Facebook ‘likes’ Second Life, High Fidelity and buys both

Of course this was a prank; happy April Fool’s Day, and my apologies to everybody! 🙂 — Gwyn

Aye, well, I admit defeat, and I should have been paying more attention lately to what was going on at the edge of Second Life®. The announcement on the Second Life Community Blogs from Ebbe ‘Linden’ Altberg, specifically targeted to the SL resident population, was a complete surprise to me, but it shouldn’t have been:

Today I am pleased to announce that we have successfully established the terms of acquisition of Linden Lab by Facebook. Mark and I will closely work together towards improving our virtual world technology together and enabling millions of Facebook users to experiment immersion in an amazing environment using Oculus Rift, with the help of Philip Rosedale’s High Fidelity company, of which Linden Lab has been an investor. […] Together, the four companies — Facebook, Oculus VR, and now Linden Lab and High Fidelity — will bring immersive virtual environments to users, where they will be able to forge closer relationships, work together, engage in collaborative building, and produce and acquire virtual goods, at a global scale. We are very happy to bring our dreams into this next stage, and very grateful to Facebook’s CEO, Mark Zuckerberg, for sharing the same vision.
[…] Following Facebook’s trend in their acquisitions, it is unlikely that the names “Linden Lab” or “High Fidelity” will disappear, and “Second Life” will remain as an independent Facebook brand with its own identity. For you, faithful Second Life users, who have supported our own efforts for over a decade, this acquisition will not change what you have already been doing for so many years. You should, however, expect big changes and improvements on the viewer and overall performance of the grid. By closely working together with the team at Oculus VR and High Fidelity, as well as with Facebook’s Cory Ondrejka — Linden Lab’s former CTO — we expect to being unsurpassable quality and realism to the immersive experience of Second Life, to a level we could have never achieve on our own. […]

There is more in that line, but I leave the rest for you to read on your own; the press release is a bit different, as it addresses a different market.

We should have seen this coming. High Fidelity’s “secret ops” were misleading — we had no clear idea what Philip was doing, except wasting funding money, but we all predicted that either High Fidelity would provide a migration plan for Second Life’s content, or any “new” virtual world would be doomed to disappear — like Blue Mars, Cloud Party, and so forth. At this stage, it’s highly unlikely that any “new” virtual world would have a chance to beat Linden Lab at their own game. Philip’s company, from the very start, had Linden Lab as its investor, and even though Philip resigned from LL’s board, it was a bit unlikely that the Lab was unaware of Philip’s plans, or that Philip was completely “out of the loop” from the company he still owned. Clearly the whole setup was a convenient façade for Philip to be able to develop a “second generation virtual world”, free from the constraints of Second Life, and making sure none of SL’s users got anxious about what would happen with their beloved virtual world. But the recent announcements by HF looked seriously like Philip was waving the “Buy me!” flag, loud and clear, and Zuckerberg’s knowledge of Philip’s involvement both in LL and HF, as well as his former relationship with Cory, caught his attention.

Linden Lab, on their side, has been toying with Facebook integration and, lately, with a way to put Second Life on a tablet. Speculation about a possible sale to Facebook is not new. The choice of a new CEO who has expert know-how about social environments should have provided a more smooth transition path (Zuckerberg and Altberg speak the same language of social media). It’s also interesting to note that the change of CEO at Linden Lab was so shortly before this announcement; it looks to me now as if Facebook had been in touch with Linden Lab before, but saw Rod Humble’s “creative gaming” vision incompatible with their own. Linden Lab replied by exchanging CEOs for someone who knows what social media is about, and re-cast their product — Second Life — as the next.-generation social hub, one that uses immersion in 3D environments. This was probably what Zuckerberg wanted to hear to make his bid. And although we all know that Zuckerberg might have despised Second Life in the past (we remember the drama about cancelling SL avatar accounts, like my own) but that was while he was still drooling over Zynga. As Zynga’s revenues stagnated and started to diminish, it was clear he needed a completely different kind of environment to capture his users’ attention.

