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Mar 31, 2006

Comments

1.

It's going to keep the company above water while they try and either get acquired or come up with a business model that's actually profitable.

2.

Well, if WoW cost 60 million to develop, this might put Cory 1/6 of the way toward winning his 25 cent bet! ;-)

3.

Oh, gosh, so many things. One thing that must be done is a complete overhaul of the client UI. I've heard tell of various people working on the UI, but I've seen no evidence of it in the client. They need to hire a really good interaction designer and a good UI person. And then actually follow-through on making changes.

They need to really sit down and look at how people use the client. Create some use cases, come up with some SL user archetypes, analyze the logs, observe behviour, and start to craft a UI to make everything as simple and straightforward as possibly and yet one that works well for each type of user. Certainly a challenging task, but not impossible. Hell, you could have different clients for different users. Or better yet, make the client UI completely customizable (WoW and EQ have paved the way on this front) so that those different types of users can create their own interfaces.

More challenging, though, is the interaction between user and avatar and environment. For common tasks this user experience needs to be intuitive and, if possible, fun. Just please stop the engineers from designing the interface, interaction, and experience.

I could go on - but where would I stop...?

4.

If I were them I'd spend it on re-write of the graphics engine on the client, or better yet, license some decent tech to do the same. $1-1.5 would get them an Unreal engine license and the manpower to do the port.

5.

I was thinking when they announced the $11 million that it wouldn't buy them *that many* salaried, benefited, insured "office Linden" programmers to keep adding furiously to the already 2000-strong server farm holding the world, and keeping changing and updating the features of that world.

They say the servers cost $1000 a pop, but that's what they open the bid on for them on the auction, and they can sell for $1100 or $2000 even. The private islands cost $1250. Currently, Governor Linden holds about 350-500 of them, however, either in abandoned land, and additionally, they maintain 20 percent of all servers on the mainland as "Governor Linden" land with roads, trees, reservoirs, lakes, dams, etc. to give the world a certain "look".

Just now, when Anshe Chung, the largest land baron, announced her account was closed and removed from the list (!) among her complaints was a claim that she couldn't retrieve $50,000 US after a Linden sale on the LindEX. It occurred to me that LL, which by its own admission does not make a profit and likely runs in the red, made payroll on March 31 and may not have been able to cash out Anshe Chung that day or the next, if she decided to try to run the bank as the LinDEX may be crashing (it rallied from 300 to 293 today).

Yesterday, Anshe announced that she would be willing to start her own game currency for the world if the Linden $ didn't stop dropping. It was down to $300 L per $1.00 US; contrast that with $250/$1.00 when GOM ran the exchange of Lindens to dollars.

I think that it's also helpful to remember that among the many things the Lindens fund besides their staff, their servers, and the round of drinks for the TN are:

o probably some 100,000 free basic accounts, quite a few of whom are high-end content providers with major sales -- all those people eat up bandwidth and CPU and server space and even get $50 free in their account each week for free.
o subsidizing non-profit lower-cost servers and lower tier for universities and non-profit projects
o printing money to give $500 each week to every premium account holder (or look at this as a purchase of Lindens at the lower rate of $361 if you buy the annual subscription at $72)
o the annual State of Play Conference (they're one of the sponsors)
o probably other gaming industry conferences, dunno
o probably other things we don't know about.

The $11m may already be spoken for, in fact.

6.

Oh, actually Ren? You don't go to the Lindens' blogs, and you don't go to the SL Herald, and you don't even listen to me prattle on, it turns out. Just read the latest issue of Business Week, which is the thing you read for RL cool business thingies I guess:

"Linden Lab CEO Rosedale plans to use the money to come up with even more interesting things. In coming weeks, for instance, Linden Lab will incorporate the Mozilla Web browser more fully into Second Life, so there will be a seamless connection between the virtual world and the World Wide Web. Rosedale also hopes to invest in new features such as better virtual vehicles for avatars to ride and more fluid interaction between avatars.

Linden Lab also expects to use the money to expand internationally. Already, some 25% of Second Life residents hail from overseas, from Australia and Japan to England and Germany. Expanding further will require local-language versions of the software, as well as local offices or partners."

http://www.businessweek.com/technology/content/mar2006/tc20060328_688225.htm?chan=technology_technology+index+page_more+of+today%27s+top+stories

7.

Good info, Prokofy. Both the bullet list and the the link to Bizweek. Thanks.

I hadn't heard that Anshe was offering an "alternate currency." Interesting. We have a word for that in RL: couterfeiting.

I think SL is still clearly on the "blade of the hockey stick," in terms of the marketing/sales/profit graph. Products and services that rely on a large network of low-margin users need to be able to attract lots of customers. To do that, they need a quality service. To build the service, they need profits. Classic cycle. You do these baby steps with investors, you move forward... hopefully you go the way of cable TV, cell phones, NetFlix, etc... and not the way of Pets.com.

The Lindens have proved that they can sustain a very decent level of paying subscribers. They have not "dried up and blown away" over a multi-year period of time, during which other MMOs have. Dried up. That is. And they've done that using a very different model of content creation; one that relies heavily on user participation. That's so Web 2.0 it hurts. And Web 2.0 has buzz (both real and stupid) these days.

