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Monday, October 29, 2007

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Gwyneth Llewelyn

I await eagerly when the 'segregation' implied in the "mixed reality" name is finally dropped when it's clear it doesn't really make any difference... doing something in SL that attracts people and makes it interesting doesn't depend on the "brand name" that's behind the sites... but only in the ability of those building — and most important, maintaining it — to make it grow.

In fact, a few brands are getting much cleverer: instead of creating their own virtual presences, they're simply sponsoring existing, successful ones. So where in the chart would they be listed?

On the other end of the chart, there is anedoctal evidence on the contrary approach. My country has three major communities in SL (and perhaps a few minor groups that split), which aggressively fight for bringing avatars to their camping chairs, uh, I meant events. There are an estimated 70 islands out there belonging to each of the three communities. Although they were created from the bottom up by enthusiastic residents, employing other residents to build for them for a few L$, the plain and simple truth is that all of them have tiny companies or organisations iRL. Sure, they might be 2-people-partnerships or non-profits with a handful of members. Or they might be higher institutes of learning (universities, colleges) that simply allow their students to spend their time creating a whole community to attract people. What are these guys? "Mixed reality" or "native"? If you ask them all, they'll self-classify themselves as "native"! But when you walk across their islands, you'll see here and there a RL ad or a small building for a RL company that might have a tiny 'presence' at a corner, which helps to pay the tier bills and fund the camping chairs.

So what are these guys? IBM, of course, is a huge corporate giant and I can understand that they can safely be labelled a "real company" and having a "mixed reality site". What about Mama & Papa's Grocery Store, with just 2 partners and a revenue of a handful of dollars per month, but that might be running as many public sims as IBM, although they get their buildings done by regular residents (and not employees or workers for metaverse development companies) and pay them in L$?

Sure, I know this is anedoctal evidence. But as time goes by, these labels won't stick any more. If Carl Metropolitan registers as a single person partnership, does that make the whole of NCI a "mixed reality site" instead of a "native" site? Carl is also considering being sponsered by RL-incorporated organisations (never mind their size). What does that turn NCI into — an advertising agency running popular sims to be able to sell ad space? If Desmond Chang actually opens up a not-for-profit to run his sims of Caledon (and thus gets a 50% discount on further sim purchases), does that "turn" Caledon into a "mixed reality site"? More complex than that: if a RL company hires space on one of the "native sites" regularly to launch their own services there (and get the media splash from it), what does that mean for the "native site"? Are they "selling their souls" to the corporate sharks, or simply treating them as another source of revenue? How will they be listed on the charts then?

I believe that the distinction right now is too blurry. In effect, it seems to go along the lines of who is paying taxes in RL! If you pay them, you should be a "mixed reality site"; if not, you're a "native site". Interestingly enough, the UK Revenue Service is hinting that L$ transactions might become taxable by the European revenue services "soon". What will that mean for half of the "native sites" ran by European users — will they all drop from the "native sites" chart?

It's far better to take those sites at face value, ie. the number of people they attract — based on how well they're planned, and how good they are at running regular events, placing camping chairs, and, well, offering good content for sale and/or consumption. "Who" is behind them becomes more and more irrelevant as time goes by.

In fact, with hundreds of thousands of "SL companies" operating right now, if I were part of a RL government, I'd attract them to get incorporated in my country with very low taxes (like Letonia's 1% tax on 'foreign' companies), just to be able to use that argument as a huge world-wide media splash! :)

Alas. I read too much science fiction. :) drops Neal Stephenson's Cryptonomicon into the trash can

Tateru Nino

Well, from my primary perspective I don't see a distinction between mixed-reality and native, per se. That is, we're all on the outside, creating things within SL, whether, as entities we're individuals, partnerships, corporations or whatever.

From another perspective, it's interesting to see the psychological differences in the divide between larger organizations who have buckets of money to support their vision, and individual SL users or SL non-profits working on shoe-strings and voluntary time - and see which is really succeeding.

I think it's pretty clear who is - there *is* a distinction there. Even if it's one that is hard to define, and artificial.

Gwyneth Llewelyn

There is definitely a psychological difference in perceived "buckets of money" coming from corporations supporting their vision. Reality, however, is still blurry. The Greenies sim was far cheaper to create than, say, maintaining Caledon — and those are just anedoctal cases.

