second life

I spoke with an interesting group of people over at Intel yesterday about the future of virtual worlds. One of the things we touched on was the concept of simplicity and how it might be the key to eventual mass adoption. I've thought about it even more since speaking, and wanted to follow up with a few thoughts here, and open the conversation to a wider audience.

Virtual worlds are complicated. Prohibitively complicated. The initial learning curve is so great in Second Life for example, that most people don't stay. It's just too hard. Some other worlds are easier. Kaneva for example is pretty simple. You can be walking around and talking to people in 2 or 3 minutes. The trade off is that your avatar is pretty simple also. In fact Kaneva avatars pale in comparison to Second Life ones. This isn't important though. Not in the context of adoption and retention rates it isn't. It could be a major deciding factor in how the non-Second-Life Social Virtual Worlds will shape up next year, and even be the defining characteristic of a worthwhile contender for the virtual worlds throne that Linden Lab's creation occupies now.

A few examples

Put virtual worlds to one side just for a moment and contemplate the following list:

• Flickr tipped photo sharing when they made it simple
• Wordpress and Six Apart tipped blogging when they made it simple
• Google destroyed it's competition when they made Search simple
• The iPod is the MP3 player, other brands are insignificant
• Twitter tipped mobile life logging when it made it simple
• YouTube tipped video sharing when they made it simple

The points themselves are simplistic, but you'll see what I mean I'm sure.

So the question is...

Who will make virtual worlds simple in 2008? How will it be done? What steps do virtual worlds vendors need to take in order to make this whole concept simple?

Let me know what you think...

Yesterday's Metanomics event was part of Metaversed's experiment in working with Event Partners to syndicate live content in Second Life. While we locked Metaversed Island down to a 40 avatar limit, around 140 people were able to participate in the event as it happened. Let's get into detail here about how we're doing this, what we've found that works, and invite feedback on how to make the whole process even better for partners. It's our hope that we can help establish some "best practices" by picking up this conversation and hearing other groups experiences. Scaling events in Second Life is not easy, but we're finding that it's not as hard as we thought either.

Event Partners In Practice

Becoming an event partner is an open-enrollment proposition. If you want to become one, you just join the "Metaversed Event Partners" Second Life group and you're in. We've been able to use this group to update everyone on what media URL to use, send out care packages with paraphernalia, and make sure that detailed instructions are handed out to everyone. A special notice is usually sent out a few days ahead of time as well to remind everyone of an upcoming event.

Separately we have the "Metanomics" group which we encourage all audience members to join at all locations. When the event begins, everyone watches the same streaming video at the various locations around Second Life, and a unified discussion takes place in the Metanomics group chat.

What Works

Event partners who treat the event at their venue as their event do really well. They keep an eye on the Metanomics Event Calendar, post to the Second Life Events Listings, and send out several group notices to their respective group lists in-world. Greeting visitors and helping them with media controls when they arrive makes a difference too.

Many are running pre and post-events as well, engaging people in further discussions, workshops and presentations. This helps the audience engage with the venue's brand better, and encourages return visits. One location is even taking the direct links to the Quicktime videos and running separate events for people whose timezones didn't work for the live events.

Website promotion has been a powerful tool for some, so starting this week we've made a number of graphics available for event partners to use outside of Second Life. We're very mindful of suggestions event partners make and expect to have a number of new tools available to them in the future.

Taking The Next Step

Competition is healthy, so to cultivate a positive and competitive environment among event partners we'll be rewarding those who were able to draw the biggest crowds. This means that the top few venues will have their SLurls and logos appear in the event posting on Metaversed the day of the event, and we'll be rolling out a number of other rewards as well.

This works for a lot of reasons. It encourages people to put more effort into their events and find something to give themselves a unique edge. It also helps us with statistics gathering, as our open-enrollment process makes it a bit difficult to track where all the venues are in the first place. Overall it just encourages people to tell us more about themselves so that we might learn more about them, and stimulates positive discussion about how we can make the Event Partner process work better for everyone.

Our next event will be on Monday, November 5th at 11am where our guest will be Gene Yoon (aka. Ginsu Linden), Linden Lab's Vice President of Business Affairs. He was previously the company's general counsel and provided leadership for finance. He'll be talking about the economic policies that influence Second Life and hopefully will provide us with projections on the virtual world's financial future. We'll be announcing the top 3 venues for this event on Monday and you can usually find others on Second Life Events Listings.

If you'd like to be an event partner this Monday, join the "Metaversed Event Partners" group in Second Life and stay tuned for upcoming notices!

Up until now video in Second Life has been run through land media settings, and the few Heads-Up-Display (HUD) video services that existed depended on the tool's creators accepting and streaming your content personally. That may be about to change, as one inventor has found a new way to handle video in the virtual world. The only barrier he's running into at this point comes from Linden Lab itself.

