New World Notes

Linden Lab Hastily Launches Authorized Linden Dollar Reseller Program to Allow (Highly Regulated) Third Party Selling of L$

As earlier indications suggested, Linden Lab has just announced an official Linden Dollar (L$) Authorized Reseller Program. Currently, Resellers include AnsheX, Bulido, vForEx, VirWoX, ZoHaIslands, but the company is taking applications for others. These are no longer third party vendors indepedently handling Linden Dollars vendors freely on their own. Rather, as the announcement explains:

These sites are authorized by Linden Lab to purchase L$ on the LindeX and then resell those L$ using a variety of international currencies and payment methods. To be clear: per the Terms of Service, these resellers will not be allowed to purchase L$ outside of the LindeX (i.e. they will not be able to buy L$ back from users and cash people out). The list of Authorized Resellers participating in the pilot program is available here.

This comes less than a week after Linden Lab updated Second Life's Terms of Service to forbid trading of Linden Dollars on exchanges other than the LindeX, Second Life’s official L$ exchange. The whole thing feels very hasty and ad hoc. Here's why:

Linden Lab Reportedly Working on Compromise to Allow Some Third Party Exchange of Linden Dollars

According to Hypergrid Business, a compromise may be in the works that will allow some third party groups to buy and sell Linden Dollars again:

Meanwhile, while some exchanges were being kicked out of Second Life by force, others received a communication from Linden Lab which also hinted at better things to come, also without any specific details. “We have approached several organizations to discuss a potential solution that would allow them to serve their customers within the bounds of the updated Second Life Terms of Service,” said the letter. “We’ll soon blog to share more information about this solution, which we plan to extend more broadly as well.”

Stay tuned, and until then, read more here.

Survey: Is Linden Lab's New Policy Forbidding Third Party L$ Exchanges Affecting Your Second Life Usage?

Update, 5/15: Survey is over, thanks to all who took it!

Linden Lab's new policy forbidding third party exchanges from trading in Linden Dollars (apparently for US Treasury regulatory reasons) has led to over a dozen such services closing down, with the company reportedly sending out warnings to them that begin, "As an operator of a third party exchange, you should cease facilitating L$ trades on your exchange immediately to comply with the Terms of Service". The move has definitely caused some user anger(see this comment thread), but I'm curious how widespread the impact is being felt. Here's a snapshot survey to measure just that.

Results published next week, but please discuss now in Comments below!

Virtual Currency Legal Analyst: Linden Lab Has to Comply With New US Treasury Guidelines or Face Criminal Penalties

Virtual currency legal analyst Alex Kadochnikov adds more context to Linden Lab's apparent move to comply with new US Treasury guidelines by forbidding the trading of Linden dollars (L$) on exchanges other than the official LindeX. As part of the guidelines, the company must register as a Money Services Business, and the penalties for not doing so are pretty steep:

Any company that issues or exchanges virtual currency must register with FinCEN, either by themselves or through their agent. Linden Lab will have to register. Linden Lab issues virtual currency. No surprises there... Once the statutory six month period for when virtual currency money transmitters must register, the government will be able to start prosecuting people who do not comply.

Here come the penalties, stated right in the regulations:

Did Linden Lab Change Its Terms of Service Around Second Life Currency to Comply With US Treasury Guidelines?

Linden Lab has updated Second Life's Terms of Service regarding Linden Dollars, the world's official currency, in a way that will impact third party sites which exchange L$ for real money or other virtual currency, including Bitcoin. In the new Terms of Service, however:

[T]o better protect Second Life users against fraud, the updated Terms of Service make it clear that trading of Linden dollars (L$) on exchanges other than the LindeX, Second Life’s official L$ exchange, is not authorized or allowed.

The given reason seems strange on its face, because Second Life users have been able to exchange Linden Dollars for real currency on third party sites since 2004. (See Gaming Open Market.) If fraud was really the concern, why do so only now? According to SL blogger Vaki Zenovka (who describes herself as a lawyer IRL) Linden Lab is really doing this to comply with new guidelines on the regulation of virtual currencies by the United States Treasury department, which I blogged about last month. Here's the problem, as Vaki puts it:

Want to Make the Most of Cashing Out Your L$? Take Gogo's Advice and Place a Sell Order Instead!

Iris Ophelia's ongoing review of gaming and virtual world style

Recently Juicybomb's Gogo (one of my all-time SL favorite bloggers) shared a very straightforward informative post about the different options that are available for selling your L$ in Second Life. Many of us who have done business inside of SL are familiar with the process to cash out our L$, but if you want to squeeze a little bit more out of your virtual earnings then you might be better served by placing a sell order instead. Here's why:

World of Warcraft Now Being Advertised... on Second Life

Since Linden Lab's running AdSense on the Second Life website, I wasn't totally surprised to see an ad for World of Warcraft pop up there, but it is surprising competing online worlds aren't being blocked from the feed. Then again, it did give me a chance to revive this classic Xzibit meme. Hey, Linden Lab, I know Blizzard has beaucoup bucks, but when are you going to start letting Second Life content creators put ads on the SL site? Rather than, you know, more WoW?

Second Life Mainland Ownership Stays Stable -- But Where Are All the Premium Account Land Owners?

Expert statistician Tyche Shepherd has a new report on the state of the Second Life mainland, the continent fully owned and controlled by Linden Lab, and I see at least two least key takeaways: Unlike private sims, which are rapidly going away, revenue from and ownership of mainland plots has stayed relatively stable. (Between 52,000-57,600 total unique plot owners from 2010 to now, a very small change.) That's the good news. The strange news (unless I'm misreading Ms. Shepherd's data) is this:

Where's all the Premium subscribers who should be owning land on the mainland?

Mainland land ownership is a major benefit to being a monthly Premium member, but far as we can tell, less, not more, Premium owners are claiming their property.

How do we know this? Well:

Second Life Content Creators Soon Able to Advertise on Official SL Websites

Last month after people noticed that Linden Lab was running AdSense on official Second Life sites, I asked, "Hey Linden Lab, now that you got AdSense on your SL site, why not encourage SL content creators to use it too?" And now... Linden Lab is encouraging content creators to use it too:

These ads are a great opportunity for advertisers to reach the large, global audience that visits the Second Life web properties every day, and we want to extend that opportunity to Second Life merchants as soon as we can. For Merchants, advertising on the Second Life web properties will be a new way to get their offerings in front of potential customers, while at the same time making the ads extremely relevant to every Second Life user who sees them.

No idea if my post and this announcement are related in any way, so I'll just go ahead and take the full credit. Actually, no, I'm pretty sure this was the plan all along. And frankly, a great start to adding more revenue streams to SL. Like I said back then:

Yes, Second Life is "Coasting" -- But Coasting Won't Cut It

Nalates Urriah has a really good "state of Second Life" post compiled from various data sources, such as concurrency rates over time, and the number of SL regions over the last four years (above) from Metaverse Business. Based all those numbers, his baseline analysis is this: "The best I can say is Second Life is coasting along... The stats are certainly not rosey. But, neither are they all that gloomy." That's kinda true, but misses a more important point: Yes, Second Life is coasting in the sense that usage has slowed, but not drastically, and that it's losing regions (see above), but not rapidly. From one point of view, that's pretty impressive. Most online worlds lose much more paying users much nire faster, and the fact SL has stayed relatively stable for so long is quite remarkable.

From another point of view (and the only one that matters, frankly), this coasting status is quite serious, and here's why: