Self-entertainment and the end of newbies

So what can Linden Lab do about it? Give up? Well, they should take the valuable advice from Will Harvey, former founder of There.com and founder of IMVU. Let me quote the relevant section from that interview:

I had believed when starting a virtual world company that people would want to invest in having a virtual life. I thought that was true, but it was just an assumption. It turned out to be false. Only a very small number of people actually wanted to invest in a complete virtual life. Most of the people who had that predisposition were already playing massive multi-player video games which were more entertaining than virtual worlds. The market was smaller than I thought, and in that smaller market the competition was better in the entertainment factor.

By the time I realized this, it was too late. We had spent $40 million, had 200 employees, and had written six million lines of code. We were committed to a specific direction. We had lost the ability to make course corrections. That was my fault and the biggest mistake I made. I committed the company to a direction at the cost of agility. That was ultimately the demise of that company.

And he continues:

I view Second Life in the same category as There.com, and I don’t think their successes are all that different. While it is true that Second Life is in business, that does not mean it is profitable. The fundamental problems of the category apply equally to Second Life.

There.com was slightly different than SL in the sense that user-generated content was harder to create (it required special approval by the company), but I think that Will Harvey hits the nail on that interview. The point here is that There.com managed to get around 160,000 self-entertainers, but not more — by the time they reached that number, Second Life had already cornered the market, and it would be insanely expensive to turn There.com into a SL clone to try to pul people back.

What Will Harvey expected was to reach the 160 million MMORPG players. But those are part of a segment of market where people are not really self-entertainers. They’re part of the group that requires massive amounts of entertainment not to get bored.

Now I know that most people — including a lot of academic researchers — view games as a form of self-entertainment, one that is interactive and collaborative, unlike, say, TV. I don’t fully agree. It’s an intermediate step — it’s not as passive as TV, of course, but it doesn’t allow you to create your own rules. You can just follow the rules that other people set up for you. This is better than watching TV, but it still has a degree of built-in passivity: without rules and someone telling them what to do in an environment, a gamer feels hopelessly lost.

Sure, games share a lot of characteristics of virtual worlds — starting with the immersive 3D environment. MMORPGs allow community building and a virtual economy, like Castronova so well researched. They require interaction with an environment, solving puzzles, learning techniques, acquiring skills (both virtual and real) and so forth. They require talent and creativity to some degree, and the most complex MMORPGs allow some degree of user-generated content. But ultimately the point is that someone needs to tell them what to do. The company’s game designers set the rules, the goals, the purpose, the objective. Within that framework, a gamer might have almost unlimited choices, and several degrees of freedom, but they can’t “think out of the box”, because that simply isn’t part of the game.

Nevertheless, it’s a huge, huge market.

There.com — and to a point, Second Life — were created with a belief that those 160 million MMORPG players would be the prime candidates to move over to social virtual worlds, where you can create pretty much what you like (even your own MMORPG!). This, as Will Harvey pointed out, is a fallacy. MMORPG hard-core gamers want MMORPGs to be created by professional designers and programmers who set clearly defined goals and can compete and collaborate with other players to reach those goals. That is the 160-million-user market. The market for self-entertainers hardly comes from them: Second Life has little to offer since it has no goals, no rules, and all content has to be created from scratch by the users themselves. For a hard-core gamer, SL has little appeal — it would be “boring” to create all that just to play a few games with your friends. It’s so much more easy and convenient to join World of Warcraft instead.

(Of course, if you’re reading this, and have WoW open on the other window, but regularly log in to SL as well, it just means you’re an exception. Self-entertainers also enjoy games, of course, or even TV. They just have the extra ability to go beyond a set of rules imposed by others, and define their own. That doesn’t mean that, for a change, they don’t enjoy a game or two. Of course they do!)

So in my mind there is little point to place the focus on newbies. Newbies — specially undifferentiated newbies — will, at best, come from the MMORPG audience. Probably they’ll be Facebookers. At worst, they’ll be TV potato couches. None of them will remain in SL more than a few minutes, or, with luck, a few hours. And nothing that will improve the first-hour experience will change that!

The only valid argument for focusing on newbies is believing that the number of self-entertainers in the whole world are not just a million people. And perhaps they’re not. For instance, lowering the hardware and bandwidth requirements might open up SL to a number of new users who simply couldn’t log in to SL with the current viewers, and now are suddenly able to do so. Internationalisation efforts might bring some users who don’t speak English and never thought of joining SL. Marketing and promotion, on specialised media that caters to self-entertainers, might put the SL logo in front of someone who managed to be asleep the past decade and never heard of SL before. Improving all the infrastructure not only makes current residents happy, but it will also make new users more eager to join a “fast, easy, fun” self-entertainment platform. So, yes, I think that all those improvements will make the retaining rate a bit higher.

But I personally have no illusion that this will not mean another exponential growth curve. I can imagine that Philip might be able to persuade far more people to register to Second Life, but not to remain in it — or, well, put into other words, Second Life might grow linearly at a slightly increased pace, if more self-entertainers are made aware of SL (and actually find out that their computer can run the viewer), but that’s all.

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