The Oculus gang is another story. I would have expected that they’d recommend Zuckerberg to buy Valve instead. This might still be the case, but Zuckerberg is after social engagement, revenues from virtual goods (and sure, why not, also from ads), and users who are familiar with social relationships in the “new” stage of immersive social media. Valve is essentially a game tech company — one that has a wonderful business culture, but probably too alien to Facebook. In fact, thanks to Zuckerberg’s experience with Zynga (good and bad), he already knows how to get people to play games and pay for them — he already has a game distribution platform (Facebook!), he doesn’t need another one. Also, Valve’s users are “fragmented” — they play immersive 3D games, yes, but these are not connected between each other. Zynga attempted a 2D “connection” with their games, and that was how their games became initially so popular, but we all know that the novelty didn’t last. By contrast, Second Life’s “novelty value” has lasted a whole decade and more. So, at this juncture, Oculus VR just provides hype around a Facebook-branded gadget (or at least “Facebook-blessed”) which will drive people to test it out, even not fully knowing what they should do with it. Zuckerberg just suggests that social-savvy Facebook users should experiment with social-rich virtual world environments — like Second Life.

I mean, all this should have been obvious!

Mark Zuckerberg and Ebbe Altberg announce Facebook's acquisition of Linden Lab

Mark Zuckerberg and Ebbe Altberg announce Facebook’s acquisition of Linden Lab

And consider the list of events:

Linden Lab had been toying with “Facebook integration” for several years now.

Ebbe Altberg’s profile shows clearly his background in social media, from his Yahoo times. We all commented that Linden Lab’s focus on Second Life would become more “social-oriented” and generally that was viewed as a good idea. But Ebbe hasn’t released any details. He has remained silent about his long-term strategy, while still showing up pretty much everywhere, from forums to in-world interviews and conferences.

Facebook buys Oculus VR, as reported pretty much everywhere. The gaming world hiccups, trying to figure out what Zuckerberg was thinking about. The acquisition of WhatsApp was obvious (getting hundreds of millions of users for a relatively cheap price), but Oculus Rift is just hype (and thousands of happy “beta-testers”), a technology still looking for a killer application (obviously the gaming industry is happily developing all sorts of Rift-compatible games, in the hope that they become the killer application for the Rift. But suddenly all was questioned. With the new Oculus owner being Facebook, what would that mean for the Rift? Zuckerberg’s answer: immersive virtual worlds.

Wired features an article saying that the future of Facebook will be to do something like Second Life. Gamasutra’s Nick Harris, however, goes further than that and had already suggested that Facebook should simply buy Linden Lab. The SL resident community had mixed feelings about that, some claiming that the SL technology was not up to the latest standards (too cumbersome, no mobile app, no Web app) and thus Facebook wouldn’t have an interest in it. Well, history proved us all wrong: High Fidelity has the tech, Second Life has the user-base, the economy, the content, and the working business model. All that Zuckerberg needed to do was to grab both and put Cory Ondrejka in charge.

There were hints all over the place. A few days ago, Zuckerberg, after being asked what he was going to do with the Oculus Rift, since Facebook is not a hardware company, replied:

We’re not going to try to make a profit off of the hardware long-term… but if we can make this a network where people are communicating, and buying virtual goods, and there might be ads down the line… that’s where the business could come from.

That pretty much sounds like a description of the only virtual world platform still in operation, namely, Second Life. We should have spotted that immediately.

Why the sudden change towards virtual worlds? Well, perhaps it’s just because Zuckerberg’s a geek at the core. Or perhaps because he has successfully “stolen” so many employees from Linden Lab. Cory, of course, is the better-known example, but, as Hamlet Au pointed out, ex-Babbage Linden (Jim Purbrick) and Ian Wilkes, among others. Maybe he has been hanging around them for a long time and has seen how money can be made inside immersive virtual worlds. Maybe the ex-Lindens have persuaded Zuckerberg to bring them all over — both the teams at Linden Lab and the teams at High Fidelity. Maybe. We can only speculate. But that’s the trouble with companies with a geek culture — they tend to band geeks together.

Philip Rosedale and Mark Zuckerberg

Philip Rosedale and Mark Zuckerberg after announcing High Fidelity’s buyout. Group hug, anyone?

Then Philip Rosedale’s High Fidelity starts putting out news all over the place, saying how they had successfully raised more funding, and Philip even hinted that a third round of funding was on the horizon. He put up a huge sign pointing to him saying “Buy me!” and it was more than obvious who he had in mind. Philip Rosedale and Mark Zuckerberg had certainly planned all this for a long while.

P. G. Wodehouse has a wonderful expression which I love: “concatenation of circumstances”. It certainly applies to this case. Zuckerberg, possibly reaching the limits with what Facebook can do and offer (a third of the world’s population with a device connected to the Internet is a Facebook user; it’s hard to grow beyond that), is looking for new things to focus on, while, at the same time, trying to get his investors happy (thus the deal with WhatsApp). But because Facebook is already a filthy rich operation, he can afford to “go Google” — by this I mean the uncanny ability that Google has to spread themselves thin with gazillions of projects, almost none of them working out (in terms of developing a sustainable business model), but not affecting Google’s financial solidity in the least.

Maybe Zuckerberg, after a decade or so, is planning to do exactly the same: start throwing excess money into things that sound cool, that baffle the media with unexpected twists, to try to make those ideas work (in terms of generating revenue), and assembling things together from different sources, patching the Facebook brand (or at least “blessing”) on top of it, and dazzle the world.

This certainly looks like the case. Somehow Zuckerberg opened his eyes and saw that there is money to be made with virtual goods, so long as you create a social environment for those goods to have a purpose. Second Life demonstrates this perfectly. But Second Life’s tech is lagging behind and losing appeal. The next-generation virtual world, with exactly the same characteristics as Second Life, but with a 21st-century appeal, is yet to be done. Linden Lab doesn’t control the hardware that can enable that, and their software is “stuck”. Oculus VR doesn’t have the software, nor the users (in fact, all they have is hype and two generations of good prototypes). High Fidelity just has the brand, new, shiny software that allows all that — but has no users, no content, no social environment. Facebook has a billion of socially-engaged users (who, however, are not so eager to shell out money) and the money and the means to put all together. A marriage of the four — while each retains its own corporate identity and individuality — doesn’t sound so “alien” when seeing through that light.

What this means is that in a couple of years or so (I wouldn’t expect it to be earlier than that), we will have a ultimate-generation immersive virtual marketplace for social interaction, under the FB/SL/HF/Rift umbrella — one that will also allow non-Rift users to join, of course. It will start with a few millions of (current SL) users but probably aim to for the mainstream. Exactly how Zuckerberg wishes to do that is still unknown. Gamers having bought the Rift will expect the “new” immersive world to have latest-generation games, or else they will completely ignore Facebook’s vision, and that’s another story — how will game companies develop for this “new” environment? It’s definitely going to require much closer “integration” than, say, Facebook games (which can run on completely separate environments and just connect to Facebook via a simple API). We all know that it’s impossible to develop Triple-A games in Second Life, but maybe the (yet unknown) aspects of High Fidelity will allow that to be possible. But first Zuckerberg — or, more likely, Cory and Babbage, working with Philip and the developers still at Linden Lab — will need to figure out how to bring all the amazing content from Second Life into this “new” environment, and that will be a very hard task to accomplish.

Some critics wonder about what will happen with OpenSimulator, in the wake of this announcement, and fear that Zuckerberg will start suing all OpenSimulator-based grids. I don’t think that will be the case. Instead, the “New Second Life” will be so amazingly different from the current SL/OpenSimulator — even though it will have the same content — that OpenSimulator will not be a “threat” to Zuckerberg. Or, in a more impressive demonstration of Zuckerberg’s “over-reaching assimilation”, he might even provide OpenSimulator grids with the same kind of APIs and SDKs and whatnot that he might offer to game development companies — effectively allowing “external” grids to “merge” into the Facebook Metaverse (i.e. giving them the ability to get their content also visible through the future HF viewers, as long as they agree to abide to some kind of Facebook ToS), something we all hoped that would happen with Second Life and existing OpenSimulator girds, but quickly figured out that it would never become reality. Zuckerberg might now prefer to have as many allies as possible, instead of shutting eventual “small fry” out of his new vision.

Seriously, I wouldn’t like to be in Google’s shoes at this time. They blew their chance with Lively, and who knows what Google Glasses might actually mean for Google. Apple, of course, ignores all that — they never believed in a marketplace for virtual goods, unless these are music and videos, which they already sell. But apparently even Apple might have plans of their own.

Still, the lesson here is that you cannot create a successful business venture with a virtual goods marketplace merely because you have a nice gadget to provide immersion. Zuckerberg learned that very quickly: you need people, a culture, a social environment. That’s what he’s good at creating. Apple sucks at that, and so does Microsoft, and, while Google is supposed to have learned their lesson (with the failure of Lively, Buzz, Orkut, Google Groups, and merging everything into Google Plus before it’s too late), it’s still unknown if they will ever find their way back. But I think that all these companies will wait first to see what Facebook is going to achieve — maybe this will be Facebook’s biggest flops ever, and watching what the stock market says will be interesting. Microsoft and Google can make as many mistakes they like without affecting their share value. Will Facebook be able to do the same? We will see. Will Facebook succeed in creating an immersive virtual environment — the 3D world-wide web — as we have been promised a decade ago? Maybe — I remain a bit skeptic about how this isn’t really a mainstream technology. The truth is, if someone can pull it off, at least for a few years, it’s the combination of Facebook, Linden Lab, High Fidelity, and Oculus VR, all working towards the same goal.

CC BY 4.0 Facebook ‘likes’ Second Life, High Fidelity and buys both by Gwyneth Llewelyn is licensed under a Creative Commons Attribution 4.0 International License.

6 Pingbacks/Trackbacks

  • Graham Mills

    Is it just me or is that picture of Philip and Zuck just a little bit scary?

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  • Joe Miller

    I’ve always wondered why Gwyneth’s gif was winking at me. Now I know. We’ll played and happy April 1.

  • Graham Mills

    The clue is in the brevity — due to the worldwide shortage of pixels ahem

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  • Seth Regan

    If they mess with my live shows, well I might have to have a talk with Ebbe and Mark! Just sayin!

    I’m hopeful that the planned teams will keep a clear eye on how much music has added to the overall Second Life experience. Having been involved heavily in Second Life music since 2006 as “Mankind Tracer”, i have seen first hand the immense impact that the music and the music community has had on SL. I would hate to see anything negative come into play so as to interfere with live music events and performances from all over the world.

    I look forward to all that is planned for SL in the future.

  • Bevan

    Good one Gwen! Had my heart pounding there for a few minutes, very well done 🙂

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  • Sir GrooveFlyer, Esq

    It would have been more believable if you’d written about Phil’s new startup “Coffee & SlavePower”

  • snickers

  • Heh Bevan 🙂 This year I was lucky, lots of material to draw inspiration from!

  • No worries, @seth_regan:disqus, this was just a prank 🙂

  • giggles — aye, (relatively) short blogs are not my strength! 🙂

  • And that’s a real picture!!

    The one with Ebbe and Mark is not, I’m afraid it’s Photoshopped (look at Ebbe’s Twitter profile 😉 )

  • Inara Pey

    April Fools aside…

    I’m still of the opinion that High Fidelity is far more attractive a
    proposition to FB et al than LL. HF is young, hip, with lots of really cool
    vapourware which has out-of-the-box support for … well everything
    (apparently). It is at that stage where it can go anywhere, be anything enter
    any market …

    Absolutely no disrespect to Ebbe, but HF is also run by a guy who is seen as
    hip, dynamic and who definitely has a silver tongue when it comes to charming
    money out of investor’s pockets ($5 million and counting in two low-key rounds
    of investment).

    LL has the baggage of perception and also a creaking, grinding platform which
    isn’t easy to maintain, and which given its age, may well have questionable
    re-engineering or IP value.

