More on Linden Lab's Deal With JP Morgan And Tilia (News and Commentary)

 

 On Tuesday, Linden Lab announced that Tilia had "secured a new strategic investment from J.P. Morgan." Also, "Tilia is also working with J.P. Morgan Payments to further enhance Tilia’s current capabilities throughout its processing platform including providing increased payment and payout methods, expanding pay-out currencies and support services." So just what does this mean?

 

Well, it's a little more complicated than to just call it a deal between Linden Lab and JP Morgan.

To begin with, Tilia was created over three years ago in 2019, announced in July and going active in August. The service had been created to avoid future problems with the US Government concerning changing Linden dollars for real-world currency. At first, only those cashing out Linden dollars into real world currency had to keep it in mind. In May 2020, it was expanded to cover both the buying and selling of Linden dollars. Following Linden Lab being bought up by the Waterfield group, Tilia would be involved with not just Second Life transactions, but other places online, "virtual worlds and metaverses, online games, and NFT marketplaces" such as Upland.

So why the deal? Well, the Waterfield Network's motivations are easy to understand: quick cash in exchange for sharing further profits. In the statement from Tilia, Brad Oberwager, whose position at the service was Executive Chairman, stated, "Virtual economies represent a huge financial opportunity particularly for game, app and virtual world developers. J.P. Morgan Payments, a worldwide leader and recognized innovator in payments, is the right partner as we continue to expand capabilities in line with these rapidly growing creator-based economies."

JP Morgan's motivations? As a bank, obviously their motivation is to make money, in this case over the long term. But considering Second Life's golden age was over a decade ago, why would they be interested in this kind of deal now? In the statement from Tilia, the representative from JP Morgan stated, “We believe that contextualized commerce - such as virtual economies within games and virtual worlds - is an area perfectly positioned for innovative payments solutions to play a critical role in the coming years." He would call Tilia, "a market leading provider of software gaming payments tools, to develop solutions for these new and exciting marketplaces.”

In the Second Life forums, there was a thread with two news articles about the deal on the first page, from Forbes and Venturebeat. The Forbes article called Oberwager the acting CEO of Linden Lab. The Venturebeat one stated that Tilia would no longer be under Linden Lab, but now it's own company under the Waterfield Network. Tilia would use the money from JP Morgan "to expand its business and go into new markets." So it seems Linden Lab probably won't be getting much of the money, at least not directly. The article would say the deal took about a year to negotiate. Oberwager was quoted as saying, “They invested in us and they solidified a really big partnership. We’re like the tip of the spear for the metaverse. They’re a good partner with a lot of credibility.”

He would go on to say, “This is a good thing when creators can make money. There are people around the world who make their living by building things in Second Life. ... Here’s why I think it’s so important,” Oberwager said. “These universes are social economies. If you don’t allow people to make money, if you don’t allow this economy to happen, if you don’t support creators, you’re going to have to rely on an advertising model to make your world work. That is a disaster. That would be the worst thing that could hit our society — an advertising-based metaverse.” He felt such a virtual universe would operate on companies tracking people so they could better target ads, "That's not a world we want to live in."

There is some irony in the Tilia deal. It was a year ago that Facebook announced it was going to make a major effort into virtual worlds, saying it would become the "Metaverse," even changing it's name to Meta. It's owner Mark Zuckerberg was acting like Second Life never existed. Since then, things have not gone well for Facebook/Meta. The company has lost a LOT of money and investor confidence shaky, "some analysts say that they aren’t even sure what Facebook’s core business is anymore — or if it even has one." Horizon has also performed far short of expectations. Despite Facebook's huge base of users, a Wall Street Journal article reported the number of people using Horizon has been much smaller than Second Life, with a smaller ratio of women to men, with reports of some of the men behaving badly despite the lack of legs on avatars (while in SL about 80% of the entrepreneurs are women according to Oberwager), and most areas never being visited by anyone other than their creators.

With Horizons and Facebook/Meta faltering while Second Life is flourishing and indirectly attracting attention of the largest bank in America through Tilia, Linden Lab has proven not only can it outdo Zuckerberg with virtual worlds, but also on attracting big money investors. While "The Zuck" can pretend our virtual world doesn't exist, in private he sure can't deny we do.

Sources: Forbes, Venturebeat, Petapixel, Ryan Schulta/Wall Street Journal
 

Bixyl Shuftan

Update on the Sansar Layoffs

Yesterday, the Newser reported on a number of layoffs in the Sansar team that included Kona Linden whom had been with Linden Lab for close to 16 years. While CEO Ebbe Altberg made a short statement in Sansar's Discord channel, there wasn't anything else from the Lab at the time. Yesterday afternoon, the Lab posted the following on the official blog.

There’ve been quite a few rumors about changes at the Lab and their possible effects on Second Life and Tilia. The truth is that we have made a few operational and personnel changes to ensure that we continue to stay strong for the next decade and beyond. This means that we had to say goodbye to a few employees, but at the same time we also strengthened our team by bringing back some heavy hitters who will help make Second Life better than ever.  

So, Second Life is still here and still strong. We’re continuing to invest in its future and you’ll see the results of our commitment this year as we roll out a new mobile companion app, new Linden Home themes, performance and usability improvements, and a number of other new features and enhancements. The ability to change names will be available in the next few weeks, too.  

These changes reflect our commitment to making SL strong for many years to come. To infinity and beyond!


There would be more. In the forum thread "Linden Lab CEO Confirms New Round of Layoff," Soft Linden would speak in response to "hopefully this means they'll have more time, money and effort to spend on SL"

100% what this was about! Second Life has THREE rock star graphics devs now, an engineer with a proven track record for asset optimization to make texture delivery and management fast and reliable, and so much more. The various teams will have more to say in coming months, or just watch the viewer and server release notes. Right now, some of them are literally re-learning to get dressed. They missed the era between Bento bodies and Bakes on Mesh. :)

It was a painful adjustment. But a lot of the old timers and hardcore off-hours SL users here believe these changes are important. It's part of the strategy for breathing many extra years of life into our favorite world.

There was some speculation of who were these "three rock star graphics devs" were. But so far, no confirmations. In any event, it seems much of the effort that was going to Sansar will be now focused into improving Second Life, at least for now.

Bixyl Shuftan