What *will* the Lindens do with the $11 million? I think Prokofy is probably right; lots of that is, I imagine, already spoken for. Putting live web via some Mozilla-based interface into SL will also be a big task, and will have a major impact.

The next thing, IMHO, they have to do to move "up the hockey stick" in terms of subscriber growth, is provide a way for more "middle ground" playing experience. What do I mean by "middle ground?" Well, right now, SL is great for two levels of participation. One is pure consumer. Free-account, wander around, chat, play, spend a little (or a lot) of money and time... but don't contribute much beyond being "there." This is the level described by many as the "3D, glorified chat room, costumee party."

The second level is, essentially, a developer level. Yes, the "price of entry" for being a developer in SL is much lower than that of designing your own game -- you don't need to be a C++ or Java code jockey -- but you still need to know Photoshop, Poser, or learn a new scripting language or how to build using the 3D, in-game designer in order to really participate in the "full game" that is SL. Combine that with the general funkiness, overall "anything goes" mentality of wandering, mixing robot-power-suits, Furries, goths, Goreans, Jedis, etc., and you have an atmosphere that is going to turn off lots of "middle ground" players and would be content contributors.

Why? When many people think of "game" they think of something with a few more rules. And when they think of "economic opportunity" they think of something more organized than what's currently going on in SL; including the idea of somebody like Anshe -- one of the undisputed winners of the virtual-to-real money game -- proposing to start her own currency.

SL is marvelous. It is the closest thing to the "multiverse" we've currently got, and, as such, I think it needs to be nurtured. I have deep respect and give mad props to the Lindens for having the guts to go head-first into this truly scary area... usually with their eyes wide open. And they are doing it (again, mostly) slowly and deliberately. Which is a good thing.

Question for the SL players: What about the current SL experience must stay the same in order for it to remain the "thing" that you love? And what are you willing to give up in order for it to succeed to a point where it is viable on a larger, sustainable scale that will allow it to survive? If changes can bring in more players with a wider set of sensibilities, abilities and creative ideas... where's the tipping point?

The early Internet gurus decried the "commercialization" of the Web. The idea of turning the earthy-cruncy, Usenet-forum, text-based, playground of a couple-hundred thousand cognoscenti into a business and entertainment portal ("TV2") for the great unwashed was... unseemly... as far as many of them were concerned.

But look what we got now! Billions of people on the Web, all over the world. It has become more than was ever dreamed. Because it went from a "developer level" tool to something everybody could use. Not just "see," but use.

SL needs SL 2.0. It needs blogs. It needs "kits." It needs wikis, tags, Yahoo, eBay... not literally, of course. But it needs ways for people to "play" there that aren't as time/intention/attention intensive.

8.

"Question for the SL players: What about the current SL experience must stay the same in order for it to remain the "thing" that you love? And what are you willing to give up in order for it to succeed to a point where it is viable on a larger, sustainable scale that will allow it to survive? If changes can bring in more players with a wider set of sensibilities, abilities and creative ideas... where's the tipping point?"

SL absolutely has to preserve the collaborative creation process they've managed to create. The in-client building tools are probably 80% of the reason I log in every day; I tinker, I design, I build. It's a creative release. If they increase the barrier of entry between logging in and creating something, it's going to be a major stumbling block.

As for what I'd lose; I hate to be stubborn, but nothing. SL continues to grow precisely because of what it is: an open-ended creative sink, mixed in with an infinitely customizable social experience. If you change that formula you're going to piss off a lot of people in-world, and confuse the people not in there yet.

I will say one thing, however; SL's learning curve is horrendous. Both the interface and the more nuanced of learning SL's society make logging into SL for the first week feel like getting hit by a bus of bricks. If I hadn't stumbled upon someone that had the patience ot show me around the world for a few hours when I came in, I wouldn't be playing it to this day, probably.

I "live" by the main area where newbies get dropped off into the main grid, and almost invariably they're confused and lost. They're dropped into the circus of the welcoming area, which is like Ellis Island for freakshows, with nary more than a dollar to their name and a map. Talk about a steep learning curve!

SL just needs more polishing work on the "first week" experience.

9.

Another interesting link where Philip speaks at length about his vision and plans (and their revisions) is now up at:
http://www.secondcast.com/podcasts/secondcast-ep10.mp3

Second Cast is a weekly podcast that has a small but evidently pretty enthusiastic following, it's gottten to be the kind of NPR of SL (which some see as having the same sort of bias with its regular elitits FIC guests). This week, they presented in advance, a list of questions to the PR machine at the Lab, and after sanitation, Philip answered their questions. I wouldn't call that "journalism," but it's got its interesting moments.

Some highlights from Philip:

"We find it very unlikely that we'll need to raise the venture money again...we expect to become profitable...even with considerable expansion...we are making enough money now that we can easily see the point of profitability...there's no magic thing that has to happen...SL is a great business, it's sustaining itself...with a little bit of luck...it will be money that we can hold in reserve...no real risk ahead of us...we have great revenues...we can expand at our leisure.

Taking public? We've always viewed this as a huge long-term project...I'm more worried more right now about making the last few steps to profitability. We have all kinds of options there....