    I’m not even sure a Facebook / LL combination would even start with a “few
    million” SL users. The best estimates of SL’s total active user base is
    around 1 million; and of those, hoe many are routinely active is open to
    debate. So, maybe a few hundred thousand SL users might be nearer the mark. I
    certainly don’t see any FB acquisition encouraging those who have left to come
    back and give it another go!

    I’d also suggest that your comment on Cory Ondrejka grabbing the likes of Jim
    Purbrick and Ian Wilkes actually underlines why an acquisition of LL isn’t
    required. Why buy the company, warts and all, when you can acquire the brains
    that made it happen a lot more cheaply, and have them build the kind of
    software environment you want, rather than saddling them with a decade-old
    system known to have issues, limitations, etc., of maintenance, cost, and
    scalability … ?

    And leave us not forget that Philip hasn’t been a slouch in encouraging some ex
    Lindens to join him at HF, so on balance…

    But on the other hand – there is also Rod Humble’s comment on October 2012,
    that LL were investing in virtual worlds – plural. This came well in advance of
    HF’s first round of venture capital funding announcement (in which LL and Kapor
    Enterprises were both listed as investors). So was Humble merely signalling
    that LL were putting some seed money into HF, or was he hinting at more going
    on at the Lab itself – particularly as he stated the results would
    “please” SL users and businesses, even if they were potentially 5
    years away from fruition at that time? So might it be that LL have something
    else up their sleeve, yet to be seen, which might make them attractive, were
    they to show it to one or two people?

    And in terms of infrastructure, scaling, etc., let’s not leave someone like
    Kitely out of the mix if FB really did want to make a play for grid-based VWs.
    Sure, Kitely doesn’t have the physical scale of LL, but it does have a
    beautiful region provisioning system that would seem to fit into FB’s
    architecture quite well. It also has the potential for a huge marketplace reach
    through the hypergrid delivery mechanism (a value-added selling-point to
    content creators). All it needs is the content to flow into the Kitely Market
    (give it time), and FB has a service they could take, package and make
    available to their own hundreds of thousands of users with minimal technical
    fuss and get them converted to VR and onto the bandwagon of whatever else FB
    chooses VR to be down the road .



    Damn all these theories, jokes (or otherwise), and speculative thinking can get you … well, thinking and speculating! 🙂 .

  • Inara Pey I actually wrote that prank a few days ago, or I’d have changed it to “Facebook buys Kitely” because I also happen to agree that it makes sense 🙂

    The conspiracy theory behind buying both Linden Lab and High Fidelity is that we really don’t know where the thin separation line between both is. If Linden Lab hadn’t been a serious investor in High Fidelity, I’d say that Philip was somehow “getting his revenge” by creating a strong competitor to SL. Instead, the more I think about it, it looks more and more as Linden Lab realized that their platform cannot grow much more (technically speaking) and requires an overhaul — but this is 2014, not 2005, when long grid downtimes were acceptable. While “rumours” of a “next-generation SL” have always been around, and these always scare people off, the more logical thing is simply to develop this “next-generation SL” outside of Linden Lab/Second Life (to make sure you can start it from scratch, using a different development model — in fact, using completely different concepts), and, once it gets rolling and working well, just use the tech to migrate Second Life to whatever HiFi comes up with. But that’s still a couple of years in the future, and in the mean time, Philip is able to do whatever he wishes, without “fear” of scaring SL residents about a “next-gen SL”.

    That’s why for me it would make sense to grab both LL and HiFi, specially because of the strong (financial) ties between both.

    The major issue with grabbing just Kitely — or subsuming OpenSimulator as the “first” platform for Facebook’s VW and improving on it — is the question of the viewer. The viewer is open source, sure, but neither Facebook nor Linden Lab would be happy about having a “competitor” attracting pretty much everybody out of Second Life, just because Facebook has the resources to attract far more people than Linden Lab can. I mean, it’s odd to have a company developing a crucial software element (an Oculus Rift-compatible viewer, one that might even be compatible with Leap and similar devices — Linden Lab is experimenting with all that!) for their direct competitor! So Facebook, if they bought Kitely, would have to develop their own viewer — from scratch. Or grab realXtend. Whatever they would do with Kitely/OpenSimulator, it would mean having to invest seriously on the viewer.

