Emily Stonehouse (the Lab’s Chief Compliance Officer) and Ray Johnson (the Lab’s VP of Engineering). Aston Waldman is also a member of Tilia’s board, alongside of Kelly Conway (Linden Lab’s former General Council), and fintech compliance and product leader Ben Duranske (the only “non-Linden”, so to speak).

The Tilia Management team and board. Top: Aston Waldman (Tilia CEO and board member as well as Linden Lab’s CFO); Emily Stonehouse (Chief Compliance Officer at Tilia Inc and LL); Ray Johnson (VP Engineering for LL and Tilia) – the management team. Bottom: board members Kelly Conway and Ben Duranske

Also included on the site are a couple of press articles that cover the threat of money laundering through on-line games, helping to further explain the value of services such as those provided by Tilia, and both of which make for interesting reading.

I’ll continue to report on Tilia as news becomes available.

Related Links

 

Second Life: Tilia Pay to handle all USD-related transactions

via Linden Lab

In July 2019, Tilia Incorporated, a wholly owned subsidiary of Linden Lab, officially took over the management of activities such as processing credit out of second Life (that is, withdrawing funds as US dollar balances the platform), and and US dollar balances held by Second Life users (see: Tilia has officially launched operations with Second Life*, August 2019).

Now, in an expansion of Tilia’s role with Second Life, Linden Lab has announced that as from Monday, May 26th, Tilia Inc, via its Tilia Pay service, will be managing all US dollar transactions related to Second Life, including those involving conversion of funds to other currencies.

This means that, as from Monday, May 26th, anyone:

  • Making a payment through one of their indicated payment methods – credit card, debit card, PayPal, or Skrill (as indicated on their Second Life account), such as purchasing Linden dollars
  • Adding a new payment method to their Second Life account

Will be consenting to the Tilia Terms of Service and Privacy Policy.

The change is being driven to both comply with regulatory requirements across a number of U.S. states and to leverage he enhanced fraud and money laundering safeguards that Tilia Pay provides.

The important things to note here are:

  • All Second Life users should be familiar with the Tilia Terms of Service (and Not just those who have either a US dollar balance associated with their account and / or cash-out money from SL).
  • Users will not be explicitly asked to confirm their agreement with the Tilia ToS / Privacy Policy. Rather, when paying with a payment method (e.g. credit card) or adding a new payment method to an account, a users will see text stating that by proceeding with the transaction, they are agreeing to both the ToS and Privacy Policy.
  • This move does not:
    • Introduce any new fees.
    • Require users to submit any additional information to Tilia Incorporated or Linden Lab.
    • Change how L$ transactions are conducted in the Viewer or in the Marketplace.

Readers are asked to read the Lab’s official blog post on the change for further information relating to it. In addition, questions or concerns should be directed to the forum thread on the matter – questions cannot be officially answered through this blog.

Related Links

Sansar’s sale and Tilia Inc: Ebbe Altberg reveals more on both

Speaking at the Above the Book session at the 2020 Virtual Worlds Brest Practices in Education conference on March 26th, and again during the Lab Gab episode 19 segment that aired on Friday, March 27th, Linden Lab CEO Ebbe Altberg revealed more about the about the sale of Sansar and the future of that platform. Also during the VWBPE session, he revealed something of the future path for Tilia Inc, the Lab’s subsidiary company.

The following is an amalgam of his comments during both sessions, complete with a quotes, audio extracts from the VWBPE Above the Book session, references to source material and supporting links.

Sansar’s Sale

Summary

The decision to sell Sansar came, at least in part, from the recognition that as a platform, it lay at a very different stage of its evolution compared to Second Life, requiring different investment and resourcing¹.

With the decision made, the Sansar team were apparently given the freedom to attempt to raise money / seek interested parties in order to keep the platform going (hence, perhaps, Ebbe Altberg’s February 12th comment that the former Sansar team were involved in discussions concerning the platform’s future – see the quote in Sansar: lay-offs, rumours, and confusion, February 12th, 2020)².

As it is, with the sale of Sansar, some 30 members of the team have (so far?) received offers to join Wookey Project Corp, and as of the March 27th Lab Gab session, “a bunch of them” are back to work¹. In support of this, I noted in a recent blog post that Sansar’s Community Manager, Galileo, appears to already be part of the Wookey Sansar team, having posted the Sansar blog post referenced below. Further, both Sheri Bryant and Julia Munck, formerly Sansar’s General Manager and Sansar’s VP of Product respectively at Linden Lab, have departed the company – presumably to join Wookey Project Corp.

It appears that the focus for the platform will potentially remain on it being a platform for large scale virtual events in the music / entertainment sectors, and that both desktop and VR support will be continued – although obviously, strategy and direction are now the remit of Sansar’s new owners.

Linden Lab will remain a “partner”, inasmuch as Tilia will continue to be used for Sanasr Dollar transactions and fiat money payouts (see more on Tilia below)¹ ².