Unmitigated Gall gave a demo yesterday of a potentially revolutionary new video service in Second Life called the "SLiPOD". A simple antenna (the cone in the picture on the right) is pulled out of your inventory, no other setup required, and the service becomes available for all everyone on the server without affecting the media settings of the land. Each video is just an item in your inventory, and as long as you're on a server (or "sim") that has an antenna somewhere on it, you can attach the video to your Heads-Up Display and watch streaming video without affecting anyone around you.

Creation of new videos will be handled automatically in a YouTube-like web interface. (The website mySLiPOD.com is currently under construction, but Gall tells me: "It will be up It should be accepting uploads by tonight. That's my official statement. Come hell or high water.") Users can upload a video and have the video object delivered to themselves automatically in-world. That video can then be handed out or sold in-world just like any other commodity. While a relatively straightforward concept, this has broad implications. Trading media in the virtual world becomes a much more tangible thing at this point, and could spawn an entire industry on its own.

Those few who know about it are very excited about the technology. "For those wanting to get content to individuals, including musicians, product developers, and video distributors, this is great. I don't have to take up my media stream or have it impact the performance of my island," JenzZa Misfit told me today, "but for some who have a primary focus on wanting people to come to view the content they present with the land stream it may be a threat."

Overall it's a potentially game-changing idea, but one that Unmitigated Gall may not have Linden Lab's support for. When he was testing it in the Beta grid, he told Dan Linden about it. Dan Linden told him it wouldn't work and he shouldn't base business plans on bugs in the system. This was, of course, before he saw that it did indeed work, wasn't based on bugs, and operated within the Terms Of Service. At this point, according to Gall, the Linden proposed that Linden Lab simply publish Gall's trade secrets on how this is done so that the company could more directly support it.

That was enough for Gall to run the demo for us now, even before the website was finished construction. He's feeling threatened by the casual proposal of open-sourcing his intellectual property without his permission for "support reasons". The hope is that if he can get the service into wide enough use public support will help mitigate the risk as it has in the past for others.

The potential for Linden Lab to take SLiPOD's design and simply implement their own version has prescendent: the creation of the Lindex was based on Gaming Open Market's (GOM) design, which eventually had to fold as a result. Businesses with remarkable products in virtual worlds need to think ahead on how to best maintain their edge not just over other competing businesses, but over the virtual world itself.

For businesses contemplating getting their feet wet in virtual worlds, the appearance of new virtual worlds rivalling Second Life matters, both for gaining more flexibility for their own needs, and ensuring that competition drives not only further innovation but better stability, quality assurance, and customer service.

Second Life, for so long the first Next Big Thing in virtual worlds, is everywhere -- and nowhere at the Virtual Worlds Fall 2007 convention in San Jose. Linden Lab, makers of Second Life, do not even have a booth in the expo, and no swag in the goody bag although they are a sponsor. Philip Rosedale, Linden's CEO, who was a keynoter at this prestigious industry conference and expo when it convened in New York in March, is not on the program to speak at all, although Robin Harper, Vice President of Marketing & Community Development and John Zdanowski, Chief Financial Officer, are scheduled to speak.

Rosedale himself nevertheless showed up with trademark carefully-coiffured touselled hair and a tight black shirt, when his plans to go to Korea were changed. Asked if he felt left out, he said, "We're famous enough that we don't have to worry about things like that." Linden staffers explained that they don't want to overwhelm everyone at a time when Second Life has had enormous press coverage -- both positive and negative -- and want the spotlight to shine on those who use their platform to do high-profile projects, like the CSI cross-media project to attract viewers of a television detective series to come into a virtual world and search for murder clues on their own, or IBM and Cisco, companies that have bought dozens of private islands to do trainings and conferencing with their staff.

Some Lindens looked a bit nervously at the huge number of virtual worlds springing up around them -- this convention boasts 30, and a sampling of all the demos showed strikingly Second-Life like scenes, with beautiful graphics, avatars that can do any Second Life animation including flight, as well as movable objects, and geographical contiguity. To be sure, some of them, like Forterra Systems, Inc., appear to be designed for real-life simulation uses such as in the medical field, not for socializing; others, like SceneCaster promise very rich possibilities for socializing and user-made content and integration into Internet social sites like Facebook -- although not user-to-user sales.

Truly, we're now going from the Golden Age, of mythic heroes and conquerors like Philip Rosedale, to the Iron Age of replication by lesser gods -- and more importantly, users themselves. Except...after perusing the many worlds and games on display here, I didn't see any that had as robust a virtual economy based on free user-created content and virtual land sales and rentals. "There's no real estate market quite as free and robust as Second Life- you're good," I assured Philip -- but in fact the others are getting a bead on him. Red Light Center, a new very easy-to-use virtual world for adult activity, will soon release a developers' system where apartments and designs cleared by the world makers for sale will contribute to a user economy, and eventually items are planned for sale. There.com already has a content-creator system that must pass through a central committee and be judged for PG suitability; Red Light Center's review will be for compatibility to prevent crashing of their servers -- which they assure us will hold hundreds more avatars than Second Life, with the limits determined by your client-side ability to render them, not by the companies' servers. Red Light Center could see a surge in membership when the Lindens finally institute age-verification and the adult-only blocks on land menus.

