Five SL Bloggers Respond to Linden's xStreetSL Acquisition: Monopoly, Good Business, Bad Site, Bye Bye Land, Malls?

The Lindens announced their acquisition of the virtual e-tail site xStreetSL only days ago, but it's already featured on the official homepage.  (Provided you're logged onto the site, that is.)  Reaction through the Second Life blogosphere has also been immediate, and widespread.  Here's a small sample of commentary:

Metaverse developer Caleb Booker is jubilant at the news, describing it as a moment where the Lindens start treating their company like a business.  "Up to this point every virtual world on the web except Second Life has had a means to purchase virtual goods in a central marketplace," he writes on Business in Virtual Worlds. "It has actually been yet another barrier to entry for newcomers when they log in, say 'OK where do I buy stuff?', and the answer has been 'Oh, you kind of look around.'"

Second Life businessman Peter Stinberg, who made up to five figures in revenue from sales on xStreetSL and onRez, isn't happy with the move:  "From a business person's point of view I am not too happy about this turn of events," he writes for Rez Magazine. "The reason behind this [purchase] is most likely the wish of Linden Lab to control the largest third party currency exchange... buying OnRez and SLX borders to a monopoly, and I firmly believe that monopolies are bad."

Steampunk creator and scripter Ordinal Malaprop is displeased that the Lindens have focused on incorporating xStreetSL, versus onRez:  "SLXstreet has at the moment an appalling last-century User Interface, almost completely unusable," she writes on her blog. "In many cases I simply refuse to list my products there as the small financial gain that might result is outweighed by a factor of a Hundred by the Pain caused by navigating it."

Metaverse developer and SL entrepreneur Hiro Pendragon believes this spells the end of most in-world malls which fail to adapt:  "Say bye-bye to your biz unless you innovate," he writes on his blog. "I believe shops will maintain their headquarter shops in world, but malls that offer little more than collecting different vendors together will get far less traffic." 

Metaverse developer and intellectual Gwyneth Llewelyn concurs with Pendragon's point, and sees economic changes likely caused by xStreetSL as a threat to the Lindens' main revenue source: virtual land. "Content creators are huge landowners," she explains on her blog. "They make LL happy with their tier. They are also attracted by land rental managers to keep a thriving community happy with their business. This all might disappear very quickly, and SL might become a shop-less environment.

Which is closest to your opinion?  And which seems the most off?

Update, 1/25: Bumped up, title slightly tweaked.

Comments

[Tuna Oddfellow]

I am skeptical that this will be the end of virtual commerce as we know it. I think it will be painful to many vendors for the first few months. In SL we are always adapting to changes. Frankly, change helps us to grow.

People do need to create creative ways to encourage people to shop at there stores. This has always been a challenge. It's been easier to search on On Rez and Xstreet SL then it is to navigate the malls.

[Mo Hax]

This is just a natural step in evolution of the content economy toward the real economy. Like Caleb points out, it is just easier in the virtual world and the real world to shop via a web interface which provide search capabilities no amount of organized wandering will ever match. I talk about that in my own post.

But then again, I am a kill-it-and-bring-it-home guy rather unlike the graze-nibble-gather women I have shopped with in both worlds.

Virtual malls--like the real ones--with the best atmosphere will dominate because of the experience and possibilities that come with 'grazing' there.

[radar]

Good grief, every time anything changes, it's the end of the world and all is bad and evil.

I think there could be some negatives about this, but there could be a lot of positives, and no, I don't believe for a minute that it will kill in-world shopping. As for malls, the good, well done collections of stores from thoughtful sim owners will be fine. The junk ones that are a collection of crap from people who can't afford real tier will hopefully become less, though I seriously doubt it.

An in-world presence is always going to help somewhat, IMO, if people know about it. People like to try stuff out if possible or see demos before they buy. It's just how the world works.

[Erbo Evans]

My own take on this is that this is a distraction for LL, keeping them from doing what's really important...which is: stabilizing the Grid. Until they actually stabilize the Grid, nothing else really matters, and they're in danger of "fiddling while Rome burns."

[Tateru Nino]

I don't have sufficient information to formulate an opinion at this time.

[Takafumi Farina]

Am I the only one that sees this as a positive move? Shopping can be really painful at times in SL depending on the store or location.

I think this is better for the overall experience of incoming newbies as well as veteran shoppers.

Another virtual world, "There" has had a browseable store since the beginning.

I do agree with some of the comments that onRez is a much more beautiful store format than XStreetSL. I hope Linden Lab will redesign XStreetSL in the future.

[Tabliopa Underwood]

"Which is closest to your opinion?"

Hmm! Im not a metaverse developer or a businessperson or a creator even. Im just someone who buys stuff. So umm! none of them really.

