Archive for January, 2013

Is Amazon Destined to Replace Marketplace and Buy SL?

Posted in Op/Ed, Real Life, RL, SecondLife®, SL® Business, Virtual Worlds with tags , , , , , , , , , , , , , , , , , , on January 10, 2013 by Valiant Westland

For years I’ve been predicting that the next wave of Virtual World development would be driven by the inevitable competition of e-commerce, marketing and gaming heavyweights like Google, Amazon & Microsoft.  All of these players have a huge vested interest in capturing the annuity income produced by the rapidly expanding world of Virtual Products and services.

SL Now On AmazonSo imagine my “surprise” when I saw the Second Life Community announcement, about Linden Lab offering Start-up and Enhancement Kits on Amazon!   I believe this is a first step towards the eventual disbanding of the Standalone SL Marketplace, in favor of an Amazon-powered alternative.  If I’m right, SL itself could be an acquisition target for Amazon in the not too distant future.

The early failure of Google’s Lively Virtual 3D World and the lackluster performance of Sony’s PlayStation Home Virtual World offering, should not be used to throw out this line of speculation.  These earlier efforts have one thing in common that Amazon and even SL doesn’t, a lack of profitability.

In addition to an Alpha-level user interface, no realistic profit potential is the main reason Google pulled the plug on Lively.  Interestingly enough, Sony, in response to Microsoft’s hugely successful xbox.com webstore, has used this years CES show to announce it is bringing its own SEN (Sony Entertainment Network) store to the US and integrate it with the PlayStation Home experience.

Amazon Web ServicesSo why would Linden Lab give up running its own primary revenue source (Marketplace)?  Total Cost of Ownership (TCO) and a potential increase in Net Revenues by outsourcing e-commerce to an organization like Amazon.  Amazon has arguably the most cost-effective and efficient e-commerce platform in the world.  They also have something Linden Lab does not, more than “164 Million paying customers!”  This is a huge potential untapped market for Second Life, that would be almost impossible to reach, without this type of partnership.

Many people, not directly involved with Second Life’s back-end development, might be surprised to learn that since 2006 “Linden Lab has used Amazon Simple Storage Service (Amazon S3) to store elements used in the Second Life world and to distribute the Second Life Viewer to end users.”  In fact, Amazon has featured Linden Lab in a Case Study, from which this quote was taken.

Every company reaches a point where one or more things happen.  They either fail, diversify with new products & markets to sustain growth, go public, acquire additional private capital or are acquired.  Linden Lab has thus far failed to expand its market.  Their attempts to diversify their product via their Enterprise product was, as reported by Hypergrid Business, “a costly mistake.”  Their more recent Time to Sell!Patterns and Creatorverse products seem unlikely to generate the type of revenue or market expansion required to have a measurable impact on their overall business.  Going public is an unlikely option and it is doubtful any more private capital would flow into a stagnant business model.  The only remaining choice for the original investors to cash out, sell Second Life!

Amazon’s Jeff Bezos has proven he is a fierce competitor who is willing to take risks and sacrifice margin to dominate an industry.  In fact, a Jan 8th, 2013 Bloomberg Businessweek story on Amazon was summarized like this: “As long as consumers are consuming and shareholders are buying what Bezos is selling, Amazon looks fairly unbeatable.”

Hang on to your virtual hats ladies and gentlemen, I think 2013 could shape up to be an interesting year.  My advice.  Buy Amazon (AMZN) stock and look forward to a Virtual e-Commerce SL Marketplace experience powered by Amazon in the near future!

Second Life ‘s “Cloudy” Future

Posted in Op/Ed, Real Life, RL, SecondLife®, SL® Advertising, SL® Business, SL® Education, SL® Fashion, Virtual Worlds with tags , , , , , , , , , on January 2, 2013 by Valiant Westland

2012 – The SL Future That Wasn’t

Before we look forward to what I believe is/should be SL’s “Cloudy” future, we might want to glance back at what 2012 brought us.  As we entered 2012, Linden Lab CEO Rodvik Humble told us we could look forward to:

  • A New Path-finding SystemMesh Avatar
  • Server side performance upgrades and bug fixes
  • More Premium benefits/features and content
  • New tools, like those used to develop Linden Realms
  • Stable tier pricing
  • Additional advanced features (Mesh!?)

Two of the most anticipated upgrades of 2012, Mesh and the new Path-finding System, are still not fully deployed.  I and many others have begun upgrading our inventory with Mesh creations, but the lack of a completed Mesh Deformer as part of the release viewer continues to generate wailing and gnashing of teeth for those with other than model-“perfect” forms.