The grid is expanding at an enormous rate. A couple hundreds simulators a month.

We need to expand to multiple colos, we only have one in SF today. it's a peer to peer server system. It should be in your RL city.:


10.

Andy, you've really posed the money question there.

If the WWW commercialized and grew to billions of dollars, it was *in spite of* the tekkie granola crunchers on the Well and stuff. In the same way, we have to hope that SL as a medium and as a common carrier can creates lots of wide, open spaces where people can just keep stepping around these tekkies with their really rigid, controlling, and even cultic like "code is law" outlook who make the thing needlessly complex in part to preserve their roles as guides and gurus to the complexity, so as to preserve their own economic advantage.

In one sense, we need more law -- more of the normal, politically-created, constituent-assembly law of a representative democracy that is created by people, and has always been created by people, without any special technology. We don't have any of that kind of just law, that is the rule of law, that begins first and foremost with the separation of powers, so that we are not run by a ruthless executuive branch of government that shows its bright face to the world as a game company, and its dark face to us as our unelected government.

And then, in another sense, we need less law. We need less of that really rigid, dumbass, insensitive code-as-law that comes when literalist tekkies tell you pronunciations like "we can't get rid of bounce scripts that massacre avatars and teleport them back home and even crash their game because we can't deprecate the teleporthome function or the push function".

Of course, the scripterati cannot ever deprecate a single script: that would harm their class power and hegemony. The rest of us, however, would like the public to have a say on what scripts we find harmful to our common weal even if they are "fun" for tekkies in a sandbox, and what scripts we need the tekkies to get off their asses and make, when they can get done playing shoot-em-up.

This kind of rigid thinking with absolute blind -- and aggressively blind and furiously blind -- tunnelling toward the Bright Techno Future just has to go.

So what would somebody have to "let go"? They'd have to let go of this juvenile male fantasy that this world is a first-person shooter game like all their other MMORPEGS. They may spend their lives following the little behind of a dwarf with a sword slaying monsters and collecting gold. The rest of us have outgrown that, if it was ever fascinating at all.

That means that controls *would* have to be put on the push script so that people can live in peace and dwell in harmony without constant stupid-ass shooting and bombing from kids. If you look at the police blotter, it's mainly filled with stories of Lindens playing cops and robbers with kids who sign up on Mom's cell phone and shoot in sandboxes. This is a game where there are only a few corralled legal shooting areas. Even when people are free to make a totally controlled private island, they keep it on "safe' instead of "unsafe". That ought to tell you that the middle class for this game just is not interesting in replaying people's little urban ghetto or TV chase scene fantasies or war zones -- go to some other game for that.

So that's not something *I* need to let go as someone trying to serve hundreds of tenants who want to live in peace without either getting their ass shot up OR having to have aggressive security scripts to keep out the shooters.

No, that's something the toys-for-boys gang in the IRC channel needs to give up -- and give up peacefully without constantly gang-raping in the IRC channel Lindens who make little steps towards announcing that they might deprecate the bounce script.

And you know what else they'd have to lose? The Digeridooization (R) of the build tools. They currently have a clumsy, overly-technical -- and therefore stupid and unusable -- building interface to satisfy those few early adapters like Lordfly who keep whining for more constantly -- and I don't blame them, as the building tools suck in myriad ways even for the top architects who are RL architects.

But that's no excuse to make them so hard they are unusable for non-architects. Currently, if all I want to do is expand, say, a prim door, or texture a wall, I have to turn on an interface that *imposes an annoying white-lined grid on me covering up the object I'm trying to see* though I will not be "building by the numbers" but just moving stuff around a little. All kinds of complex stuff is contained in this UI making it a complete turn-off.

In TSO, within a few minutes, people could drag a piece of drywall across the ground and make a house. Here, they have to study math and physics and geometry and CAD-like stuff for days to be able to make two corners meet. It's just not fair.

So again, it's not *me* who has to give up anything, it's the Lordflies of the world who will have to give up their huge complexification of the tools to suit their own inner tekkie needs for content-creation. It means that yes, they might have to have a developers' version you download (and I hope they charge for that), or they have some way for the middle class to opt out of all the gunk with a toggle.

I give long lectures on how to overcome 100 difficulties just in *locking a frigging door* in SL every night to people more clueless than me. Trust me, they have a HUGE interface problem. It will only begin to be solved when they *walk around the tekkie robots completely* and start listening to the masses of ordinary users and making them a normal and simple interface.

11.

Prokofy Neva said:

...such as better virtual vehicles for avatars to ride and more fluid interaction between avatars.

The last thing SL needs is more "fluid" interactions between avatars! ;-P

12.

I'm not really that into SL, and I'll chime in meekly by saying that the newbie experience really does need some work. I'm a long time player/user of games and virtual worlds, etc, and I had no idea what to do once I landed in Second Life. I basically kicked around, rode a scooter that didn't work very well, got lost constantly and ended up thinking I was really bored.

And I logged out. If SL needs a viable revenue stream, I'd think a big step would be better newbie experience/indoctrination/education. Definitely needs a better welcome center.

13.