Sure, there are rumours of companies pushing millions and millions in SL. However, again, these are actually a handful of cases. Sure, CBS's investment in SL was of "millions". IBM's certainly was (if you assume labour costs from hundreds or thousands of IBM employees, who had to be paid to work in SL). I'm also pretty sure that there are many other examples around.

On the other hand, most of the ten thousand corporations in SL have not invested that much — only a few thousand dollars. Perhaps a dozen or two thousands. When compared to what people have paid to support and create several of the most popular places in SL, that's not so much.

I'm not saying that there is no difference at all in "investment"; there certainly is a difference. In my mind, however, the most important commodity invested in SL is "time". Just because some people don't want to get paid for their work, it doesn't mean that they aren't working! So, while a corporation will know exactly how much it costs — in hard currency — to invest, say, 400 hours building a virtual presence in SL, the question is: are 400 hours enough, when popular sites might require thousands and thousands of hours to make them, well, popular?

Are corporations willing to pay for "thousands and thousands" of hours to attract traffic? Is it worth it? For some (IBM, L Word, CBS...) the answer seems to be "of course". Others tend to believe they can survive on "only a few hundred hours" and come out of SL very disappointed.

Most, however, just rely on different metrics. "Popular sites" run by residents, for instance, can often be measured on how much money/fun their owners take out of it. A shop making US$5000 a month is a success for its owner (assuming that the time spent in developing new content for sale is below US$5000 in hourly costs, of course, which could be spent in another business venture). A popular destination that gives their owner hundreds of hours of pleasure, fun, entertainment, and leisure is far difficult to measure in "worth", but we can at least compare to what the owner is not doing while supporting that place (ie. "saving" costs in paying for cable TV, renting DVDs, buying movies, etc.) — in economic terms, how much SL as a substitution product competes successfully against other entertainment forms.

What about relevant metrics for a marketing department on a corporation? The most important one for them at this stage is "media splash". A one-minute-spot of advertising on prime time on TV is utterly expensive. If you can get an anchor on the TV news talk about your virtual presence for one minute, that'll pay off the investment in SL. Of course, the more popular your venue is in SL, the more likely it is that TV news anchors will talk about it again and again — thus once more saving the costs of paying for ads. On the printed media (or even on the online media!) this is more dramatic — you might get a press release printed, or an article on the press release, and get a quarter page (sometimes even with pictures) for "free" on a major newspaper read by a million people. How much does that cost?

A PR company I work with believes that with a well-planned strategy in SL, a corporation can save a quarter million US$ that otherwise would require advertising to reach the same audience. A quarter million! Now, that gets them quite a lot of islands built in SL, or a virtual presence being maintained successfully for several months, with a very intense level of entertainment.

At the end of the day, I guess that it'll all be about the "psychological" separation between both types. Volunteer operations, most of the time, aren't so interested in the amount of publicity they generate — they're simply happy to exist and provide entertainment to visitors. Others — a surprisingly high number of them! — are in SL to make money out of their virtual presence, and in that regard, they're really not different from "RL-incorporated" companies: they measure their success in how much money they make out of SL, and the measurement is in hard currency, not the abstract notion of "SL as an entertainment substitution product".

All in all, I still think that the real difference boils down to two questions:
1) How much time (unpaid or not) are you going to invest in a virtual presence?
2) What qualified/professional/talented resources are you able to employ to make your virtual presence a success?

There is a trade-off between "time" and "qualified professionals", of course — give more time, and amateurs will do a pretty good job out of it, and work for "next to nothing" (or for free); invest in highly qualified professionals, and you'll need fewer hours, but very likely have to pay more for them. Also a "qualified professional" is something not so easy to define. Running successful events in SL, for instance, does not require a master's degree in PR — a network of (SL) contacts will probably be more important. So a PR expert might charge you an insane amount of money but still be unable to gather enough people to attend an event. A manager making a decision would thus be better off hiring the non-professional PR (in the sense that they might never have a degree or professional experience) but who is very SL-savvy — just like what most SL-run operations do (and with a high degree of success). It's complex. Also, SL is way too young; anyone with a few months in SL is a "veteran expert" from the point of view of someone who has just read about SL on a magazine.

Blurry, blurry, down to the very bottom :)

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