linden lab

News of Linden Lab and IBM collaborating on virtual world interoperability was released last week, and the consensus isn't all positive. Questions are being raised not only about the technical hurdles and actual market demand, but whether or not Linden Lab should be the ones to handle standards definition in the first place.

It all began in a closed-door meeting at Virtual Worlds 2007. While there were a large number of companies in attendance, the official press release lists just two, Linden Lab and IBM, as working on any kind of official project. Indeed you would have to wonder why the day after a large meeting of minds among virtual worlds stake holders, two of the players attempt to deliver a fait acompli to the public. They plan on creating standards for "Universal" Avatars, Security-rich Transactions, and generally support the notion that an Internet user should be able to flip between worlds like they do between websites.

Many feel this may not be possible. John Lopez commented on Metaversed recently about his experiences trying to make it possible for an avatar to move from one MUD to another. In his case, incompatible components had to be stripped from the account until very little was left. "By the time you distilled things down to the lowest common denominator," he said, "you were happy that your name and description survived the trip." This was an example from a text-only world ("MUD" stands for "Multi-User Dungeon") - how much more difficult might this be when trying to convert 3D graphics and scripted objects?

Raph Koster, CEO of Areae, was in attendance at the original meeting and had concerns of his own. No real market research has been done, which might mean that even if these interoperability standards were functional, they might not be something consumers want in the first place. Most of what was being proposed was based on assumptions that weren't necessarily sound or agreed upon, not the least of which was the nature of identity: "Much time was spent on discussing things like a federated identity system that can cut across world operators, something which may actually be illegal in Europe. Several folks seemed to come in with the assumption that avatar = identity = user."

Commenters on Raph's blog echoed these sentiments, and many were concerned that defining standards based on today's technology would be a mistake. "Can you imagine the web experience of today if someone had decided to require universal compatibility based on the screen sizes and color palettes typically available on, say, mid-range 1995 laptops?" said Kevin Bjorke. In response Richard Bartle made a disturbing comparison: "I don’t have to imagine it, I saw what happened when WAP came out based on a lowest-common- denominator phone spec."

For many Second Life businesses, however, the idea of Linden Lab defining a standard may be the deal breaker. "[...] when LL starts using industry-standard 3D formats, I'll start to take these initiatives at face value. Prims and dodgy sculpties are actually de-evolution for serious content creators who have been around a while." commented drOffset at Metaversed. While they don't seem interested in supporting other's standards, their own seem ill-defined at best and are rarely publicly documented. If it turns out that interoperability standards are possible, if consumers do indeed want them, and if they're defined to be flexible enough for future technologies, we still have to ask: is Linden Lab really the company to define them?

Yesterday's rolling restart of Second Life knocked everyone off the grid for awhile. In the ensuing chaos we were still able to pull off our Metanomics event, but all was not well. A major function (that luckily we didn't happen to be using) had just been crippled.

The technical sticking point lies in a function called llSetLinkPrimitiveParameters() which, when used right, can move an avatar into an appropriate position. It's used in hundreds (possibly thousands) of virtual goods in Second Life for that purpose, from furniture to games to vehicles. After the rolling restart, however, this function no longer moves avatars. This was done on purpose, as the effect on avatars was seen as a bug, and and it was done without notice. Entire product lines are now completely useless, and residents have filed this "fix" as a bug on the official issue tracker in the hopes that Linden Lab will turn back the clock.

Soon after this, the grid crashed and 1200 regions were inaccessible. It all seems to be running at the moment, with the only hint about the cause being "related to infrastructure problems affecting hosts on a particular part of our network."

Grid stability was acknowledged by Philip Rosedale as a critical issue for Second Life, and promises were made to improve things. Having tools that work as expected are important to all industries, and as more companies find practical uses for virtual worlds people will demand guarantees of uptime. It's not unreasonable to speculate that there could be legal ramifications for for Linden Lab when random un-announced system tweaks and outages rock the grid in the future.

At around 4PM PST, while most of Europe slept, an email was sent out about a new policy at Linden Lab. Those European customers who were awake got a bit of a nasty shock:

Hello,

We have identified that you reside in a European country. Accordingly, your next bill will reflect Value Added Tax (VAT) charged at the rate specified by your country. Please note that VAT applies to all payments to Linden Lab such as land sales, monthly maintenance fees and Premium subscription fees.
If you are eligible for a VAT exemption, you may submit proof of your exemption status, such as your VAT number, here:
https://secondlife.com/account/vat_enter_id.php

If you have other questions, please read the VAT FAQ:
http://secondlife.com/corporate/vat.php

You can also contact us via the support portal:
http://secondlife.com/support

Best regards, and thank you for your continuing support.

Linden Lab
Creators of Second Life

According to the FAQ, the following items are all taxable: Premium account registration, Purchases from the Land Store, Land use fees (tier), Private Region fees, Land auctions. Transactions of Linden Dollars between avatars aren't taxed - for now.