Redgrave, one of Second Life’s most respected and innovative brands has refused to wait and introduced their own “Liquid Mesh (TM)” solution, that automatically adjusts their Liquid Mesh clothing designs to most avatar shapes.  It remains to be seen whether this bold move will result in a net gain in market share or cause confusion and ultimately frustration, when the lab finally releases built-in deformer technology.

Path-finding is another “almost here,” enhancement that can’t seem to make it to prime time.  The promise of enhanced path-finding is vehicles, BOTs and other objects being able to move more smoothly, including over sim boundaries, with less lag.  The reality for most users, who know nothing of these enhancements, is a strange new symbol and accompanying message appearing in their viewer.

Second Life URL Bar with Pending Changes Icon

Navmesh has pending changes The region has pending changes that have not yet been baked into the navmesh.

My primary SL property is a mainland region that is bisected by a Linden Road.  I have yet to see any path-finding benefits.  The same vintage automated 2005 vehicles continue to bounce and bumble up and down the road, in the same herky jerky manner, typically stalling, sinking sideways or even sling-shotting violently over the SIM border crossing near my home.

Why “Clouds” Matter

Disclaimer:  For those who are not aware, I make my RL living as a Consultant, helping companies develop and implement Technology and Online-media Marketing Plans that align with their strategic business goals.  I always urge my clients to be unabashedly “market-driven” and “surf” the technology waves whenever possible, rather than trying to fight them or create their own.  In 2013, I’ll be publishing a book on “Technology Planning In/For The Cloud.”

Cloud PartyWhile Linden Lab was busy trying to roll out in-world enhancements like Mesh, obviously designed to boost its revenues, through upgrade and new item sales revenues, the greater (Real) and virtual worlds continued their headlong flight to cloud-based computing.  In the Virtual World space, two cloud computing-based offerings, Kitely and Cloud Party saw significant user growth.  Many SL developers are eagerly porting content, in the hopes of establishing themselves as brand/solution leaders on these new cloud-based platforms.

Meanwhile the Google Apps cloud-based office productivity suite and Google Drive continue to steal market share from Microsoft’s venerable Office solution offerings, despite Microsoft offering their own cloud-based Office 365 solution.  There has been an explosion of Smart Phone and Tablet use.  In fact, tablets are now out-seLumiya Viewerlling laptops!  Unfortunately, with the exception of a couple of txt-only clients and one limited graphical viewer for Android devices called Lumiya, there is no way to access Second Life or even my.secondlife.com, from a Linden Lab official Smart Phone or Tablet client.

Although Linden Lab dabbled with a browser-based client over a year ago, there is no official timeline for the release of a full-featured cloud-based offering that I’m aware of.  Worse still, the primary user experiences in SL are still tied to antiquated 1960’s-era plain text NoteCards and graphics formats that 99% of the world doesn’t use!

Now Is NOT Time To Listen To Your Mother!
(Translation:  Get Your Head In The Clouds!)

If Second Life is going to survive, I believe they must aggressively move towards cloud-based offerings.  The longer the Lab waits to make their move to the cloud, the more regions, developers and regular users they will see opting for other platforms.

A 2013 Wish List For LL/SL

What follows is my personal 2013 wish list of SL enhancements, that I believe would go a long way towards slowing or even reversing SL’s slow downward spiral into irrelevance and make a majority of SL users happier and more productive! (Listed in no particular order)

  1. Deploy SL in a current-content-compatible cloud-based platform, similar to Kitely’s, with a pay-as-you-go option.
  2. Give us TRUE, persistent, Universal Status Indicator, that appears next to each persons name.  Allow status to be set prior to login!
  3. Consolidate login, account maintenance and inventory among “Alt”ernate accounts.
  4. Bring back user selectable Last Names!
  5. Provide automatic synchronization & watermarking of Pictures/Textures with users choice of Picasa, Flickr, etc.
  6. Replace the antiquated NoteCard system with integrated Google Docs / Drive functionality
  7. Upgrade My my.secondlife.com so that it’s mobile friendly and supports bi-directional web<>in-world messaging!
    Better yet, how about replacing the messaging engine with Google Chat!
  8. Deploy a C# application development/scripting environment and enhanced APIs for bi-directional object/data manipulation

Last but not least…   Please consider creating a true Reseller/Partner Network for the next generation of Second Life.  I continue to believe there are thousands of small businesses, franchises and vertical markets that could benefit from Virtual World solutions.  This market can ONLY be effectively tapped, if resellers have a S.M.A.R.T. annuity revenue incentive, support structure and marketing that originates with Linden Lab!

To all my Virtual Friends, Business Associates and Clients, whether still in SL or not, I wish you a healthy and prosperous New Year!