> I hadn't heard that Anshe was offering an "alternate
> currency." Interesting. We have a word for that in RL:
> couterfeiting.

So, what does that make the Linden or Therebucks?

What's the difference in an Anshebuck and a Linden?

14.

Andrew: Within the discussion of Anshebucks... Lindens or Therebucks are (compared to meat-world currencies like the US-dollar), essentially, "foreign currencies;" native to SL or There, respectively. The Linden is the official currency of SL. The "government" of SL, the Lindens, issue the currency in order to facilitate economic exchange within their "borders," the same as governments have been doing for thousands of years.

An "Anshebuck" would be, I assume, an alternate currency for use within SL. One not issued by the owners/governors of that space. Unless the Linden's OK'd it, that's the classic definition of counterfeit money -- dough that the government has not issued nor sanctioned.

Frankly, unless Anshe is going to issue and honor her $ABs only in her various domains -- essentially creating a local currency variant -- I don't see the point, except as a generator of fraud. Which is why governments are usually keen on "one specie, under us."

A local currency -- one that offers value related to "doing stuff in Anshe's lands" -- might be interesting. IE, "If you want to buy an Anshe house, you need to use $ABs. If you want to work as a dancer in an Anshe bar, you will be paid in $ABs. And $ABs can only be used for exchange between Anshe-controlled interests; within Anshe-land." Why that last clause? Because as soon as you cross-over into using $ABs into Linden-proper, you've got two competing currencies with no reason for differentiation.

Let's say I walk into an avatar outfitter to buy some new hair. And it's priced at $500LD or $400ABs. Well, unless I know the exchange rate, I don't know which to use. So I check some website that'll convert my LD-to-ABs and find that the price is... identical. Why? Because the shopkeeper knows that I'll do this and knows there's no incentive for me to buy a higher priced item in one currency vs. another.

Why are some things in RL *actually* more expensive in some currencies than other? Because of friction in the exchange process. It costs money to change dollars to yen. And the exchange rate is tied to real differences in real places; the countries governed by the governments that issue the currencies. The exchange rate is an outside "vote" of sorts on how well all the other countries think the various countries' economies are doing.

So... what would an exchange rate between $LD and $ABs show? How well Anshe is doing vs. the Lindens on... wheat production? Immigration policies? Defense? Right now, Ashe is a real estate developer, business person and (maybe, at times) provider of some local services, all of which rely on the "federal" Linden seystem.

An true "alternate" currency -- one that's not a counterfeit -- needs to be able to have somewhere to live without the root currency. Let me ask you this; if SL went away and the Linden dried up, where would you spend your $ABs?

And before you ask the same question about Lindens with regard to $US, remember we were first discussing this in terms of Anshe's relationship to SL.

NOW... let's talk about $LD and other "virtual" currencies in general.

Currently, the US government doesn't cosider the $LD to be real money... until you turn it into such using PayPal or some other means.

But... and here's the rub... if you take items of "real value" in trade for anything -- anything meaning "anything" and including $LD as well as cars, sheep, sexual favors, sexual favors with sheep in cars, etc. -- you need to declare that value as income as far as the US IRS is concerned. So... as virtual currencies become more *useful* (more useful as an exchange means than sheep, let's say), my guess is that governments will find ways to track their flow.

But, for now... $LD ain't money. It's a scoring system. That can be traded for money, if you like. In game (inside SL) it can be traded for game stuff. Outside? Not so much. You have to convert it to some other currency.

Right now the potential market for cross-world economics is so small that governments just don't care. So it's not counterfeiting. It's "hobby trade." As long as you declare your income... If, though, SL were to get 1 million subscribers and a very famous, clever singer were to say, "I'm going to make my new MP3 single available only to SL members, only as a download from such-and-such an in-game club, only in $LD..." You can bet Uncle Sam would make sure to check on how the flow went from $LD to $USD. Same for, eventually, books, videos, etc... anything digital.

At some point, it will "click" with the powers-that-be that virtual worlds are (or could be) giant money laundering ops. Not yet. The volume isn't there and the exchanges are a bit to micro. But soon, Dorothy, soon...

15.

An "Anshebuck" would be, I assume, an alternate currency for use within SL. One not issued by the owners/governors of that space. Unless the Linden's OK'd it, that's the classic definition of counterfeit money -- dough that the government has not issued nor sanctioned.

Actually, I believe you are incorrect. What we consider "money" these days is basically a promissory note... a holder of value. I'm not sure what value the dollar (for example) promises, but then I'm not much on economics.

Counterfeiting involves the unsanctioned duplication of promissory notes and passing it off as authentic notes. The Ashebuck is merely an alternative promissory note.

In the United States, it is perfectly legal to offer alternative currencies and accept them. There are a number of municipalities which make use of this in order to have programs where people give homeless folks "money" which can only be redeemed food or services.

If the Linden is pegged to the dollar and there isn't anything to stop anyone for offering alternative currencies pegged to the dollar, there's really nothing short of banning in-SL implementations of alternative currencies that Linden Labs can do.

I think it would be a mistake for them... if people can use SL to make their own lives, why not their own economics?

16.

