Second Life is the eBay of virtual worlds. In a sense, while SL at some point was sort of used as a “reference” for virtual worlds, which would try to emulate or copy some of its technological features, now Second Life seems to be too odd compared to all the rest. Nobody seems to understand what the business model is (or why it is so fundamentally important)! Every other week I get someone blaming LL’s prices, calling them “greedy” or “extortionists”. In their mind, LL should be just providing free server space and free content for everyone to enjoy — like, say, Metaplace. They don’t understand that LL provides a service, and charges for that service: the ability to participate in a somewhat regulated marketplace. This is what we get when we pay tier: the ability to be in a virtual world where property has value; where you can buy and sell content; where you get a reasonable amount of protection of your intellectual property; where you get little interference in what you can do and build in the virtual world. It’s obvious you can get some of those things elsewhere; but there is nowhere else to go to get it all.
If I had written this in, say, 2002, one might have raised several objections to this model. While in 2002 we had eBay as a model showing how a protected (but not too regulated) marketplace is a good and solid business idea, nobody really knew if the same would work with 3D digital content. After all, for 2D digital content, things are dubious (because the Web doesn’t implement intellectual property!). Why should 3D digital content be different? Well, it would be a huge shot in the dark “believing” that these concepts could actually be translated into a solid business model. But at least you could argue around the business model: what does Linden Lab sell? Server space. Why do people lease server space from LL? Because they want persistence of their content. Why do they need it? Persistent content with intellectual property rights attached to it can be transacted — bought, sold, given away. The more persistent content you have, the more likely you’ll need to lease more space (think shops!). So there is a direct tie between the economy growth and the growth of Second Life. And we’re just talking about one single aspect of SL: its content marketplace. What about the entertainment value? That adds a completely new (and unexpected, at least for 2002!) business dimension to the whole concept of the “virtual marketplace”… where an even more abstract concept, “entertainment”, is bought and sold.
Although I’m not a big fan of Snowcrash at least I will admit that Neal Stephenson did predict some things quite correctly. He thought that the two biggest sources of transactions on the Metaverse would be “programming” (in his book, creating 3D models, either of buildings or even avatars, was labelled as “programming”, so it encompasses the whole range of digital content creation in SL) and “entertainment” (namely — guess what? — live music!). He got that very, very right from the start. It might have been pure coincidence or just a very good analysis of what virtual worlds would be used for.
So when looking at all other virtual world platforms, I ask myself what their business model is, or, at least, what they think their business model is going to be. The socio-economic dynamics of Second Life are very complex. It’s not easy to understand that the next newbie logging in to SL might be an amateur DJ, entertaining friends on webcam chats (a popular pastime where music sometimes is “performed” in front of a tiny audience). They come in to SL and see there is an opportunity not only to entertain their friends here, but also get some money from tips. But then they figure out they need a streaming server; a lot of in-world operators provide that service for a few L$. Next comes some cool animations and a trendy, fashionable outfit. Then you have to hire an agent. Establish a group. Go shopping for devices, clothes, props. Start going to venues — which in turn will hire builders, programmers, and lease land. Communities start to look for entertainment, and hire DJs and musicians. RL companies do the same. But it’s all interconnected; SL is not “just about” music performances, as it isn’t “just about” building pretty things, or designing fashionable avatar clothing. It’s about a million things happening at the same time, people with a wide range of interests, all cross-connecting, all somehow contributing towards the economy (even if they never spend a single L$ in SL and give away all their content for free) and the society (even if they never join group chats or specifically go to a venue to attend an event).
This grew organically over the years, but it’s important to note that it didn’t happen in a vacuum. Its foundations were a solid business model of the company maintaining Second Life. Oh, sure, I know that a lot happened by coincidence and very little by design — nevertheless, the ability to sustain this complex virtual ecosystem is Second Life’s triumph, and it’s next-to-impossible to replicate.
Blue Mars has little of the above ideas in mind when it does their announcements. You can discuss on their forums and see the strong focus on the technology. I’ve read the announcement of “Caledonia”, Desmond’s ‘city’ in Blue Mars. It’s even supposed to have a larger area than Caledon in SL. While I’m sure that a lot of people with state-of-the-art PCs will enjoy moving over to Blue Mars to see what it has to offer, my only question was — who will build all that content? How much will it cost? How will Desmond make a return on his millionaire investment on Blue Mars?
Now I have at least one partial answer to that: most of the content will simply come from the plethora of free 3D mesh repositories out there and tweaked to look “Victorian” enough to please Desmond’s future customers.
One can only wonder what will happen when LL introduces their own mesh uploading features in SL. One thing is for certain: unlike all other virtual worlds allowing any pirated mesh to be copied and uploaded, LL will provide actually quite reasonable intellectual property protection on meshes as well. And then the question will remain: between a digital content marketplace with a working business model, where content transactions have been proved to work reasonably well, and a new “content-is-free-because-we-can-copy-it” model, what will ultimately survive? Looking at Metaplace’s failure, and OpenSim’s difficulty in growing much more in spite of all the free content there, I still think that Second Life is our best choice to establish the foundations of the upcoming Metaverse.