Still, regardless of whether Second Life itself is eclipsed by some of its users flocking to other virtual worlds in search of less lag and more swag, the experienced gained on this pioneering platform has been invaluable, and is cited repeatedly in every workshop discussing practices to replicate -- or avoid.

On the Virtual Worlds Podcast this week we mentioned the rolling restart that updated a part of the Linden Scripting Language, the code that makes much of Second Life work. The update removed a feature, or fixed a bug, depending on your perspective. Chaos broke out accross the grid.

Lear Cale was building a ferris wheel whose occupants started spinning in their seats. Homer Horwitz had a series of multi-pose chairs that now had avatars embedded in the arm rests. Nack Barnes had an entire product line that couldn't be released, and a bar that nobody could sit in anymore. Charltina Christensen was planning a giant event across two sims (a wedding) when suddenly every single bit of furniture broke. A massive amount of content was ruined, and businesses were in jeopardy.

I contacted Soft Linden, the technician responsible for resolving the issue, to find out more. They declined to comment, and I was referred to the company JIRA; a central database for bug fix and new feature requests. The bug fix request to put things back the way they were is still there, and tells quite the story. Officially closed now, it garnered 93 votes and over 50 comments from desperate business owners pleading Linden Lab to roll back the clock. Dellybean North wrote: "Please, PLEASE restore this! You've just torpedoed a 20000L product my partner and I released a couple of weeks ago!"

While Soft Linden gave frequent updates on the progress of this fix in the comments, and was hailed by all those I interviewed for their speedy and attentive service on the issue, there was some confusion over why this was done in the first place. We know that the adjustment was to prevent sim crashes, but many felt that the particular method used was unnecessarily abrupt. This could have been done in a way that didn't disrupt content, and some who caught wind of the change ahead of time tried to warn the responsible Linden to no avail.

Instead, they debated whether the technique of placing an avatar in a specific position using this function was a "hack" or a "feature". Both Soft and Qarl Linden (who later joined the debate, although what part he played in the issue remains uncertain) assert that the use of this function in this way was a hack, while others felt that any use of a completely undocumented function could be thought of that way.

Of course, some questioned whether or not the Lindens should really be debating any of this at all. "The problem here is, that Qarl and Soft actually have the nerve to argue if this was a hack or not after there are dozens of content creators complaining that this breaks about 80% of all high quality furniture at the moment," stated Juliet Ceres in her comment.

Ultimately the issue can be blamed on a lack of communication on the impact of planned changes. The consequences were lost profit for many business owners, and an uphill battle to restore consumer confidence. Ilana Debevec lost three days of business while the problem was being worked on, and Rifkin Habsburg's new game that had just launched saw a sudden halt in sales that is only now beginning to recover. Events like these reinforce that nothing is certain when working in a beta environment like Second Life. As Ilana put it in later interview: "You can take every precaution and test you want when devloping a product, but you can't predict when you're gonna get SLcrewed."

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.

The promise of a new physics engine for the virtual world has been a long time in coming, and the hope is that it will bring with it fewer crashes, less lag, and better overall physics and tangibility to the virtual world of Second Life.

For the time being of course it's all still in Beta, which means it really doesn't work right yet. The picture here shows one peculiar issue where a bunch of boxes I rezzed don't quite sit on top of one another, although when stacked and walked into they tumble realistically. There are several other issues (see release notes), but this is fully acknowledged and the community is being asked to participate in getting everything worked out. They've established a wiki for the Havok 4 Beta, and a place for users to tell Linden Lab about everything they discover on the issue tracker.

For those of you really wanting to get in-depth about the Havok 4 engine, the Lindens will be holding "Havok 4 Office Hours" in Second Life at the Brampton Linden Stage Tuesdays at 9pm PDT and Thursdays at 8am PDT.

If the Havok 4 engine really does end up working the way it's supposed to, we'll see many changes in the way people spend time in Second Life. Vehicles, games, and even buildings will behave a little differently, hopefully for the better. The most basic of consumer demands - that things work the way we expect them to - may be met by this change. If that happens, who knows what else is possible?

Today I met with Joe Rigby, co-owner of a very young startup called MellaniuM. His company is in the process of experimenting with two things: video streaming from 3D environments, and finding new ways to use custom virtual worlds for business applications. He's already had some impressive successes.

