Philip Rosedale on Managing Virtual Distance

The Managing Virtual Distance conference held by the Institute for International Research began yesterday at The Disneyland Hotel in Anaheim, CA. The keynote speaker was Philip Rosedale, CEO of Linden Lab. While he couldn't be there in person, he still managed to attend the conference by interacting with the audience through Second Life. The setup was relatively simple: a laptop was plugged into the conference center's AV system, and they opened a Second Life client. Rosedale's slideshow was shown inworld, and his speech was carried by the Second Life voice system.

Residents of Second Life were able to attend the event at the IIR island. Unfortunately licensing limitations on the conference's content prevent me from posting screenshots of all of the slides, but I'll do my best to summarize the main points below. While the presentation was, for the most part, put together for the benefit of those not yet familiar with Second Life, there are parts of it that many long-time residents will find of particular interest.

Overview

Rosedale began with a brief overview of the history of Linden Lab, stating that they were able to stop seeking further funding 12 months ago and have been modestly profitable since then. Formed in 1999, they've grown to over 200 employees across five distributed offices.

In order to explain the basic appeal of a virtual environment to the audience in Anaheim, he brought up the issue of language barriers. While an English speaker might not be able to gain any useful content from a Korean website, they could still walk around a Korean virtual space and speak with anyone who was there to find out what was going on. Web surfing is a solitary experience, while virtual world exploration almost always involves the company of others.

This philosophy goes a long way toward explaining why Second Life's building tools are so unique. Design of content had to be collaborative, and that meant finding ways of allowing one person to put together the shape of an object, while another simultaneously applies the textures, and another writes the scripts. Allowing all of this to happen at once was what drove Linden Lab to take the peculiar strategy of using a "Lego block" type building system, rather than a system that resembles conventional 3D design.

Numbers

In Rosedale's opinion, Second Life has hit an early critical mass. Despite having been open since 2003, most of the content in this virtual world has only appeared in the last couple of years. The size of the world is such that a person can participate in activities as diverse as playing bingo, dancing and surfing. A band playing in Second Life can expect an audience of about the same size as they would have if they had played a real-world club.

The difference, of course, is in cost and effort required. Bands can set up and tear down in a fraction of the time, and travel around the virtual world is almost instantaneous. Creating and selling commodities in the virtual world has the advantage of being extremely low-cost as well, as the materials required are digital. Over a thousand people are able to withdraw US$1,000 per month from the Second Life economy taking advantage of these factors, and he was able to point out one example of a costume shop owner making over US$50,000 per year.

Some population statistics followed: 75% of Second Life's residents are "international" (meaning not residents of the US), the median age is 32, and 42% of the hours spent logged in are from female residents. These statistics, however, really just showed that the range of types of people is really very wide. In Rosedale's opinion, the only real determining factor is that these are people who have had the time to log in and spend time in Second Life.

There was an interesting note on the use of the Second Life voice client. While Skype (a popular voice-over-IP telephony service) boasted 16 million minutes of use in 2006 and 27 billion in 2007, Second Life's voice has a current annual run-rate of 5 billion. Considering the voice client is new, wasn't universally accepted by the user-base, and is limited to those who would log into the virtual world in the first place, it's a favorable comparison.

The Future

Many people have wondered why Linden Lab wants to make their client and server software open source. According to Rosedale, it's the only way to remain competitive. By allowing others to create client software, they're able to access a much wider market. By allowing others to maintain their own servers, they ensure that the grid will continue to grow and have adequate support staff regardless of the size of Linden Lab itself. At that point their company would focus on the wider architecture involved in maintaining the Second Life Grid. Ultimately, though, it's seen as simply the only possible way to grow the grid. The title of the slide: "Only Open will Win".

In closing the main presentation he spoke of the graphical future of Second Life. He showed two screenshots: one of Toy Story (1995) and one of Half-Life 2 (2004). You could say that the quality is pretty close between the two, but one was painstakingly rendered by advanced computers of its time while the other is rendered in real-time. The point was that in less than ten years some of the best movie computer graphics were being rendered live in virtual environments, and that we can expect the same thing to happen in Second Life.

Q&A

Real Estate
One of the first questions asked by the Second Life audience was about the future of virtual real estate. What kinds of changes can we expect with the Open Grid? Will opening the source code make land worthless, or at least dramatically cheaper?

"I think not as much as everyone thinks," Rosedale began, "there's an implicit cost with staging and operating simulators." Linden Lab is already charging a rate that's fairly close to what it costs to run the servers in the first place. Besides, the world's size has always been controlled not by cost but by "content growth and by people's deployment of content."

For the most part, Linden Lab is focused on making the experience of navigating between areas hosted by different companies as smooth as possible. They're building in ways to understand the credentials of the company involved, and ways to allow more companies to join the main grid. "We'll be able to make money as a business because we coordinate access to the main grid and we think the fair cost of doing that will be something people are OK with."

Tangible Corporate Benefit
The audience from Anaheim, however, was more interested in how this has helped companies. What is it about a virtual environment that will benefit people in the workplace?

"When you're in Second Life your memory, your ability to remember conversations you had is very acute. The reason for that is the virtual world can easily present us with an understandable physical environment [...] the novelty of the physical environment is has a strong agency in helping us to remember. You can probably all remember the book you were reading when last on vacation because of the novelty of the location you were in when you were reading that book."

Even video conferencing can't compare. It breaks the "eye contact" that avatars can simulate, making people feel alienated from each other even if they can see each other plainly. "Meeting in virtual environments is going to be extremely commonly used"

Language
The Second Life audience asked about future language support. Will Linden Lab be developing new tools for us to integrate different languages?

There his a large amount of effort at Linden Lab, to "localize the product", meaning making Second Life compatible with more languages. They've been very aided from global partners who are building their own sites, orientation experiences and even their own client software. "It's likely we will be highly reliant on global providers that will be bringing people into Second Life," stated Rosedale, but they plan on continuing to allocate their own resources for this purpose in order to make Second Life grow as fast as possible.

Usage Statistics
The next question, coming from the Anaheim conference, was a request for usage statistics. Are there statistics on what, exactly, companies are using Second Life for?

Rosedale wasn't able to provide cost-benefit analysis for travel costs saved or deals made in Second Life versus a real-world conference as we're still too early in the process to gather that data. He was able to give a few examples, however, of companies using Second Life to good effect.

He named both IBM and Sun Microsystems, two companies who are using Second Life quite heavily. Their focus as companies are on getting utility out of Second Life in small group collaborations. A meeting with a mentor, for instance, can remove a great deal of the level of intimidation that you would in the real world but you still have the same level of engagement between two people.

Education Grants
The last question before closing was about possible education grants from Linden Lab.

While at present it's not something offered by Linden Lab, they do offer discounts to academic organizations. Meanwhile there's a "growing ecosystem" of grant opportunities from third parties like the McArthur Foundation.

Join The Conversation

What do you think of Rosedale's presentation? What did you think of his ideas? Are there questions you would have liked to ask? Leave a comment below!