    Now the question is if that’s worth the trouble. Kitely, in spite of its enormous success, has little content and not that many users (when compared with Second Life). They have the ultra-cool tech to get sims-on-demand, yes, but using a completely different technology (say, HiFi’s), the same thing could be achieved. On the other hand, buying Kitely would be much cheaper than buying LL/HiFi. Not buying anything and just using OpenSimulator would be better. But, at the end of the day, it would be almost as good to simply develop everything from scratch.

    So basically what I think is that either Facebook goes the route of developing everything in-house — and they certainly now have a lot of people to do that, both at Oculus VR and with Cory, Jim, etc. already at Facebook — or, if it’s important for them to start with a user base and a working environment (where they know they will make money from Day One), their best choice would be simply to buy everything — LL, HiFi, Kitely, Inworldz, whatever — and “force” a federation model on top of everything (i.e. retrofit HyperGrid to work with LL’s abandoned protocol, OSG). That would save them years of development and get them a working, profitable business model from Day One. But possibly that’s not so relevant for them: just because the Facebook brand is behind whatever VW they come up with, people will sign up for it.

    Also note that if Facebook buys HiFi, Philip will have to eat his words on his latest blog post — http://highfidelity.io/blog/2014/03/identity-in-the-metaverse/ 🙂

  • Note: “sign up for it” doesn’t automatically mean “it will be successful and FB will make oodles of money”. We should always remember Google’s Lively flop. And FB has also abandoned some things that didn’t make money.

    By contrast, LL does, indeed, have a business model that generates profits (and not merely revenue). Their biggest hurdle is that the business model requires people paying huge amounts of money for tier. A better model would be relying upon a share of the sales of virtual goods. I’m quite sure that Facebook’s VW (and probably even HiFi!) will go that route: charge nothing for a virtual space, get a share of the transactions, and sell premium services (e.g. regions allowing “millions of users”).

    LL could do all that, too, but that would be a serious blow on their revenue model, and their stakeholders would shake their heads (see my previous article). Kitely, again, is showing that you can run a “SL-compatible” VW with a completely different business model, and make a profit nevertheless — but I wouldn’t bet on LL changing theirs. That might ultimately be their doom — a decade from now!

  • Inara Pey

    “If Linden Lab hadn’t been a serious investor in High Fidelity”

    Actually, we don’t know how serious an investor they are. The first round of
    investment (in which they did participate) raised $2.4 million – the lion’s share of which apparently came from True Ventures, not LL. The rest came from a mix of LL, Kapor Enterprises, Google Ventures and business angels. We don’t actually know if LL were even involved in the second round of $2.5 million venture funding and, if they were, how much more they invested.

    It’s entirely possible LL’s input could have been relatively small, and the “strong financial ties” may actually be non-existent in the scheme of things when compared to the other investors. The pay-back may well be limited to LL having access to anything HF may develop which may have an application with SL (or whatever LL themselves might be working on quite independently from HF), rather than being the funding to kick-off anything approaching “SL 2.0” via HF.

    “But, at the end of the day, it would be almost as good to simply develop everything from scratch.”

    That’s an argument that equally applies to SL, regardless of the user base. There is simply little intrinsic advantage, as I’ve mentioned. And this applies to the viewer as well. It isconsidered cumbersome, a barrier to user entry to the platform it is supposed to access, has a steep or very drawn-out learning curve, is high maintenance, doesn’t really fit the portable device market (even allowing for OnLive’s presence), etc., etc., etc.

    As such, both the server-side and the viewer side come with a lot of excess baggage which potentially massively outweighs perceived positives elsewhere – and the availability of the viewer code as open-source, and the ability of OpenSim to fairly rapidly respond to almost all server-side changes made to SL pretty much negates a lot of the code IP value.

    So again, cheaper to acquire the coding expertise through direct hires, rather than acquiring the company for the code.