As a consumer I think is great though. But then in real I shop in supermarkets and malls and buy takeaways from McDonalds (with coleslaw and Diet Coke :)) and wear Converse trainers and trackies and tees mostly so I maybe not typical of your average user.

[Sigmund Leominster]

From the perspective of Linden Lab, it is a good move, and much as folks in Second Life seem to think they own the company, they don't. For LL, this was a clear opportunity to expand the business - something Mark Kingdon made explicit when he took over last year. Acquisition is a normal practice for businesses that want to grow.

SL residents traded some $360 million over the past year, so you tell me why Linden Lab would not want a slice of that. And LL's purpose is to make a profit, not be warm and fuzzy. Sorry, but that's what business is all about. Feel free to check out an extended discussion in my daily blog post.

As a consumer of SL goods, all I can contribute is that I have used both the web sites and found it easy enough to buy things. I don't know why some folks appear to have difficulty typing and clicking but you don't need an IQ above 50 to use either web page. Of course, if hitting a "Search" button is too complex...

[Uccello Poultry]

A feeling of betrayal was my first reaction. On my blog I wrote that "the situation reminds me of the plight suffered by my Irish immigrant ancestors who worked the mills and mines, paid in Scrip redeemable only in the Company Store, essentially no better than indentured servants." The acquisition of the independent services gives more power to The Company. Rather then spend the money to solve asset database server issues they chose to spend money to monetize Residents, further relegating us to the role of revenue streams rather than having us participate in the "Your World, Your Imagination" partnership.

I agree with Hiro Pendragon that shopping malls will suffer unless they are innovative or closely linked to a community such as you see with Rocket City FurMeet, the Isle of Lesbos, and the Raglan Shire malls. The loss of OnRez and the elevation of XStreet to being the official shopping service could lead small-scale merchants to abandon an in-world presence in favor of being only virtually virtual. What would this do to the economy? What would this do to the culture?

Smarter people than me likely have answers to those questions just like they (i.e., Peter Stinberg ... "Hi, Peter! Love your blog!") are much more competent to judge issues like trading Linden Dollars. From my point of view (very small merchant; active shopper; experienced Resident) not having an independent source where I can trade my currency is not a big issue. But rather I liked being able to keep a sizable portion of my funds tucked away off The Company's notoriously unreliable servers. I've seen my Inventory whittled down by server issues and I full well expect to some day see my Linden Dollar balance not recover from a 'Loading ...' state.

The upside of the news? Maybe people using in-world search will find my shop and buy more of my products (Look out, Peter! I sell upwards of L$600 of stuff on XStreet each month). Sure, I'm not trying hard to make a living or earn a lot of money ... mostly I build what I feel like building and price it low to recover my costs and a wee bit more ... but some money is nice. And being able to send purchases to anyone in-world, not just registered service users, will be wonderful. Or will anyone miss having go to a terminal or find a place to rez a wallet to deposit money for a purchase?

Up or down, right or wrong, good or bad, keep this in mind: We don't have a choice. It was taken away from us.

[Ann Otoole]

Say what you want but maybe the journalists need to ask the merchants and ignore the psychics.

My sales doubled the first day. And doubled again the next day. In world and on slx. (I never really cared for the negative sounding xstreet name)

How many times have we had to adapt to change? Change is part of life. If you are so unhappy with Second Life then you need to take a long break from it.

As for all the sl psychics ranting and raving, some of whom publish magical numbers and percentages yet cite no source for that data, they need to have a tarot card and palm reading sign up so everyone will understand the validity of their opinions.

As long as Linden Lab does not mess with the search system on slx then this merger levels a lop sided playing field for merchants and the "big names" in sl are not all seriously pleased since their bot advantage vanished overnight and suddenly people can find more and very superior products at greatly reduced prices.

It is a good thing but they need to dump the xstreet anme and call it what it is: Second Life Shopping. Or shopping.secondlife.com. It will eventually get there anyway so why put it off?

[Seven Shikami]

As long as they bring Xstreet's user interface out of the stone age and do away with the percentage cuts off your prices, I'll be cool with this. Both of those things felt completely archaic to me, and neither would fit the concept of being the polished and professional web front-end for SL shopping.

Strip malls may be shut down by this, but plenty of products really need to be seen in-world in order to be bought. My arcade games, for instance, are better off played for yourself rather than just staring at a picture or two. Vehicles, hair, archetecture, furniture, a lot of things can benefit from in-world 3D displays and centrally organized shops.

[Nexii Malthus]

Products such as avatars, clothing and other appearance stuff + gadgets I guess too, were always the only items to really benefit having a web shopping experience anyhow as pictures could contain the information necessary towards the customer. But other products such as games, vehicles and other immersive content can only be truly viewed in-world.