The meditation on currency probably merits its own thread, but many of the issues raised so far are correct. The stumbling point I see in some of them, in my opinion, is in the readiness to accord national currencies (in the conventional sense) a more special status than they now deserve.

Money is a peculiarly social phenomenon, one whose legitimacy is heavily dependent on trust in both the social group that uses it (i.e., that we can proceed with transactions without verifying every twenty that comes our way [of course, some businesses have a different view, and check every one]) and in the institution(s) which sponsor it. (Before institutions it was a specie model -- currency backed up by precious metals; we're a long way past that).

For most of recent history the sponsoring institution most able to mobilize broad trust in currency has been the nation-state. But this is by now almost certainly the older and vanishing state of affairs. Instead, we have a situation where networked financial institutions underwrite the legitimacy of currency even before it actually is tactile, "hard" currency. The most relevant and remarkable case of this is the euro, which was "virtual" before it was real.

So in trying to answer the question about Anshebucks, we have to ask simultaneously about to what extent her empire has the institutional cultural capital (in competence, and credentials) to carry off trustable, tradable currency, in addition to asking whether the Lindens would stand for it, and what they could do to prevent it (if that's what they want).

17.

> An "Anshebuck" would be, I assume, an alternate
> currency for use within SL. One not issued by the
> owners/governors of that space.

It's been a while since I really played "Asheron's Call" (AC), so don't take these exchange rates to mean anything. Used to, in AC, there were these things called Sturdy Iron Keys (SIKs), and for trade or sale a SIK was worth about 50,000 Pyreal. Pyreal, for the record, is the official currency in AC. People accepted SIKs as well as Pyreal as payment for houses and armor, with the understanding that one SIK was about 50,000 Pyreal. Value shifted from time-to-time and sometimes from player-to-player, but you could still trade SIKs just as easily as Pyreal.

I know that was a different game from a different company with a different TOS, but my point is this: SIKs were not counterfeit Pyreal. They were a bartering tool.

Given the fact that for "Anshebucks" to work, she'll need to create an external system to accept payment for them as well as some kind of (oh, let's use Philip Rosedale's term) "economic API" for vendors and buyers to exchange/use Anchebucks, then (a) there's no way these could ever be mistaken for Lindens and (b) there's no way they could violate the TOS like some hypothetical counterfeit-Linden might.

Remember, the Second Life TOS do not prohibit people from selling Lindens externally or buying them from a third-party. The Anshebuck isn't anymore a counterfeit Linden than Influence, Pyreal, the U.S. dollar, or whatever they use it WOW is; all of those, in theory, by way of promisary Notecards (or as we call them in the real world, "checks"), could be used to barter and sell items in world. The Anshebuck is no different than bartering avatar hair for a motorcycle, or scripting something in exchange for a lap dance.

18.

First of all, alternate currencies are not "counterfeit". A counterfeit currency is one that is passed off as the currency it is designed to appear to be. An alternative currency is, well, just an alternative. Various corporations today use them, whether it is air miles, Tesco Clubcard points or whatever. Some of them are even exchangeable. The cleverness of the L$ design is that it is just an alternative currency itself, exchangeable (and insanely overvalued, even now, given the "government" that backs it and hands it out for free to most citizens).

I thought Prokofy and Illevich both made a very valid point: the newbie experience for SL seems designed to put off all but the dedicated. The initial appearance in the world lacks "what should I do now?" guidance, and the tools are fruit-loops. Prokofy made the perfect comparison: the Sims (online or not) shows the sort of transparency that is needed, at least for basic building and designing.

I tried it once, wandered about, thought "heh, neat" a few times, then left and never went back. I built some [email protected] little things in the sandbox area but saw that the tools were Not Fun(TM).

Now, for context on that last bit, I am a professional developer who occasionally reads Feynman for pleasure. Physics and maths are fun toys. I like learning things. In the Bartle typography, I am strongly Explorer. And I've a long track-record of techno-utopianism. But the SL tools made me think "why like that?" If you want me to learn obtuse tools, there had better be a *good* reason why a simpler approach isn't available. I like challenge, not frustration.

19.

I'm with Endie. Counterfeits mimic something else. And there's no reason why a counterfeit could not perform the three functions of money (store of value, medium of exchange, unit of account). The question about any commodity thought to be "the currency" is how well it performs these three functions. A "rapidly inflating currency" is a commodity whose price relative to other goods is declining quickly. That kind of price dynamic interferes with its ability to perform the three functions of money. Maybe the $L is losing value too quickly. If so, the Anshebuck, or some other commodity, might become used more often by SL residents in the three capacities of money. They might stop saying 'my house is worth 2 billion Lindens' and start saying 'my house is worth 2 Anshebucks' or 'my house is worth 10 Tringo cards' or 'my house is worth $0.18'. These are really all the same sentence.

Might be interesting to note that the first currencies were issues by goldsmiths - pieces of paper granting access to someone else's gold, stored in their vault. Soon, any account-payable piece of paper became used as a store of value and medium of exchange (a 'bill'). There's no reason this could not happen in virtual worlds. If Anshe issues a piece of paper that says "I will pay the bearer 5 US dollars", she will be issuing money worth $5. Actually more like $4.50: $5 minus a risk factor related to her reliability as a monetary authority.

