life after linden

second life™ developer linden lab is not going out of business any time soon.

but with the closing of other virtual worlds like metaplace, there.com and vivaty, it's understandable people may be a bit skeptical about virtual worlds in general. some of the lab's recent actions point towards a previously unknown sensitivity to cash flow: over the last six months they're shedding staff, eliminating services and have promoted Bob Komin (former CFO) to the position of COO.

some people think these are signs of impending doom for second life. these actions could also mean that linden lab is "growing up" and trying to make themselves look like a valid acquisition target (or even an IPO candidate.) linden is known for having an "offbeat" internal culture that sometimes places creativity over accountablity, so the move from offbeat startup to standard mid-sized company isn't going to be easy.

linden isn't a publicly traded company, so we only get bits and pieces of their numbers. but by all accounts, there are still a few large educational and corporate organizations pumping cash into second life's virtual economy. along with the cloud of individuals and smaller organizations, there's still life (and commerce) on the grid.

the mainland isn't going to sink below the ocean tomorrow. it sort of makes me wonder though; what would happen to the second life ecosystem if it did?

it's sometimes fun to consider worst case scenarios; thinking about them can help you consider your behavior and risk management strategies rationally. so just as a thought experiment, what would happen if we woke up one morning to discover that the plug had been pulled on linden lab and second life was closing operations? or more specifically, what happens to the money that had been going into the second life ecosystem?

linden reported a virtual economy of over $500 million in 2009. this is the cash value of all those user-to-user prim hair sales and land rental fees. where does this economic activity go after second life closes it's doors?

and what about economic activity in second life associated with non-linden dollar transactions. say, second inventory or rivers run red or any one of a number of audio hosting services? where would those dollars go?

individuals would likely move on to services that support their use cases, and their buying power would follow them. people who use second life as a chat room may go to IMVU. users dependent on LSL scripted objects may go to an OpenSim world like ReactionGrid, OSGrid or InWorldz. blue mars, kaneva and entropia universe offer more streamlined experiences for beginners, but require more investment from content developers.

themed user communities like lusk or caledon might have the cohesion and resources to start their own OpenSim grids. two years ago we asked if you could run a grid using the OpenSim code base; i think it's pretty clear these days it's technically possible. now the question is probably one of economics. do these communities have sufficient resources to maintain vibrant virtual experiences? are there enough content creators in the luskwood community to satisfy the needs of the furry community? are the non-steampunk experiences in second life so compelling to caledon residents that they would not follow the community out of second life? what's keeping people in second life?

it is not hard to find criticism's of linden lab's product offerings, policies or support. but at the end of the day, enough people still find the value of second life compelling. linden cannot rest too long on their laurels. other virtual world technologies provide roughly the same feature set and are adding enhancements. the lab needs to now add additional features with less staff. if they can't, they'll eventually lose paying customers. it may not be perfect, but it's good enough to keep people paying tier; and it will stay that way until it changes.