Monday, May 3, 2021

Commentary: Is Linden Lab Getting Good Results For It's Money?

In real life in Washington DC, the new President has proposed a new plan for the government to improve things, as well as how it will be paid for, tax increases. How many Americans, perhaps most, see them depends on which political faction they support. But some regardless of which party is in charge just see "The Man" reaching for their wallets while providing little in return.

Here in Second Life, among the things being talked about is it's own "taxes" going up. Or to be specific, it's fees for buying Linden dollars are no longer being charged a flat fee per transaction, but a percentage that means anyone buying more than $20 US worth at a time will be paying more. While it appears the majority aren't complaining too much about it, a few have expressed their displeasure. Kitacelia, a resident struggling with a fixed income, could only conclude the Lab made the move out of greed, pinching pennies and lowering quality while charging residents more just to fatten their wallets, and wrote a commentary explaining her position.

The last time the Lab rose the fee to buy Linden dollars, I called them out on it. Just after a lot of people had snapped up Linden Homes, some getting Premium accounts just to do so, it made them look a bit greedy from my point of view. This time, greed isn't what it's looking like, but needing money to pay bills after some decisions that didn't turn out as planned.

In their announcement on the blog, the Lindens gave several reasons for the price increase:

Investing in our infrastructure to further improve speed and cadence of updates
Overhauling the onboarding experience for the newest Residents
UI cleanup
Developing new marketing initiatives and entertainment partnerships to fuel growth
Preparing for SL18B
Less glamorous but no less crucial is our ongoing and growing work to ensure compliance with multiple regulatory requirements

Presumably they're still working on the changes for the new resident experience as I haven't heard much of anything for a while. "Multiple regulatory requirements" may mean more work behind the scenes on Tila, which in itself came about because of concerns about how the US Government was viewing Linden dollars with all the publicity going around about Bitcoin. How much this would cost is unclear, but if the Lab is having to hire some people, lawyers and technicians, and pay them overtime, it wouldn't be cheap. The Second Life Birthday, presumably that wouldn't cost them much. But a couple things in the news did bring to mind the "investing in our infrastructure" and Developing new marketing initiatives and entertainment partnerships" parts.

The announcement about the price increase came on the heels of the Second Life map being fixed after months of being glitched. The problem, and others, were due to the move of the Grid's data from it's old servers to Amazon Cloud servers. The Lab had been saying the move would both improve performance of the Grid and eventually lead to price savings for the residents. But instead while a few details are smoother, such as some residents having fewer problems with sim crossings, the move has also resulted in more and longer to fix glitches that it appears the Lab did not think would happen.

Soon afterwards came the new front page of the Second Life website of which the image at the top brought back discussion of a "behind the scenes" look at production of a commercial for Second Life that has yet to be aired. From what one person was saying on the Second Life forums, this is something that happens with some real-life companies, "The marketing folks come in with 'tweaks' that will 'reap great rewards'. ... So my friend's company does the tweaks --- which costs the company he is working for a lot of money because what seems like a small thing to the Marketing people is often not a small thing at all.  In the end it doesn't work and my friend's company puts thing back (more money gone) and then the next great sales person comes along === and it all repeats." And in the case of Second Life, well, it's something that even it it's golden age people had a hard time understanding, let alone today. So it's likely the company Linden Lab partnered with wasn't sure of the best way to advertise it, and the commercial was either stopped before it was finished or never aired. Of the picture that started the discussion, it seemed someone in the Lab decided since they spent all that money already, they might as well make use of it and took a single image from the film and photoshopped it. If this is the case, while it might not have been a *complete* waste of money, it's still a lot of cash to spend for what in the end amounted to a single image.

If it turns out Amazon ended up selling Linden Lab a lemon in regards to the Cloud Servers, only so much can be done about it. Since the old servers are gone, getting new ones will cost money, and likely mean even higher fee increases. As for advertising Second Life, finding someone in the advertising business who really understands our virtual world for what it is and what it can do is going to be a challenge. From the point of view of many, Second Life, IMVU, and VRChat are pretty much the same thing, just another place online where people can dress up their "dolls."

So does this mean that Linden Lab's only options for advertising is to try to do it on it's own or hire people whom can only do poor commercials? Not necessarily. They could take a hint from the plotlines of many of their games and have the residents give it a try. Longtime residents clearly know what makes Second Life different from other places online and know what will attract other people in spite of the lag and other issues that will frustrate newcomers. Some already have some experience with advertising, either the products of others or their own. The Lab could easily make a contest out of it, with the winner or winners given a prize (and perhaps employment if the ad turns out to be really successful).

Even if a resident-written ad isn't a blockbuster hit, it would certainly go better with the Second Life userbase than a photoshoped picture from a canceled commercial. While the Lab may be stuck with cloud servers that will take some time to iron out all the bugs, they have more options for advertising than agencies that know little about it's product.

Bixyl Shuftan


  1. What you are missing is that the profit dynamic for LL has changed -- they are no part of a bigger business model and like every other division, they have to prove they are not a cost center but a profit center to stay viable

    1. With respect, I work for a company that uses this business model. It's horrible. All our department ever hears is "You're not doing enough", and "Your department can't afford that item right now". So we wind up chasing our tails trying to work with busted equipment, and falling short of projected goals because of it. Needless to say, we have a high turnover in employees. So I imagine that somewhere up the road, Bixyl will be doing a story about the LL turnover in staff.

  2. Ll is pricing itself out of business. A lady we both know is cutting her sims. Caledon is losing sims moth by month. This may boost this months numbers from conversions, but will cost 10x more in land lost.