But I think the jury is still out as to whether the Linden is not as good a currency as any alternative. Private actors have tried to issue money before. Many, many times. There's a reason that central authorities run the money supply, free of political and economic influence. Between 1800 and 1913, the US debated whether there should be a 'Bank of the United States'. Today, there is. And nobody questions its import. I would love to have seen the macroeconomic impact of 9/11 in the absence of a Federal Reserve System. Whee!

If they're smart, SL residents will stick to the Linden, or the US dollar. Both will be there as long as SL exists. Can't say that about Anshe Chung Enterprises.

20.

As for the complaints of many here about SL not being fun, I both agree and disagree. Like them, I'm a game-player primarily, not a Web 2.0 guy. Building stuff in SL is not fun for me. But that's not SL's business model, nor is it the model of the Web. The idea is that a fraction of users make content that all the users like. SL will rise and fall on the question of whether users like Anshe can make enough content that users like Endie and me enjoy consuming. You know, what happens when a bunch of SL folks make a YAMITG (of which I remain an unabashed fan - note that it's Tuesday morning, WOW is patching, and I am here commenting). What happens when SL gets some islands with the flavor and immersive depth of the EverQuest experience? What happens when it goes beyond being a 3D LambdaMOO with cool coding toys? Then the complaint that SL is not fun for the mainstream user will fall flat.

21.

Edward Castronova> SL will rise and fall on the question of whether users like Anshe can make enough content that users like Endie and me enjoy consuming.

I'm also more of a game player, although I do enjoy the occasional creative moments in SL. I wonder, though, if a VW needs more of a "theme" to survive long term (and I guess we won't know that until a few years down the road with SL). My biggest issue with SL is that it feels so ... disconnected. That's probably just a response to my own conditioning to "typical" games, but it really makes me wonder if this sort of "entropy" might be unsustainable in the long run?

22.

Edward wrote:

Like them, I'm a game-player primarily, not a Web 2.0 guy.

Can I beg you and other Terranova authors not to use that completely content-free term (Web 2.0) here? Please? Pretty please? That term only belongs in breathless PR releases and pitches to people who might want to give you money if you fill their heads full of promises of sugarplums and santa claus.

*begs*

--matt

23.

WRT alternative currencies, I can't help but think about the tokens used in coin-op arcades. In that world, only tokens are accepted as a functional unit of value, but we don't think of them as counterfeiting "real" money. We have no trouble accepting them as valid in the sub-world of the arcade.

So I don't see a problem with $ABs. However, I do wonder about the depth of abstraction this takes us to. $ABs would be a valid form of money within a particular sub-world of SL. But SL, with its own $LD form of money, is itself a sub-world of the Real World. And money in the parts of this world where SL is hosted has in turn (as Thomas points out) very nearly been abstracted into a Platonic ideal.

So where does that leave $ABs? How real is an abstraction of an abstraction of an abstraction?

Ouch. "My brain hurts!"

chabuhi> My biggest issue with SL is that it feels so ... disconnected.

Although I haven't tried SL (still no broadband), I've heard the same reaction from people I know who have tried it. It's too bad; as another creator/Explorer type, I'd probably get into SL if it had good building tools and wasn't so random.

Which has led me to wishing lately that there was something out there that hit the middle ground between a constrained game and a sandbox world. Too many constraints, and you might as well be watching TV; too few constraints, and you just get activity without meaning.

It's when there's a balance between order (game rules and goals) and freedom (open-ended gameplay, true building capability) that the most interesting things happen.

One possibility I can imagine for such game worlds would be massively single-player online RPGs. Maybe Spore will spark the wave I hope to see of these kinds of places. Developers would provide a vast, complex and dynamic game world, along with plenty of simple-but-powerful world-building tools. Players would then be able to both experience content and create new content for others to download into their worlds.

I have the feeling that's probably a little too much "bowling alone" for most developers, though. So the next best option would be a multiplayer world that combines the game focus of a WoW with the building power of SL.

Anyone up for Deus Ex: The MMO?

--Bart

24.

Proc > Oh, actually Ren? You don't go to the Lindens' blogs, and you don't go to the SL Herald, and you don't even listen to me prattle on, it turns out. Just read the latest issue of Business Week

Thanks Proc. Annoyingly I think my subscription just ran out. Hmm virtual worlds in actual business zeens, not sure what I think about that.

25.

/agree with the comments on the UI. I've been out of the loop with second life for a *very* long time now (actually d/l'ing it now, and going over emails with Robin and Cory from 2+years ago), but the UI was clunky and confusing at times. We tried to utilize SL in some classes at Penn State, and it worked well for certain courses where the world served a specific purpose (3d modeling, intro to programming), but it didn't work at all when using the world a little more creatively, like creating contexts/case studies within the world that people need to react to in real time. People struggled too much w/ the interface, and for some reason I specifically remember the 'flying' dynamic causing all sorts of bad user experiences.

My initial thoughts when I first found out and investigated SL and There:
SL: The EULA and approach Linden took to virtual goods and ownership broke new ground. The client/UI was very clunky and confusing
There: Very strange concept, but something that could never sustain itself financiallly. But wow...they nailed the interface. It was awesome.

