When the Metaverse Roadmap was released last year, people were excited. For the first time in history, several different technologies were planned out for the next 10-20 years, and their convergence — desired, or undesired — laid out and discussed openly, surveys were made, presentations were given, and a lot of documentation was produced. The Metaverse Roadmap is not a “prophet’s tool”. It sort of gave directions and guidelines; it tried to “define” what people’s expectations of a “metaverse” should look like, and how to slowly proceed to implement it. Although the Roadmap could and was criticised — for instance, it appealed to people’s participation on surveys; it extracted information from existing technologies; but it didn’t plan to implement anything — it was better than the alternative: having no information on what a “metaverse” should look like.

During Virtual World 2008, what suddenly happened was that the Metaverse went through an “identity crisis”, as Hiro Pendragon so aptly named it. Put into other words: apparently, the industry is not aligned with what the “Metaverse” is supposed to be. They have forked and gone different roads.
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Back in 2005, a group of residents were a bit tired about Second Life®’s homepage. It advertised Second Life as a game and was clearly targeted to the market of young creative geeks. Second Life was a MMOG back then, and Linden Lab® did not do much to make people think otherwise. But even then, it was quite clear that SL was being used for far different things — like it is today.

This group had a surprising proposal to Linden Lab. Since the world was all created by SL’s residents, why shouldn’t the homepage for “Our World” not be created by us, too? At least, we suggested to launch a second website for SL — one addressing people interested in the business and social aspects of SL, not the youngsters. The major reasoning, of course, was that SL was not captivating many users in the 18-25 range — even then, the average resident was much older than that — and clearly LL was targeting the wrong people with their website.

A lot of groups, organisations, and companies never even linked to SL’s main webpage when talking about Second Life as a technology product allowing innovative uses. They preferred to use their own websites to talk as Second Life as they saw it being used. But none were “official”. (more…)

I usually stay away from the more tough discussions on the land speculation in the Second Life® world. The major reason for that is truly believing that land, in Second Life, is a pretty good example of a free market, where demand and supply are two key factors, but the ability to set your own price and reap a profit due to your selling skills and ability to manipulate the market is way more important. This is the good, old, capitalist free market at play. And, from my point of view, this is exactly how it should be.

Yesterday morning I got to attend a 2-day international conference on Venture Capital, where I happened to be one of the very minor speakers on pitching Second Life as a valid investment opportunity, but being realistic about its advantages and pitfalls. The audience were all veteran businesspersons, I would not be able to get away making promises — I would need to present statistics, metrics, and how to get a return on investment. I believe I made a serious effort to explain that any business in Second Life is risky — and that anyone claiming otherwise is simply a fool, an ignorant, or a plain liar.

Of course I had seen the recent announcement on Linden Lab®’s plan to drop the cost of entry for new islands — both on the auctions and for private islands. I was so glad! Finally, nobody could complain about a decrease on the pricing. Everybody wishing to buy an island now to create a new project in the Second Life environment, would be able to do so at a much reduced investment. These were good news!

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[Sorry everybody, but this was (perhaps not obviously!) my April Fool's joke! — Gwyn]

Some of you might have heard my rants about the bad service provided by the ever-so-popular PayPal, to the extent that I start to believe some of these hate sites. After going through cancellation of my account, losing some money in a few transactions (actually, buying L$ on the LindeX), my frustration with how PayPal works has reached the bottom limit. Sure, it’s useful; sure, it’s used by 150 million users around the world in over a hundred countries; but isn’t there anything better?

I’ve tried several “payment gateways” (I’m still waiting for Google’s own system to be available in my country; seems that right now, only US, Canadian, and UK citizens can use it to provide services, although you can pay from any country) over the past few years, but still, I’m not happy.

I’ve even looked a bit on how hard (and expensive) such a “payment gateway” would need to be. Allegedly, in the US, you can start your own bank with just US$15,000 and half a ton of bureaucracy. It might be even simpler in other countries. Payment gateways are also not technically “banks” (they don’t pay interest on money deposited there), but they are also heavily regulated. And finally, they also require a good user base to be useful — after all, nobody will “trust” a payment gateway that has just a handful of users.

What would, then, be the “perfect” payment system?

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This is the actual title of a white paper released by Proximity London, a well-known creative marketing agency in the UK. Last September, they have concluded a research on virtual worlds, and the purpose of their lead in-house researcher, John Urpeth, was to dispel the myths spread around by the media about virtual worlds.

I came across John Urpeth’s paper, presented on a conference where Justin Bovington a.k.a. fizik Baskerville, CEO of Rivers Run Red, Britain’s (and probably Europe’s) largest Metaverse Development Company, also was a speaker. Sadly, this conference seemed to have been totally ignored by the media; I just happened across the actual paper presented by Urpeth today, through a marketing & advertising feed that I subscribe (and often ignore!).
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If you haven’t heard the big announcement by Linden Lab that they’re finally closing down “illegitimate virtual bankers” in Second Life, you’ve been missing all the fun

The announcement on their Official Blog states:

As of January 22, 2008, it will be prohibited to offer interest or any direct return on an investment (whether in L$ or other currency) from any object, such as an ATM, located in Second Life, without proof of an applicable government registration statement or financial institution charter.

As you might expect, getting such a charter is pretty much impossible in almost all countries in the world, so this effectively means: no more virtual banks in the “Wild West” of Second Life. More information is available here (you need a valid Second Life account to log in).