Personally speaking I greatly prefer that Xstreet was chosen because of its attitude for Product Quality, which is far far superior to OnRez's product listing towards 'Product Count Barons' and the OnRez UI was totally unintuive at that. Xstreet could do with a facelift though on its user interface, but is functionally perfect.

[Doubledown Tandino]

I'm with Radar and Tataru on this one. This is big news, but its anyone's guess on how it will impact the economy and inworld sales.

I STILL plan to only use Xstreet about 5% of the time just as I always had. There's thousands that do the same.

And every change in the SL world does NOT cause ripples in the space time cortex. It's only bloggers with opinions that cause the ripples.

[Ciaran Laval]

I have concerns about the land market in this, especially short term. How many prims do you need for a SLX box?

Ironically the concerns I have are similar to the concerns I hear from RL brick and mortar stores regarding web shopping, where shopping areas disappear or are replaced by crappy £1 stores and charity shops. People complain that this undermines local communities.

The big difference here though is that tier is the backbone of the Linden Lab business model and if that takes a hit Linden Lab are going to need to find ways of generating more money from everyone else, and that quite frankly could be a very sticky wicket.

[Isadora Fiddlesticks]

I think Caleb and Sigmund both have a point here, that it is a good thing. The only thing I regret is that this could have been done as soon as LL decided to introduce economy in SL. That way, the things we are so used to having now would never have occured and most of us wouldn't have to complain about the changes and just be ONE with regards to opinion. It's almost always that we never have a unanimous approval/denial over SL issues.

[Iggy O]

Ordinal Malaprop, whose pixel-and-mortar shop I visited recently, is correct about the bad interface at xStreetSL. Onrez's is far superior.

Hiro's prediction seems probable. The only advantage I can see for in-world shopping would be for items you need to see, perhaps seek one-on-one help, before purchasing.

Having just tossed down 1500L for a nicely built motorcycle in-world, it REALLY helped to meet the developer in his shop, see his bikes in 3D, and get my questions answered. I'd been looking in-world and at both online marketplaces. In fact, after talking to the designer I learned about a new bike coming out soon--and saw the prototype. So he'll make a second sale from me.

Lag or not, sometimes you have to see an item. But vendors in mall are little better, for prim-based stuff, than is an online market. So vendor-malls are going to take a hit.

[Arwyn Quandry]

I'm really hoping that this incorporation will allow teens to buy and sell from the two sites, expanding our tiny economy. A lot of shop owners on the TG could be making quite a bit more with their work than what it's possible to make right now. Few teens have money to buy from some very talented CCs that are stuck on it. If LL did allow in teens to participate in the marketplace, I do worry that it would trigger a rise in content theft on both sides unless there was some kind of merging between the grids.

[Balthasar Bookmite]

I understand that LL wants to promote selling stuff, well I'm closing my business! Thanks to no vendors on SLX, ugly website, and commission! :D Big sale at Lofty Lighting! :D

Is there any way you can get M on the phone about this because i don't see this as a positive? And doesn't M want to take SL more business like instead of trying to make it a place where creators have rights?

Oh well look for returning in-world residents to go down.

Balt

[ol]

I think it's a good thing, because even if fun it's very difficult to find clothes you want in SL.

I have 2 suggestions:
1-Shops in SL should use 3D models, not 2D display, maybe this could be a usefull use of bots

2-each product sell in xStreetSL should have a link to its SL shop

[Aliasi Stonebender]

Y'know, it's refreshing to be an SL old-timer, because this reminds me exactly of when GOM was bought. And when telehubs were removed. oh, and when they added classifies, and, and, and...

My predictions: huge lag malls go out of business. LL balances out the lack of tier with the increased currency exchange fees and possibly listing fees. Boutiques of related stores continue to do well.

I see this as pretty similar to the removal of telehubs and all the telehub landowners complaining that their giant avatar traps weren't viable any more. Unsurprisingly, SL survived this because those traps really sucked.

The current atrocious inworld search for products needs something better. XSL wasn't much, but it was slightly better except insofar as very little was actually listed on it. This isn't the complaint of some techie who is mad I can't type "fun" and have it read my mind, this is someone who has typed very clear phrases and terms into search and got nothing even when I KNOW it to exist.

[KoinupBurt]

I think that the acquisition could be very valuable for LL business and revenue....
but it could be also very useful to expand the Second Life user base...
right now, as pointed out in other comments, it is not easy to shop in 3d environments and mainly for newcomers it is not a user friendly experience....
Anyway, I think that in order to maximize the effect of this deal, Linden Lab should look into the 3 following aspects:

1) Login:
If you want that more and more people will look into the shop experience in the xlstreet website (or wathever it will be called), it is important that you allow them to use the same Second Life credentials, they use for login into the grid...
The shop experience have to be easy, fast, immediate....and similar to the shop experience you have in other virtual worlds (IMVU)

2) Integration
The integration of the marketplace in the secondlife.com domain is important, but it is not enought, mainly is not enought for the new people just signed up in SL... they probably will be loooking for something in the client interface....
the shop experience have to be included in the client, with bottons, link etc...etc..