We started off in Skype voice chat, but then he met me in Second Life at the same time. Using tools his company haven't even named yet, he was able to broadcast video of our avatars meeting through Skype. (Click the picture for full-size.) They still consider it technology in the pre-alpha stage, and won't feel like it's ready for consumers until they have it running in much higher detail. Even at the low resolution, being "in" Second Life through Skype and, in addition, seeing myself through multiple camera angles at once was a pretty impressive experience.

This was, of course, just the beginning. He switched from Second Life to a custom environment they had built with the Unreal 2 engine and again, streamed it right through Skype. The great part about using an engine like this one was that they were able to import high-detail AutoCAD files and make them look extremely realistic. Soon I was watching a high-quality alien avatar from Mars Attacks! exploring the environment in real-time. Below is a video of the world he had walked me through that they apparently built over the course of a few days.

Recently Rigby showcased the technology at the Copper/Cobre Conference. All of the other presenters went up and showed PowerPoint presentations. Rather than show a series of AutoCAD sketches, he plugged his laptop into the projector and walked the crowd through a 3D rendering. A copper smelter in the U.S. retained him to create a "virtual furnace" that not only showed the schematics in high resolution, but had walls lined with photographs of how everything is supposed to look as you assemble the machine. Not only that, but you can actually enter the furnace itself and (through color coding) see how everything is supposed to fit together.

Even though his company has already been retained by a few engineering firms for more work, Rigby sees more applications for high-resolution custom worlds. He's currently in touch with several galleries in London to create scale models of the buildings with high resolution art renderings inside. People could download them for a token fee (maybe five dollars) and collect them over time as the gallery updates itself with new exhibits. Also, since "Unreal 2" is a server-based platform, you could walk around these little worlds with your friends.

MellaniuM has only been experimenting with the possibilities since September of last year and has already shown some great innovations. If they keep up this pace they'll be the ones to watch in the future.

A new Terms Of Service popped up today when people logged into Second Life. Of course, you had to click "I Accept" or risk losing access to your account, thus bringing up the same issues we've addressed before. Most will scroll past the mass of legalese unable to interpret any of it, but fortunately Virtually Blind has summarized the main points.

The first big change is to make it more difficult to bring claims over US$10,000 against Linden Lab. Simply put, if you file against the company in any state other than California (where Judges are more prone to favor a tech company), your case will probably be thrown out and Linden Lab can come after you for up to US$1,000 in attorney fees.

The second change addresses claims under US$10,000, and states that for amounts of that size they'll go to arbitration. This means that smaller claims don't ever have to go through expensive court proceedings. They refer in the official FAQ to the National Arbitration Forum who generally charge less than US$185.

Guildcafe is a social media site aimed at multi-game gamers, but Second Life residents (mostly those who are also gamers) are adapting it for their own network.

Second Life folks are creating "guilds" for their primary affiliation in Second Life. You might find people who play an in-world RPG, or who are active in a particular in-world business listing it as their Second Life guild -- which allows them to do outreach and recruit new people to participate with them in-world.

The site includes a way to create a "gamer resume" listing your games, avatar names, years of participation, guild, server, and so on as relevant. It's attracting a high number of socially oriented gamers, and has actually interesting forums on a lot of topics. There are a lot of quizzes and questions, personal blogs, and other features not found on a pure "silo" gaming site like guildportal. This is really more about community -- the meta-game.

If you try it out, tell them Shava sent you -- I get reputation points if you do! There are lots of fun features here, particularly aimed at those of us who span gaming and virtual worlds, but really kind of fun for anyone.

See you there! Feel free to friend me as "shava"

Yrs,
Shava Nerad/Shava Suntzu in SL

For some odd reason, we stopped building nuclear reactors 20yrs or so ago. Denver university research professor Robert Amme plans to build one in Second Life however, with the goal of training the next generation of environmental assessment specialists in a risk free simulation geared towards distance learning and collaboration.

In a way, running experiments and teaching classes in Second Life offers a number of advantages over real life: students watching from their computer screens won’t have to wear expensive radiation badges or obtain clearance to enter an actual laboratory. Instead, they can attend in the guise of “avatars” — virtual likenesses, like personalized computer game characters, whose appearance and features can be customized.

One commenter on the InsideHigerEd site wondered if there were enough hippies in Second Life to organize a protest. I shouldn't think that would be a problem, would you? :)

Thanks George!

Gartner analyst Steve Prentice made a pretty big blip on our radar when he predicted that 80% of internet users would have a virtual life by 2011 in April this year. He recently put a spanner in the works by warning companies away from Second Life. With all this kerfuffle and comotion over Steve's comments, we figured it was time he came into Second Life and clarified his position on Metaversed Live our weekly inworld live podcast.

Today 12 noon SLT/PST, 8pm GMT

Whether you agree with him or not, it's going to be a fascinating discussion. It'll be held at Metaversed stadium [teleport url] which was kindly loaned to us by John Lopez. You'd be advised to get there a good half hour early as these things are more often thatn not packed out very quickly.

Im still confirming panelists, im afraid we've put this together at rather short notice (which won't surprise regulars :) but so far it's looking pretty damn good, so i'll keep you posted on that as we go.

Need Help?

If you're new in Second Life, and would like to attend, then just email nick@metaversed.com and i'll try to help you get to the right place and sort your audio etc. Metaversed events are very newcomer friendly, so do join us!

Journalists

If you're a journalist (traditional or blogger) and need a hand getting interview opps or ensuring a spot, please email me at nick@metaversed.com

See you there...

Over the weekend, with a little help from friends, I perfected the tricky business of recording Second Life voice on a Mac (yes, it sounds simple, but trust me it isn't..), I even put together a video tutorial for it. Try as I might though, I cannot get this working in Windows!

I have been using TotalRecorder, Audacity and Virtual Audio Cable to try and replicate what I've been able to do on the Mac, but though i had it working for a brief time this morning, a solid solution still eludes me.

How You Can Help

If you're good at this stuff (Win is a whole alien world to me..) and have a little time to spare, please try to do the following.

• Record a two way conversation in Second Life
• Reproduce the results multiple times
• Without using extra hardware, or prohibitively expensive software

Its really important that you make sure you are really recording a two way conversation, it's easy to think you've got it, only to discover you're just recording one side -- I've done this a lot!

Prizes, Money, Strippers and Balloons!

...well, not really You see anyone sleeping in a bed of money over here? That said, I'd be more than happy to plug, mention, shower with grattitude etc anyone that can help out. I'd really like to get this solved.

If you're a windows sound expert, email me at nick@metaversed.com and we can work together on this when time permits!

Thanks everyone...

Many people, particularly those that are interested in, but not intimately involved in, virtual worlds, tend to think of Second Life, Kaneva, Entropia and other 3D environments as being at the advancing edge of web2.0. They're often referred to as web3.0, the 3D web, or web 3.D. Many other people view them as a waste of time, or an interesting diversion at best. These people most often have not been into Second Life, or have not managed to get over that initial learning curve. Through no fault of their own, they have a flawed view of what's happening in this space.

The reality is that the 3D web is in its infancy, and as such, is nowhere even close to the leading edge of web2.0 in terms of communication, Search, identity, sheesh, not even collaboration. It's certainly not a waste of time though, or something that's going to just go away if you ignore it, or pretend it doesn't matter. It does matter, and those people trying to make the best of the kludgy communications systems, poor system stability and all the other oddities that arise from using a system that's in constant development are at the forefront of something that will eventually change the way we all live and work on the internet.

That doesn't stop it feeling like some kind of insane time warp though. With that in mind, here's a fun, but true list of reasons why what we're doing in virtual worlds today is like what we did 10yrs ago.

1. Return of the Walled Garden
As the big players fight to maintain their precarious dominance, the concept of the walled garden rears its inevitable and ugly head once more. We're so many years from being able to travel freely between ALL worlds, and when we do, we'll have to fight the browser wars all over again as well...

2. Clueless Corporations
In any new medium, eventually the suits turn up, and get it utterly, and totally wrong. To the hilarity of the rest of us. Like the WWW before them, Virtual Worlds are no exception, and corporations, as well as politicians regularly fall afoul of new media rule #1: Look before you leap! For wont of a little observation, understanding and immersion within the culture of virtual worlds we see all kinds of mischief befall the unwary. Personally I'd not have it any other way, but maybe that's just me..

3. Spinning Logos
...and other horrors, like the 3D equivalent of the blink tag. We're still trying to work out what works best for attracting visitors to commercial sites in Virtual Worlds, but despite being able to look back on 10yrs of experimentation and evolution of technique, it's heartening to see that good old fashioned human stupidity and laziness can overcome such foolish notions as providing regularly updated content, building communities and providing genuine value, and move straight on to the 10m x 10m spinning neon atrocity....

4. First Fever
Hand in hand with clueless corporations, though deserving of it's own listing as it extends far beyond the big real life companies, is the desire to be first. It doesn't appear to matter what at, but dammit, you just gotta be first! "Clueless Twonk Inc Are First Walrus Tickling Company to Enter Second Life" and similar headlines get deleted from my inbox almost by muscle memory now. What truly amazes me here is peoples inability to see that this type of idiotic posturing jumped the shark quite some time ago.