Ebbe’s Comments – VWBPE Above the Book

To make the long story short about Sansar, we at Linden Lab decided to sell it and to give the team the chance to go raise funds and go it alone. I think it’s easier for them to go raise money as a separate stand-alone company rather than as a part of Linden Lab. Second Life is a very established, profitable, product and we kind-of had a start-up inside of an established, profitable company. And it was actually easier for them, I think, to raise money as a standalone, rather than as a part of Linden Lab.

So … the staff that worked on Sansar are all getting offers by the new entity to come back and start working on Sansar again, and I think they’ve started this week, so I’m super happy that the product and the technology and the team all get a chance to continue … and it makes it easier for Linden Lab and Sansar to both succeed, I think, going forward. I’m happy for the way things ended up in the end.

References

  1. Lab Gab – 0:40-3:00.
  2. VWBPE 2020 Above the Book – 49:55-51:47.

Additional Links

Tilia Comments

We are all likely familiar with Tilia Inc., Linden Lab’s subsidiary that handles all micro-transactions and payments /payouts related to Linden Dollars and Sansar Dollars, and which manages the Lab’s compliance with regulations relating to its role as a Money Transmitter / Money Services Business (MSB).

Tilia officially launched on Thursday August 1st, 2019, having been formally introduced to SL users in July 2019 – although as I noted at the time, SL and Sansar users may have had some awareness of its existence as the Tilia Inc., logo had been on both the SL and Sansar web pages related to L$ and S$ account purchases and Sansar account management for some time. For my part, I’d been speculating about the company since November 2015, and did so again in July 2019, when I noted that Tilia appeared to be geared towards providing its services to other companies.

I first ruminated on Tilia being a means for Linden Lab to offer virtual economy solutions in July 2019, as a result of the (fairly obvious!) clue on the Tilia home page

Whilst speaking at the VWBPE Above the Book event, Ebbe indicated that with the sale of Sansar, Wookey Project Corp is effectively Linden Lab’s first customer for Tilia’s services, as the latter will continue to provide payment / payout capabilities for those using Sansar and the Sansar Dollar.

In addition, he also indicated more customers for Tilia are on the way:

We’re partners with them [Wookey Project Corp] because they’re using Tilia for payments / payouts just like Second Life is doing, and Tilia will have more and more customers over time. We have several of them lined-up to be integrated to get those payment services.

No specific details on which companies are planning to use  Tilia, I’ll hopefully have more as they are announced.

Tilia has officially launched operations with Second Life*

via Linden Lab

Tilia Inc, the a wholly-owned subsidiary of Linden Lab formed in 2014 and focused on payments and the compliance work associated with operating virtual economies, including Second Life and Sansar, officially commenced operations in respect of Second Life on Thursday August 1st, 2019.

Linden Lab reminded users of this via an official blog post, Tilia Officially Begins Operations Today in Second Life.

In my summary of the Tilia Town Hall meeting of Friday, July 12th, I attempted to précis the impact of the changes and how they affect people with a simple set of notes. I’m reproducing that table below, updated with information from the Lab’s August 1st blog post, in what I hope is an easy-to-follow guide.

How Do the Tilia Changes Affect YOU?

+++ If you have a US dollar balance associated with your Second Life account +++

You are required to accept the Tilia Terms of Service on or before October 31st, 2019.

If you do not accept the Tilia Terms of Service by October 31st, 2019 you  will not be able to utilise your USD balance or request a process credit until such time as you do accept the Tilia TOS.

+++ If you add a US Dollar balance to your Second Life account AFTER October 31st, 2019 +++

You will required to accept the Tilia Terms of Service in order to utilise that balance. 

+++ In Addition +++

If you wish to credit process all or any part of a US dollar balance (that is, transfer it out of Second Life to PayPal or Skrill or another supported method), and have not already provided personal information to Linden Lab you will be required to submit said information.

To check whether Tilia has the required information on file in order for you to be able to process credit, please refer to: Tilia: how to ensure your process credit information is on file.

+++ If you do not have a US dollar balance associated with your Second Life account +++

You do not have to consent to the Tilia Terms of Service
(unless you subsequently wish to make use of a US dollar balance).

Users should also read the Tilia Privacy Policy.

With reference to non-acceptance of the Tilia Terms of Service by those with US dollar balances associated with their Second Life account after October 31st 2019:

  • They will still be able to log-in to Second Life.
  • They will still be able to use any payment method they have on file to pay for services (e.g. purchase Linden Dollars, pay Premium membership or tier).
  • It is only their US dollar balance that they will be unable to utilise.

Related Information

Via Linden Lab

Tilia Related Articles, This Blog

* Note: I actually held off blogging on this on August 1st as there was some ambiguity in the original wording of the Lab’s blog post which might have been taken to mean that user not accepting the Tilia Terms of Service by October 31st, 2019 would lose all access to their US dollar balances in perpetuity. As a result of discussions with the Lab, the blog post was revised on August 2nd to clarify the point that users will be unable to utilise their US dollar balances at October 31st until they accept the Tilia Terms of Service.