Responses to Linden Lab’s decision have been interesting. Prokofy Neva, for instance, turned libertarian for a while:

And so ends the geek dream of a vast international space where money would never become an option…which made it possible for money everywhere to become an option growing out of every prim with a dollar sign hover-text. Money *is* needed to finance this Wild West world. Where will it come from now?

My old friend Eloise Pasteur, turned economics journalist for Massively, just states:

It will be interesting to see if any of the banks survive this transition, and if they don’t, what comes along in their place. It will also be interesting to see if there is a run on the banks now.

You can bet on that — Eloise’s colleague at Massively, Tateru Nino, usually reporting on community issues, statistics, and events that impact the virtual world, covered the protests at JT Financial, one of the leading virtual banking institutions that will now go out of business:

Of course there are panic withdrawals right now, because, at the end of the day the depositors simply don’t trust the banks to be able to repay the deposits, so everyone wants to get their account completely withdrawn as soon as possible, while the money holds out.

Most “banks” have already closed down their ATM networks, of course — at least the most fraudulent ones. They’ve learned the hard lesson from Ginko — it doesn’t pay off to be honest and stay around to try to fix things. Better to cash out and head for the next Caribbean island Others, like the World Stock Exchange, have at least tried to keep their customers informed and provided them options to deal with the “banking ban” in the case it affects them.

The legal groups in Second Life, of course, see this as being only natural. Benjamin Duranske writes on his blog Virtually Blind:

My only complaint with this policy is that it has been too long in coming; it is clear and concise, and it undeniably makes the grid a better place. In the long run, policies like this, which acknowledge the obligations facing a company that offers users the chance to “make real money in a virtual world, that’s right, real money” (emphasis in original), will keep Second Life, and the grid in general, healthy and relatively free of regulation.

The irreverent lawyer Jessika Holyoke, writing on the Herald, suggests that different things are at stake here:

Additionally, Supply Linden generates revenue.  Each purchase of Linden dollars is straight revenue. [...] No capital investing in world, because they may be crooks, means that to raise massive amounts of Lindens you have to buy it through the LindeX.

An interesting theory. Would that mean that Linden Lab is actually just covering their own revenue streams by “monopolising” all currency-related issues? Does this mean that Raph Koster’s Metaplace, which will be open source and free, but will require people to buy microcurrency from his company, is actually getting it right?

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Last year, American Apparel, a popular US clothes brand, opened a shop in Second Life with a lot of positive press. Avatars could get for a few L$ relatively faithful replicas of their clothes in SL. Their project lasted almost a year or so, and then, as they finished their experiment, it was shut down (with a promise to return in the feature).

The media interested in reporting all sort of doomsday predictions about SL was obviously eager to know the reasons why American Apparel went away. Was the experiment a failure? Didn’t they reach their goal? Were they really expecting to sell more SL clothes than the popular SL-only brands? What, in fact, was their purpose?

We won’t probably know more than what was officially announced. Still, although I visited the SL shop, I never thought much about it. It was “just another brand”.

For about half a year, we also have Bershka in-world, a similar clothes brand, popular in several European countries. What is the difference in their approach? Will they also go away like American Apparel did?

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The SLogosphere has been busily trying to “interpret” the meaning of the Electric Sheep Company’s layoff of about a third of their workforce and since some of their projects are being shut down, there have been all kinds of wild speculations. There isn’t a real official press release about the layoff, just some comments from some of ESC’s representatives and an explanation by a former employee, so this is a good background for rumours, on a week where all we read is how companies are leaving SL or other virtual worlds are growing like crazy.

So it’s time for a new round of metahype and doomsday predictions? You bet!

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For anyone looking at the current misinformation (deliberate or not) being spread around by some of the media, mostly in the US, but progressively abroad, the outlook is grim. The media are incredibly powerful at creating and destroying giants. Deliberately spreading false claims and erroneous statistics is more than enough to get people scared. It’s a powerful technique, it has been used by journalists since the dawn of time, and it’ll continue to be used, as long as there is a purpose: spinning the facts to make them fit our purpose.

And what might that purpose be? As far as I can tell, just a simple one: selling articles. The current style of what has been brought in the news — and from serious sources like Time, which in turn have spawned a whole new range of misleading articles on “the end of Second Life” or, more correctly, how Second Life is actually empty. Apparently Ren Reynolds on Terra Nova was right.

The major issue, however, is that serious, honest journalists are mostly clueless on a single aspect of Second Life: they have no background on metrics, and so their experiences come simply from observation and anecdotal evidence. But… can we really blame them? Web metrics don’t apply to Second Life — or do they?

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“Shirkying” – a singular word describing the style of Valleywag’s Clay Shirky when he attacks Second Life with a mix of bad statistics and biased opinions — seems to be spreading and becoming more popular. In effect, when talking about Second Life®, being able to successfully predict the immediate future becomes a pastime of many, not the least of yours truly, but so many others engage in this ever popular exchange of opinions, that you have no option but to adopt a specific style to push your views ahead.

Recent trends published by the New World Notes, GigaOm, or the Second Life Insider — and even BusinessWeek! — all seem to point in the same direction: corporate presence in Second Life is declining somehow. They come, see the hype, never gather enough attention, and go. What is to blame? Depending on who you read, the opinions differ.

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