The actual rate of taxation varies from country to country. For example, in the UK it's 17.5%, Denmark it's 25%. Non-European residents of Second Life, or those who lied about their location to Linden Lab, need not worry about this tax. This may give them a business advantage over their European counterparts.

--- UPDATE: The grid appears back up, we await word from Linden Lab. --- Linden Lab, makers of besieged virtual world Second Life continue to remain almost silent on the current grid wide shutdown of the service as rumors abound of DOS attacks being staged by griefer groups. Aside from what appear to be well documented accounts of Griefer groups going after Linden "just because", there are also rumors starting to emerge that the current meltdown is the work of a group protesting at the recent shut down of all casino/gambling related businesses. According to sources that remain unverifiable at the time of writing, at least one group chat was monitored where ex casino owners were plotting a massive Denial of Service attack.

In a discussion panel held on Dr Dobb's island today, myself, Rissa Maidstone, Ziggy Figaro, Prokofy Neva and John Zhaoying discussed the recent turn of events, and though again no hard evidence of these groups is available, it seemed more than plausible, with similar stories and accounts coming in from multiple sources. One other topic was, funnily enough, security, or lack there of in Second Life.

One thing's for certain. Linden Lab's silence is not inspiring any confidence amongst residents with stakes in the virtual world right now. A little transparency and communication would go a long way.

Today on Virtually Blind Benjamin Duranske covered the beginnings of the discovery phase of the Bragg vs. Linden Lab lawsuit. While he was unable to offer up opinions on what the documents contained for legal reasons (of course), the particular selection of quoted documents is telling enough.

For those of you unfamiliar with the case: Bragg's virtual land in Second Life was seized by Linden Lab for a terms of service violation, and he's suing them on the premise that they would need a more solid legal foothold than that to take assets from him. In their defence Linden Lab is arguing that virtual assets are merely representations of a service being granted and have no inherent value of their own. Bragg's case now revolves around proving that the company has been marketing virtual assets as actual things of value, rather than side-effects of a service.

Now that they are entering the discovery phase of the case, Bragg is asking the court to force the company to hand over relevant evidence. There were two things quoted in Duranske's blog post stand out for me:

Plaintiff’s subjects of discovery include: the allegations and claims set forth in the complaint; representations/communications with third parties by Defendants; the statements, allegations, and admissions made in Defendants’ answer/counterclaims; the use of metaphors in communications by Defendants with third parties including consumers, venture capitalists and other investors; Defendants’ procedures and information surrounding the land auctions in Second Life; the sale of virtual land and the representations made about such sales; the revenue and/or profits obtained from land sales and taxes on such land sales; the drafting of the Terms of Service (“TOS”) Agreement; and, Defendants’ alleged counter claims. Plaintiff also indicated that discovery is needed to determine whether additional parties will need to be joined as Defendants.

... and later:

Plaintiff opposes a blanket confidentiality agreement and that the scope of any proposed confidentiality agreement was unclear to Plaintiff. No such proposed confidentiality agreement has ever been provided to Plaintiff. Plaintiff indicated his willingness to consider a confidentiality agreement to cover specific trade secrets and believes that any such information should be considered on a case-by- case basis. It is Plaintiff s position that confidentiality is particularly inappropriate given that the Defendants sought to obtain confidentiality through their arbitration clause, and that such clause was deemed unconscionable.

This leaves me with many questions, but before getting into them let's dissect that second paragraph because it's a bit dense. I'm not a lawyer but I think what this says is that confidentiality agreements, if they exist with Linden Lab, aren't legally binding in any way because he's never seen one and never had an understanding of what one might mean, if anything. On top of that, he offered them the option of one and they didn't take him up on one. Finally, if Linden Lab wanted to keep anything confidential, they lost that fight back when they lost the arbitration clause.

Perhaps a lawyer can chime in at this point and answer the following questions:

• Does that first paragraph referring to "communications" with various parties include chat logs? EVERYBODY's chat logs? Meaning that not only are our chat logs not confidential but may soon be a part of this case's public record?
• Is it implied here that other people might become defendants in this case as a result of what is discovered? What would make them liable here?
• Is he asking for the records of all previous land sales too?
• Does the official lack of real confidentiality dispense with that long-held rule that screenshots of avatars need to be made "with permission"?

In a podcast for the Digital Money Forum, Gene Yoon, VP Of Business Affairs At Linden Lab, speaks about virtual currencies and the future of virtual economies. This is a special insight into the mindset of the creators of Second Life, and you get a great overview of the function of its economy.

Of course, it doesn't stop at an overview. We get reflections on RMT (Real Money Trading), government regulation, entrepreneurship, and the ultimate future of the virtual world. We also learn that, oddly enough, the biggest market in Second Life is in avatar beautification.

At around 18 minutes long it felt like it cut a little short, but that only speaks to how enjoyable the podcast is for us virtual world geeks. Here's a direct link to the podcast, but do remember to check out the rest of the Digital Money Forum for a really great read.