3) Delivery:
right now the delivery of second life stuffs from the website to the avatar is quite controintuitive.....
if you look at the other virtual worlds, think mainly to there and imvu, you can see that delivery from shop website to your avatar is easy, immediate, effective...
you don't have to learn how to manage vendors, atm point, etc....
In IMVU, for example, you go in the shop page, buy and in about a second the items are in your inventory, or even worn by the avi....
this improve the learning curve and keep more users around.....

[rightasrain]

most of the merch on SLex was old/ancient and their search only marginally better than SL. OnRez nice enuff technology, but not much action there. My guess is that LL bought it all cheap (or should have). Real issue is why not make it easier to sell inventory inworld? Using a "magic box" is a tedious process and require too much work to maintain webside listings.

SL still does not make it easy to know your sells--you need to login and pull it all yourself. Er...what about...er sending an email or--giz whiz--allowing an xml call? Ooops...sorry that is what a technology company would provide.

In general the double acquisition looks pretty random. If LL forces people to switch to the OnRez platform they will discover who little merch is actually maintained by active SL users. Switching to the better OnRez platform will probably wipe-out 95% of the SLex listings cause no one is gonna move their stuff.

[Khitten Kurka]

I agree with Erbo!! SL should spend more time focusing on making the grid stable. Acquiring XSL and OnRez, IMHO, is not a high priority to the average user's experience (heavy or light use). I am saddened to see these independent sites go and wish SL would just get the basics right before spinning off and worrying about things outside the metaverse.

[Arcadia Codesmith]

Anybody can prognosticate, and even a broken clock is right twice a day.

That in mind, I'm trying to wrap my head around the big picture and guess where we're going;

1) The acquisition of Xstreet and On-Rez has little immediate impact, until web-based search and buy is more tightly integrated into the client.

2) Teen grid gets integrated with the main grid.

3) LL has full control of all major advertising / merchandising channels and uses that control to surpress "objectionable" content and enhance the main grid for the potentially lucrative teen market.

4) Adult-content and "fringe" communities are further marginalized and segregated in a bid to make them less visible to teens, educational and business users.

5) Said communities migrate (or are forcibly relocated) en masse to open grid sims or segregated SL servers.

6) LL revamps Xstreet as a cross-platform market, monetizing content trasfer between grids as a major revenue stream to replace commericial tier.

Or alternately;

1) Virtual life carries on as normal and nothing much changes.

Take your pick. I'm not sure that either outcome is more likely than the other.

[Veeyawn Spoonhammer]

I'd like to echo Ordinal's comments. The experience of shopping on XStreetSL is horrible and leaves a lot of room for independent parties to create a better experience in-world or on the web. It's hardly a monopoly since the data from SL is all available and no one is stopping anyone from creating a competitor.

[Karl Reisman]

Well, the best part of SLX or XSSL was that you could get your lindens cashed out in 20 minutes rather than the 3 days it takes for the Lindens to "p[process Creidt" Sure the interface was old and clunky but it worked and unlike most of the other folks there, I would prune old content from my stor einv entory when it was upgrqded to soemthing new. and On Rezz I could not get. Ordnal is a gearhead and it shows. :-)

What do I think will happen? I am not sure, as I dont predict the future well, hoowever I am worried about a consolidation of the sites will result in a monopoly of processing Lindens to Dollars. and therefor price hikes. I don't think it will kill inworld shopping as it hasn't killed it yet. I will make about 54,000L a month selling planes on the various vendors on the aviation themed sims. on XSSl, I am selling maybe about 6000L a month and its mostly 120L sculpted Prim hats, and the occasional big ticket item. So that is anecdotaly why I don't think in world shoppign will be killed by the web.

SLX was always fairly agressive about keyword searches for trademarked names, which is why you see few America Car Marks, and fewer U.S. Aerospace replicas due to agressive IP protection by Boeing and Lockheed Martin. Its why you see mostly foreign Designs replicaed in SL.

It looks like Apotheus, was made a linden as one or two of his staff from XSSL, so that I think the transition will be fairly seamless, Onrez I don' know about.

Finally, I think that the aquisition of these websites, are not only for the monopoly on currency exchange, but to also get a cut of each sale to "Other grids" eventually. Which would be good for me, as I like expanding my market, but still I prefer to seel in world.

-Karl