    Look at it this way, why buy an Edsel and try to convert it into a Rolls Royce when you can hire the brains to make the Rolls Royce itself – and in the same time span it would take to convert the Edsel?

    As to the “making money from day one” aspect such an acquisition might bring – frankly, Facebook doesn’t need to make the money from day one. They spent $19 billion on WhatsApp without really worrying about the comparative size of the revenue stream from the app.; they’ve made no move to massively alter its revenue generation – no ads, etc.

    Similarly, they hooked into VR via Oculus VR at a time when the technology is still potentially more than 5 years away from where it will see serious mass consumer adoption (That’s Gartner’s estimate, not mine) outside of limited niche areas like games. As such, FB doesn’t need to be in a rush. They can simply let the “first generation Rift” hit its intended market, let VR enter the broader consumer consciousness through games.

    Then, while that is bubbling away, they can steer efforts toward making the hardware smaller, less intrusive, more ergonomic and consumer-friendly, and develop the “real2 metaverse of VW environments they want to put before their users / the world through a mix of internal R&D using the expertise they’ve hired-in from LL (and elsewhere) and the acquisition of small, agile start-ups like HF. And Kitely (or others in the OpenSim market).

    Or simply leave both SL and OpenSim as the small, niche, and non-threatening pond that it is, and build a full-scale lake right next door…

  • Inara Pey

    Again, FB has demonstrated time and again the driving
    directly towards profits isn’t as important to them as it needs to be to the
    likes of LL.

    Yes, LL have a business model, but as you say – it’s expensive. No worry, with
    FB’s size, they could easily hammer tier cost down – but that still leaves the
    LL tier model to revenue generation as inflexible. Even with millions of users,
    do we really want a grid of millions of regions, with really nice-looking
    homes….but only a few dozen places with people actually interact with one
    another? As you say, there are better options for revenue generation which
    could ensure much more social interaction.

    So again, why saddle yourself with LL to start with? You’re getting a model
    you’ll have to change – so all you’re doing is adding time and expense on top
    of the time and expense required to re-engineer the code, etc.

    See comment on Edsels, above.

    There’s a whole other issue here that hasn’t been scratched.

    That is: whether the world at large (and leaving aside SL’s tawdry rep in some
    circles) actually wants to invest itself into the kind of VW SL represents?
    There’s an assumption here that it does. That assumption isn’t necessarily

    So again, FB are potentially much better off poking and prodding and trying to
    understand what people really want from a virtual world environment. Do they
    want pretty homes and gardens and places to sail digital boats? Or are those of
    us doing these things REALLY in the minority? Would most people rather
    have smaller, more tightly-focused VW environments, each providing a specific
    experience or small group of experiences (learning, discovery, games), rather
    than having everyone jump into a huge (and confusing) morass of opportunities
    which is (as we’ve seen, and technical issues aside) very difficult to grow or
    to get people to adopt.

    As to the broader issues with LL’s revenue model, I pretty much covered why
    they’re in a hole myself back in January 2013 🙂 .

  • Seth Regan

    Yes Yes I found out about two minutes after I read this!!!! THEY GOT ME!!! 🙂 Althoooouuuggghhhhh…. I couldnt help thinking of the possibilities!!!

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  • Graham Mills

    The issue that intrigues me is the closure of Cloud Party. With Cory involved in the company, the codebase presumably a lot shinier than SL/ OpenSim and the company announcing support for the Oculus Rift, why let it go? Was it simply that Mark hadn’t seen the Rift at that stage or was there something else? Inability to scale? Limited support for mobile, perhaps?

  • Maybe I was looking mostly at the vast immensity of content and a working model for virtual goods sales that SL represents, and not necessarily at the rest of the whole picture; it’s clear that whatever the revenue model FB aims at, they will not go for a tier-based one. But Kitely showed that you can do a “SL-compatible” VW without copying LL’s model…

    Nevertheless, I guess you’re right after all 😀

  • No content? No users? shrugs Who knows… maybe Yahoo moved quicker than Facebook!

  • I guess that putting that into perspective, you’re right — Facebook’s plans with their other acquisitions seem to be very long-term indeed. And, in that case, getting LL just for the revenue stream it has right now, might not be a huge benefit.