26.

Introducing our own currency would really just be a last resort in the case of major inflation of the Linden$. We'd much prefer a stable Linden$. We don't want to go through the pains of running a currency, but we are capable of doing it if the Linden$ devalues too fast.

I think Edward brought it to the point when he posted that a currency has to serve the functions "store of value, medium of exchange, unit of account". If a currency is too unstable it doesn't serve those functions well and a more stable currency becomes desirable and of value to a lot of people.

Our approach would be totally independent of the L$ and, at least conceptually, cross platform. It would be in no way related or based on Linden Lab's own curreny and it would, if introduced, simply coexist with it. It would work the same way as in the real world in some countries gold coins or the US$ coexist with, say, the Russian ruble or the Yugoslav dinar.

27.

I don't care how much economic analysis you throw at me, you're not going to get me to believe that the Lindens get to issue a currency called the "Linden" backed by the USD, and that's ok, and acceptable, yet when Anshe does exactly the same thing, and issues the Anshe$ as she's calling it, within her borders, then it's "counterfeit" and even "criminal" as in RL criminal (! geez, it's a game!)

A pack of Lindenized sychophants are now attacking her on SL forums and every blog in town and saying it's "counterfeit" and also accusing her of crashing the currency market merely because she cashes out large sums to go buy more sims. Huh? Why is it any different from what the Lindens themselves do? If anything, she's backing her dollars by Lindens, US $ and the Euro. She already has everything on Paypal even outside the game and many people just pay her tier/rent directly and don't bother with washing their money through the devaluing Linden. She offers far faster cashouts to US dollars via PayPal than the Lindens.

The real question is whether she has "secure borders". A few days after she flexed her muscles on this, her account "Anshe Chung" (one of a number of her empire's accounts) was closed and her name was removed from the list-- and it seemed as if the Lindens manually overrode the usual 7-day grace period system for billing problems. The account was opened 36 hours later, but there was a great deal of speculation that the Lindens were flexing their muscles, too.

Obviously, she depends on them -- you can't host your own server (yet) and they can pull the plug any time, but basically, given that she helps them retain lots of customers by giving them good communities to live in, I don't think they will want to do this.

There's a constant game of chicken going on there, however, with the Lindens trying to land-glut the auction and force her to buy or cede her realm to baby barons who will outbid her margins.

Bart, I wonder if the flying experience is better now, however. One of the main complaints about flying came due to the telehubs, where you click on a place to go to, but the Linden social engineers had you route through a telehub that would in some cases (not all) trap your av into an imposed shopping or um architectural wonder experience on a laggy server until you begged or borrowed your way out of there.

n fact, there's a whole other discussion to be had about telehubs and the good and bad ones, but bottom line, the Lindens summarily axed them and put in point-to-point teleportation (p2p). Now you don't even have to fly too much you just press on a link, a picture, or a friend, and go there.

Other things have probably gotten better for newbs since you were last there, and there are more help stuff. I can can you give bunches of help cards and tips and tricks if you want to bother but I think ultimately, it's the build/create stuff they haven't really worked on simplifying, and they need to get better at giving people that instant "Wow, I'm god creating stuff" feeling faster and longer in SL.

They can't...because there's now a race of creators who want to hang on to the arcane secrets of creation and building, using these hugely difficult and complex tools so that their skills continue to retain value. They have every incentive to keep others at bay to empower themselves.

Example: last week, Clickable Culture reported, deep in a little-noticed story, that Harvard got hosed down *$15,000 USD* (yes, USD, not playmoney) by the SL-based Electric Sheep Company just because the tools are so hard, the ESC could play sherpa and work all those "magic wizard" thingies like a MMORPG and terraform, parcel, build and script up a sim -- and who's to know it doesn't need to cost that much?

People like that have no incentive to make the platform easier -- at least, not until they make their first million.

28.

According to my legal dictionary: counterfeit, as applied to money: 1) adj. describing a document, particularly money, which is forged or created to look real, and intended to pass for real. 2) v. to criminally forge or print a false copy of money, bonds, or other valuable documents, intending to profit from the falsity. 3) n. shorthand for phoney money passed for real.

In the abstract, no... an Anshebuck ($ASb) is not, strictly speaking, a counterfeit, because she's not "passing it off" as a Linden. I'm not sure how you'd have a virtual counterfeit in the "inky original" sense of the word, when you can't have an "inky original."

The "spirit" of the term "counterfeit," though is contained in the words, "to criminally forge or print a false copy of money, bonds, or other valuable documents, intending to profit from the falsity."

When an arcade uses tokens, there are strict laws for how they must post the "these are only tokens" signs. When a company issues rebates and coupons, there are painful rules that need to be followed (trust me... I've run big coupon marketing drives... I know...) in order to make them redeemable and legal. Lots of mom-n-pop shops just print out their own, "Bring this in for a free sub!" flyers, but, in some instances... technically... without the use of the proper legal language... they are counterfeiting. Nobody cares, because the Secret Service isn't worried about Nicki's Heroic Subs and their plans to overthrow the Fed... but it's still counterfeiting.