5. Rock Star Designers
As when the web was young, there is a tendency among corporations to leave everything, including public relations, promotion and community management to the people hired to build out a presence for them. Some of these firms have people that specialize in different areas for just such purpose, but as I've remarked before, more often than not, the corporation in question would be better advised to hire a different, specialist company for such tasks. We see the designers of builds trotted out like prize pony's in corporate press releases and being charged with promoting events on corporate sims, which often just means announcing on the designers own email list or group. Personally I find it annoying, but let's lay blame in proportion shall we? 70/30 weighing worse for the corporation for not doing its inworld homework to the extent of being able to work this stuff out inhouse, and lightly(ish) on the designers for not having the balls to tell the client their plan sucks, or that they themselves cannot possibly be experts in every conceivable field.

6. If You Spam It, They Will Come
Search in virtual worlds, particularly Second Life, sucks beyond all possible belief. If we wanted to find the newest listing each time, rather than the best listing, and people were not naturally inclined toward the tragedy of the commons style of community responsibility when it comes to free traffic sources, we'd all be ecstatically happy with our results. As it is though, Search is truly like warping back 10yrs to pure keyword algorithms that only needed a title tweak and a bit of keyword stuffing to send you rocketing to the top of the pile. As a result, its very easy to find stuff, but not very easy to find good stuff.

7. Selling Picks and Shovels
Though the press has recently turned on virtual worlds, as my friend Joel notes here (the inspiration for this post no less..), the gold rush in Virtual Worlds is still in full effect. We're just doing it a little quieter at the moment. In any gold rush, the ones that are really guaranteed to profit are not the gold miners, panning through grit to find nuggets, but the ones selling the picks and shovels. In terms of entire worlds, we've seen a few different kits come out recently, including Icarus and Multiverse, who are frighteningly keen to stress that they're not just for games! but virtual worlds too! What we havn't seen yet, but must surely come, is the 3D equivalent of the CMS. Oh I know you can get prefab houses in Second Life, even ones that you can build yourself with different floors jig-sawing together and the like, but we've not seen anything approaching the kind of functionality and flexibility required to cause a real shift in the way we work in virtual spaces yet. I hope we see it soon, when content becomes easier, so will adoption rate and retention levels.

Despite firmly believing that in many ways we've taken great leaps backward, in our coming forward, on the 3D web, i remain optimistic. There are talented, creative minds working 24/7 on this stuff, and barely a week goes by without the landscape shifting just a little bit. I remain a believer, a fan, and I hope, one of the 'doers', in this space.

Have more points to add? Think I'm talking crap? Say so in the box beneath...

The Second Life Exchange Commission met last night, and came out with this official statement

The Second Life Exchange Commission (SLEC) has been closely investigating the recent issues that surround the recent theft at the World Stock Exchange. It is our policy that we will not make public statements based on speculation, we will only deal in facts.

At this point, we have confirmed that the theft has occurred and we believe that this issue clearly shows that independent regulation is a necessity in order to protect the investing public.

At this time, there are several questions that have not yet been answered to our satisfaction. We are confident that the issue will be resolved. The SLEC will only support the exchanges & companies that are willing to work with us toward our mission of full disclosure.

We caution investors not to panic since this is an issue that faces Hope Capital Limited and should not directly impact the balance sheets of other listed companies. We believe that investor confidence has been decreased however, and we expect it to remain so until the WSE takes actions to conform to the standards required by the investing public and set forth by the SLEC.

We will continue to monitor the situation and update our position accordingly. Please see our website for current information: http://www.freewebs.com/theslec/

The statement was work of TraderJohn Susa, SLEC Chairman, and at least some of his appointees, Patrickj Ah (CEO of CGI, listed on WSE), Marc Attenborough (CEO of NDX, listed on the WSE), Maelstrum Baphomet (COO of AVIX), and Rodders Holgado (founder and CEO of 8 Dragons Bank, listed on ISE).

The meeting included one big surprise: LukeConnell Vandeverre , CEO of WSE, showed up. Much to the disappointment of the many members of the SL press in attendance, however, he showed up merely as an observer of the meeting, and declined to answer questions. His statements did not extend beyond expressing a willingness to “keep an open mind with the potential to work together [with the SLEC] in the future,” and directing us to official statements already issued by the WSE, such as this one at http://www.wselive.com/research/announcement_detail/1951:

Just prior to closing down the WSE for updates, that include WSE 3.0, I noticed a large withdrawal by an avatar with no history. I then closed the WSE immediately and began to investigate. It appears that a past employee of Hope Capital, who assisted in fixing previous bugs in our ATM, had decided to try and use their inside knowledge of our ATM communication channel to their advantage. We can confirm that there is more than one avatar under investigation which are possibly controlled by the same person in real life. A detailed announcement will be released soon.

Linden dollars were withdrawn from the WSE by the avatar in question; however, there are a number of interested parties investigating the situation. We are hoping that most of the linden dollars will be returned.

WSE 3.0 is progressing well and should be released soon. The security of WSE has now been setup so that only the real life developers working for Hope Capital will know key site details. As part of the new WSE 3.0 update we were intending to increase security of the WSE ATM, along with installing Risk API supplied by Linden Lab. This could explain why the avatar in question tried to take advantage of their knowledge before we started the update. The WSE is financially stable and there is no foreseen security related risk to the WSE in future.

We are almost ready to release the latest updates which include an improved database structure, application improvements, and the full integration of the World Internet Currency.

The World Internet Currency (WIC) will provide the majority of Internet users with the ability to trade on the WSE.

The World Internet Currency will act as one fictional currency in both the real and virtual worlds. This will encourage growth in the virtual economy and provide everyday Internet users with the ability to invest in its future.

Connie McMahon of SL-Newspaper provides a comprehensive summary of the meeting at http://sl-newspaper-bnc.blogspot.com/2007/07/exchange-commission-chief-m..., emphasizing TraderJohn Suza’s personal belief (not an official SLEC statement) that there will not be a severe run on the WSE.

My own contribution to the meeting was to propose that the SLEC construct a list of specific disclosures they would like Luke to provide, and a deadline for providing it. For example, SLEC could ask Luke to report the current cash balances of WSE Huet (the account from which withdrawals are taken), when the ATMs will reopen, the cause for the repeated delays on reopening, etc. The SLEC would not “require” the disclosures, but would be able to state publicly their concern if the information is not provided. Investors can decide how reasonable the SLEC’s requests were, and draw their own conclusions from WSE’s response.

Analysis
The SLEC primarily emphasizes the need for regulations that are developed in concert with the exchanges, a desire for more (but unspecified) information, and that the immediate financial damage is limited to Hope Capital Limited (HCL), the banking arm of the WSE.

The last point of emphasis is an interesting one, because it points out a key difference between real-world exchanges and SL exchanges like WSE: the WSE (like AVIX and ISE) serve not only as exchanges for raising capital and trading securities, but also serve as banks for investors, who deposit cash into WSE, and then use that cash to purchase shares. The L$3.2 Million withdrawal is really just a run-of-the-mill banking embezzlement.

The SLEC is correct to note that the theft “should not directly impact the balance sheets of other listed companies.” However, all WSE investors may worry that they can’t withdraw their funds. If investors lose confidence in the banking arm of WSE, they will have to liquidate their shares in order to withdraw cash from WSE control, which will affect the prices of all shares. This may well lead to the shares being undervalued (relative to the firms’ true assets and dividend potential), with the undervaluation reflecting a discount for the risk of leaving funds in WSE control.

I expect many readers will find the SLEC’s response rather timid, and may well point to the current board/appointee composition, with heavy representation from the exchanges and companies listed on them. A repeated joke at the meeting was to question whether TraderJohn is simply an alt for LukeConnell. (I can put this one to rest…I have spoken with both through Skype, and unless Luke is a master of Chicago dialects, they are different people.) But like most jokes, this one points at an important truth: the SLEC is struggling to determine their relationship with the exchanges. Naturally, the people who are interested in regulation will have close ties to the exchanges and listing firms. Also, SLEC doesn’t have any power to impose standards upon the exchanges against their will, even if they wanted to. The exchanges could simply ignore the SLEC, leaving the markets no better off than they are now. Thus, ‘conspiracy theory’ isn’t the only reason for the SLEC to want to cooperate with the exchanges.

A second thread of the discussion centered on the role and motivations of Mystik Boucher, who first reported the scam on her blog, and then provided interviews to various reporters, including me. (I believe I was the first to report her accusation of a coverup.) TraderJohn even suggested that “she does indeed appear to be working hard to kill the WSE.” I think the whistleblowing/coverup dimension of the story highlights the difficult position of regulators (in RL or SL) who are worried about investor/depositor panic. Demanding public reporting of risks reduces the risk of runs in the long-term, by forcing firms to maintain good policies, but can cause a run in the short term by inducing panic.

The SLEC is also struggling to determine the forms of regulation that they can and should impose. Regulations could include security requirements (e.g., limited numbers of people who can modify key software), requirements for minimum cash reserves (to ensure resilience against bank runs), and/or disclosure requirements for both the exchanges and listed firms. Disclosure requirements are likely to be the easiest to construct, and they need not be enforced by anything more than a statement of whether an exchange has met them. As I argued in the SLEC meeting, investors can draw their own conclusions, by assessing the reasonableness of the SLEC’s requests and the firms’ responses.

As it is, WSE has so far provided only the most limited disclosures, and the ATMs are still unavailable for cash withdrawals, and apparently will not open until noon SLT on Friday the 27th. When that happens, we will see what conclusions investors have drawn.

There's a very cool demo of some neat VNC tech being used to put Second Life within Second Life over at Dalien's blog. It seems he has got TightVNC powering the little demo you see in the picture here -- that's an Second Life inworld media texture showing his exported desktop in real time. Pretty neat huh?