    I like your point of view that everything that LL puts into the simulator code, OpenSimulator emulates after a very short while. That’s certainly true. Interestingly enough, a couple of years ago or so — before LL’s devs started to “leak” to other companies (including HiFi and Facebook…) I did a head count of both teams, and OpenSimulator core devs had slightly more developers than LL, although most of them didn’t work full-time on OpenSimulator (some, like Justin, certainly do). Not to mention small code contributors (who make all the difference). That meant that OpenSimulator could certainly “catch up” with Linden Lab quite swiftly, even though they have no idea what LL’s roadmap is going to be (or they’d antecipate it!).

    Four years ago, a little bird told me that LL did, indeed, discuss the possibility of adopting OpenSimulator instead of keeping to maintain their proprietary code. If I remember correctly, there were many reasons to stick with their “old” code — one, of course, having more control; the other was that, in general, it was more efficiently coded than OpenSimulator’s and gave better performance (after all, their code is natively-compiled C/C++, not C#) on the same hardware. Still, that slight edge means that they have to do all the hard work on their own. OpenSimulator also has a huge advantage in terms of being an open source project: “bleeding edge” features and bug fixes can be immediately released, because people don’t expect anything to work “flawlessly” — they just want to put their hands on whatever is new and shiny, test it, debug it, submit new fixes immediately, and roll on to the next batch of shiny features 🙂 (Many TPV developers — not Firestorm, though — work the same way). Linden Lab, of course, cannot afford that kind of “fast and furious” pace of development, because they have a huge environment to keep working smoothly (even though their idea of having the server release channels is actually quite clever, allowing them to experiment and test on the “real” grid, but only affecting a small number of users/regions at each time).

    What this means for Facebook is that it should make for them better sense to start something from scratch — or “almost scratch”, like HiFi — and just fix it as it goes along. Who knows, they might even make the actual simulator code open source — tying their revenue stream to the backend servers (e.g. inventory, assets, transactions, profiles) and not to the actual simulation. This would encourage people to, say, install their own simulators on their computers and interconnect with each other through Facebook — a model that Second Life most certainly doesn’t support (but OpenSimulator does)…

    Wait, I’ve just described High Fidelity!

    Oh well. I should just stop defending Linden Lab all the way 🙂

    Still, I’m curious about the relationship between Linden Lab and High Fidelity. I can agree that they might only have made a “token” investment. But I wouldn’t invest in a “competitor” which might get the ability to destroy me in the future! Even if Philip’s plan for HiFi was just to get it interesting enough to get sold, and LL would recover their investment that way, there would always be the risk that a “competitor” with a lot of money might grab HiFi and become a serious competitor…

    Then again, HiFi’s code is open source… anyone can download it and compile it… so what exactly would Facebook be “buying”?

    Gah. In this decade, virtual world companies are far harder to understand than in the previous one!

  • Hmm. What you’re describing is pretty much what Google tried to do with Lively, and we all know how that fared… so what lessons could Facebook have learned that made them avoid “poking and prodding” so much that the result is something that nobody wants?

  • Inara Pey

    “Still, I’m curious about the relationship between Linden Lab and High Fidelity.”

    Think the answer to that might lay in a remark I made earlier – did Humble’s October 2012 comment to me indicate LL are themselves also working on something “beyond” SL, and are looking to grab anything suitable HF may develop that fits – or even have parlayed investment for specific a development?

    Again, this also loops back to what LL’s potential worth could be down the road, quite aside from tany aging IP in SL as we know it…

    Like I said in my first comment…. speculating can be so … speculative! :).

  • Graham Mills

    I suppose there’s not much kudos in picking up a company with those issues even if they have significant assets. Indeed, you could read it as a reason not to go ahead with Oculus and that could explain the timing. On the other hand, if they’re really saying we are 5 years from mass adoption, you could see CP as an experiment that largely succeeded in technical terms at the present time but for some reason maybe not the platform for 5 years hence.

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  • Graham Mills

    … because the platform for VR 5 years from now will not be web-based?

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