The reason any currency is "valid" at all, is because it is backed by some institution, whether that be a nation, a bank, a corporation, a family... or a game publisher. When you play SL, you trust that -- to the extent that you are playing the game -- the publishers of the game will still be around. If they aren't, you can't play.

The same holds true, obviously, for $USD. Which is why it's a strong currency vs., let's say, the North Korean Won. More people believe that the US Government will be around to honor its various economic promises than believe the same things about North Korea. But... if the US went away, everyone holding greenbacks would be SOL. Unless someone else decided to honor them.

So... If Anshe issues money for her plots, her businesses, her rental props, etc... she'll need to put up the equivalent of the big sign that says, "These tokens only work in the arcade." Now, the Lindens might say that the arcade is all of SL. Cool. Many border cities in Canada, for example, pretty much honor the $USD without asking you to exchange the money yourself. Why? It makes good sense for them. If the Lindens do that, fine. Live and let live.

But --for my virtual money there is already quite a bit of instability involved in virtual investing. If I invest in a RL business, of almost any type, there will *some* assets I can take out of the place if it folds. Suppose I sock a couple-a-ten grand into an SL development, and the Lindens pack up and go home? What am I left with? Prims? Photoshop files? Some scripts for code that won't work anywhere else? Gulp...

Now... add onto that the instability of $ASb. Yeah. Would I store my SLucre in the First Bank of Anshe Chung? At this point in time? Not unless she paid me some realllly serious interest. Which is how you grow a risky currency. Because what happens if the Lindens "flex their muscle..." for good and final? What if they decide that, in aggregate, her very presence is a detriment to the community. I think that that's a long shot... but if my choice is to store my dough with Zeus or Prometheus... well, I like the fire-bringer guy, but the eagle takes his wallet every day along with his liver, I hear...

29.

Frankly I don't think Anshe is well-liked enough or trusted enough for her anshedollar scheme to work. She would have to get a large enough percentage of merchants to accept her alternate currency and I just don't see that happening. I think all this talk of anshebucks is much ado about nothing.

As far as simplifying the tools.. that would be nice but I'm not seeing that happen either and I frankly don't see a reason for it. Yeah they are clugy and sucky and hard to use and fathom and I kind of want to say that they SHOULD be. Keeps the prim count down. More what needs to happen, and Prokvy we've had conversations about this, is that users of content need to be valued as much as content creators. *That* is going to take a lot of work in the minds of the 'better than thou cause I can make stuff' content creators and those who have been there from the beginning.

However I think once the content creators and the powers that be start viewing content users as something more than leeches -- they just might get more people creating things for the new players. If I were Linden Labs this is where I'd be spending my time. Its going to be a whole lot easier to create content for new people rather than overhaul the entire building UI.


30.

Vivianne, the concept of Anshe not being "well liked" is one of those virtual world memes that is spread around and reverberated mainly by small elites among the five percent of the population who read the forums, or the top scripters/content creators who are in a different class sector than land dealers. They imagine that Anshe is "not well liked" because they hate capitalism, real estate agents, profit-making "on the backs of the people" etc. etc. -- it doesn't fit with their socialist /social-engineering world view.

The reality is, hower, that a figure like Anshe could never succeed if she didn't have thousands and thousands of happy customers, who were only too happy to not only buy her land -- but more importantly, and this is often overlooked! -- sell her their land in a time of need when no one else will buy it. She is one of the chief reasons there is even a land game to discuss, because she keeps the land market liquid with liquidations of people who want to leave the game or upgrade to other sims or private islands.

Whatever some of her strong-arm tactics might be, she has two features that have made her have these thousands of happy customers: 1) she never bargains and never makes deals -- there's a price, there's a margin, and you don't have to be her friend to get a deal or be stiffed if you are a newbie and unconnected -- it's the same price for everyone 2) she creates coherent themes/looks/areas and sticks to them and that makes people feel secure from the rampant land griefing and extortion in SL.

Anshe could never have gotten as many hundreds of customers in very short order for her more than 100 private islands if she was somehow unpopular or disliked. There is a hard core of people who have had really nasty encounters with her. I can see exactly how this happens. I myself have had several major beefs with her -- and she is completely resistant to compromise. But the reality is, even if her customer service sucks often, or her staff is poorly trained and messed up, or she puts some outrageous price on prime waterfront land, people do not boycott her or stop dealing with her because there's just too many in an overwhelming majority who are pleased.

All Anshe has to do is one thing: offer a slight discount to those who use the Anshebucks in Ansheland for their rentals. And accept Anshebucks for her mainland land sales. Those two things will take up a huge percentage of the land market, and hence the entire economy. So sure, she'll get people to accept her game currency in her realm.

I agree that the users of content -- or rather let's say the re-assemblers or re-packagers of various units of contact for others -- another level of content creation like events organization, creation of rentals communities, etc. -- they need to be valued. I call it "non-inventoriable content". It's not valued, however. It's viewed as scut work.

There's a shocking lack of concern about whethe customers emerge, are happy, and stay among these content creators. It's like they are endlessly tuning up and don't think the concert began.

31.

Yeah but if no other merchant will take those bucks, then it will be a very closed economic system.

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