Dalien has instuctions for testing this setup at the bottom of the post.

Thanks Mike!

Municipal staff for the city of Boston, MA are planning not only to replicate several famous city landmarks in the virtual world of Second Life, but to also make many of the city's services available there as well. The space would be used for residents to speak to city councillors and for neighborhood groups to hold meetings. The efficiency of doing these things in a virtual world versus the real one may be questionable, but that's something the planners themselves have acknowledged:

City officials working on the project concede that paying city bills or visiting with officials at a virtual City Hall in Second Life may not strike everyone as more effective than more conventional interactions, like paying through the city's website or sending e-mail to city councilors. But they say the novelty of Second Life could entice more people to participate in real civic life. The virtual city could be used to promote tourism, or to gauge public reaction to proposed new developments, they said.

They've set aside another six months to finish development and plan on making the virtual environment an ongoing project for local Emerson College. The focus here is on attracting youth to the city and making Boston as much of a technology hub as possible. Other cities will surely be watching to see if it pays off.

Ian Hughes over at the IBM Eightbar blog just posted this cracking video of their two week long stint in virtual wimbledon. If you missed our Things To Do tour of the SIM a week or so back, watch the video, it's the next best thing...

According to German Second Life blogger Tao Takashi, Linden Lab, makers of Second Life are to put in place a system that will allow individual countries to "define which laws apply to their residents". The news comes from an interview with Linden CEO Philip Rosedale in the German magazine Focus. As an example, he said that Germany would be able to ensure that only over 18's were able to enter the virtual world.

In the subsequent conversation on Twitter, Veejay Burns speculated that this may have all come about over a new privacy law about to be passed in Germany.

I can't imagine it being terribly effective. And Linden, as usual with anything server related, are not putting a time frame on implementation.

I've remarked more than once that the virtual world of Second Life reminds me of the web circa 1995. With its frontier like feel, marauding griefers, flashing neon spam, spinning logos and easily gamed Search tools it really does feel like stepping back in time many ways. You can add to that corporate confusion and academic head scratching. Hell even Second Life's "newspapers" seem to be straight out of 1988, more akin to ezines being published with desktop publishing software than the conduits of information they could be if the last 7 years of publishing, information and communication innovation hadn't apparently passed them by. For all of it's backwardness though, I firmly believe that it, or something very much like it, is the future of the web. You can count me amongst the believers, albeit with a few reservations.

I've also spent time over the last few months finding out about other virtual world projects, 3D social spaces and many things in between. I've had the priviledge of speaking with people like Trevor Smith of Ogoglio and discovering Raph Koster of Areae and talking to various other open source projects. I've even gone as far as to forsake my beloved Linux box in favor of a Mac so that I can explore even more worlds. Why? Because I'm not certain that Linden Lab, the makers of Second Life, will be the company that ultimately gets us to Gartners predicted 80% virtual world usage.

Neither it seems, is Cisco Systems Christian Renaud, who in one of the most important blog posts we've seen on the subject in months, goes into great details on the state of play in the business of virtual worlds. Where are we now? Right back at the beginning, right back at the BBS.

Christian asserts that the current state of play is one where "successful early entrants will attempt to fortify their position as much as possible against new competitors", which is what we see with Linden and Mindark, makers of Entropia Universe. It's also one in which "underfunded startups and early casualties will start agitating for open standards between worlds", see Ogoglio and Croquet. One thing is for sure, a walled garden approach will not win out long term. He knows it, I know it, you know it and Linden know's it. Despite having repeatedly stated that the server code for Second Life will go open source, that isn't going to happen anytime in the near future. And this, leaves the whole field wide open still.

In fact, we're nowhere even close to what for now remains a utopian dream of an open Metaverse. One in which your Avatar can travel, with belongings and wallet, to virtually any other world, unhindered by proprietary standards, closed systems and incompatible software.

According to Christian, the timeline will pan out something like this:

• Right now we have one major player, few minor
• Entropia's recent China deal could be a game changer
• One year from now, 3 or 4 major players will be competing for customers on many fronts. They will also discover that a large part of their success may rely on how much data from outside of their world they can bring in. Think web services, RSS etc.
• 3-5yrs from now, attrition and consolidation will have boiled the market down to 2 or 3 big players. Customers are demanding standards, and interoperability
• Adoption = 20% Gartner got it wrong.
• 5-7 years from now, there will be a "rich immersive standard" with Avatar portability, but the major players, like Netscape and Microsoft before them, will snipe at eachother with proprietory extensions to those standards at the expense of users for some time to come.

Personally I think 5-7 years before we see a "rich immersive standard" is over optimistic, but hell I'm game, and good on him for being brave enough to post such a detailed prediction of the future of the 3D web.

There'll be a lot of pain before this space matures, but we live in interesting times.