De-Rezzed: Despite Popularity, Rezzable (Mostly) Leaves Second Life for OpenSim

An elegy for Crimson Shadows, soon to leave Second Life

Sad news, but not surprising: renowned virtual world experience creator Rezzable is all but leaving Second Life soon. With the exception of Greenies, the UK studio's giant-sized play land, the rest of Rezzable's beautifully realized locations will be gone from Second Life by this month, company CEO Jon Himoff (known as RightAsRain Rimbaud in SL) announced yesterday. Despite a reported 2.5 million avatar visits to Rezzable locations since launching in July 2007, Rimbaud says the company has been unable to turn a profit on the sale of their virtual items, including occasional entrance fees to selected locations.

As regular readers know, Rezzable is a sponsoring partner to this blog, and I count the London crew as friends. But even if that wasn't the case, this would still be personally poignant and disappointing news: I've admired the vision and execution of Rimbaud and his team long before having any financial relationship with them. In any case, Rezzable is not leaving the metaverse, just moving to another district of it; as I mentioned yesterday, the company is actually hiring a developer to help them expand their Heritage Key site running on OpenSimulator, where virtual land costs are much cheaper.

So what is most discomfiting about this move is the questions it raises about the viability of building a small business that caters to and is largely dependent on Second Life's internal economy. As we know, Resident-to-Resident transactions are in aggregate highly active, with well over a $1 million USD in Linden Dollars exchanged daily. However, that figure occludes a more complex reality; take a look at June 2009's spending numbers:

So while some 750,000 or so unique users are logging into Second Life a month, only 465K of them are spending any Linden Dollars -- and less 200K of them are spending $10 or more a month. That's a large enough market to reliably earn a decent income as a one-person content creator. We also know many virtual real estate managers earn an extremely healthy revenue. But is there a market for a business built on providing virtual experiences with the level of ambition Rezzable attempted? Until more Residents spend more Linden Dollars, I think that's far from clear.

Comments

[Harper Ganesvoort]

If spending in world is a function of what you're making in RL -- and the greater majority of us, I believe, are not finding ways to support ourselves in world -- then that will be the state of things for some indeterminate time to come. It'll only when people are feeling "phat" again that they'll loosen up their credit cards in larger numbers, and start buying lindens for spree spending.

People who write about fashion, such as myself and Cajsa and Gidge at It's Only Fashion, are some of the exceptions; we buy (as well as are gifted with items for review) in order to have fodder to write about. But there's not that many of us to alter that graph much.

[Metacam Oh]

Sad day, but whats going on with Rezzable is pretty much mirrored around Second Life.

SL "Sellers" probably not outnumber the "Buyers" and if people are here just to sell to everyone else, who is buying?

Add on top of the outrageous tier fees businesses need to pay Linden, $1200 start up fee and 295 a month? I could lease a brand new car for 295 a month, I can buy a brand new PC for 1200 bucks. The SL economy is a giant ponzi scheme and the money is being floated right up to the top, Linden Labs.

[Tristin Mikazuki]

SL has lost more then half its luster and the Lab keeps pileing on more ... well you can guess lol

SL is pretty much dieing off now
Onward to new frontiers!

[Darien Mason]

I look forward to exploring Rezzable's wonderful builds in OpenSim!

[Iggy O]

Sad news. I love their builds. Still, I'm in SL until the plug gets pulled.

I do hope educators are making Plan B just in case LL were to make the highly unlikely move of closing shop soon. In my case, I'd have the kids explore Heritage Key's Web portal and connected (and magnificent) build in OpenSim, then dabble with Metaplace and OpenLife.

OpenLife's "one big grid" is still around and works far better than it did 6 months ago.

[Robert Graf]

Sounds like Rezzable is making a very good business move. Linden Labs kept tier fees way too high for way too long. Now that there are viable alternatives available I expect to see more of this happening. I spend all of my time in opensim/OSgrid now and refuse to login to SL or buy anything on that grid. I prefer the freedom I find on OSgrid to do and build what I want. Never having to worry that some third party like Linden Labs can come along and destroy everything I have worked for and built. Will the last person in SL please turn out the lights. lol! ;)_~~~

[Sioban McMahon]

I'm sad to see them go. Beautiful sims, but if I'm completely honest, I'd have to say that the items they have for sale aren't what I want to buy for a variety of reasons.

[radar]

They had good builds, but honestly, right from the beginning I never figured out how they planned on making money from them. We used to wander the builds and say "very nice, but now what?"

I don't think the whole problem was with LL and SL. There aren't too many business models that work for companies larger than one (ie, companies that need to make RL coin) in SL or any virtual world. Look at the evidence and the names of those who've tried and failed so far.

[Troy McConaghy]

Can someone explain how Rezzable is making money in Heritage Key / OpenSim? I must have missed that tidbit.

[Doreen Garrigus]

I will miss Rezzable. But I have to agree with the last few comments---there was not much there for me to buy. I looked really hard for stuff that I might want, but it was really all too logo-based, like the stuff you might find at a museum gift-shop.

Maybe they would have done better with more fee-based events? I'd really like to know what everyone thinks. How could Rezzable have been profitable? How could some other company do the kinds of things Rezzable did and make money? What would have to be changed?

[Metacam Oh]

"I don't think the whole problem was with LL and SL. There aren't too many business models that work for companies larger than one (ie, companies that need to make RL coin) in SL or any virtual world. Look at the evidence and the names of those who've tried and failed so far."

Radar, I know one, Linden Labs, and that's where all the COIN is going in SL

It'd be much easier proposition making money in the Virtual World if Linden Labs didn't insist on charging Sim owners 295 US a month for 1/4 of a computer server that could be rented normally for less than that by itself.

Maybe the Lab's game plan is to take the money and run, because there's not going to be a Linden Labs when all the businesses inside realize all the money is being siphoned by Linden Labs and then that will be the death cry.

[anna gulaev]

It's difficult to know what these numbers mean when so much money plays round-robin.

I think if you were able to remove from these figures all money spent in the pursuit of making money you'd find the actual market for cool items and experiences is very small. For example, how many DJ booths do you suppose are sold because they are cool and will entertain people? I suspect most are sold to people who think they'll make money building yet another club.

Rezzable didn't offer anything for chasing the money-making myth, and they didn't offer anything to facilitate theft, and they didn't offer gambling, and they didn't try to unseat someone who was already successful with lower-cost knock-offs and search gaming, so their prospects for earning money were slim.

I believe the 2006-2007 focus of selling SL as a place to earn money doomed SL to attracting all the wrong people. Permanently. Now that all the hucksters are here, how can SL attract anyone else? LL is going to have to be willing to cut their concurrency numbers and their tier-paying base substantially if they are to ever clean the place up and make it a viable platform for normal people and real businesses. They're going to have to start picking losers as well as winners. They will need to stop rewarding hucksterism.

That would cost them near-term, so I am not hopeful.

[GoSpeed Racer]

Until the day comes that I can bring my avatar with its inventory to another grid I doubt I'll spend much time or even visit these SL spinoffs. Part of the fun of being someplce in SL is you are also a part of that world in general. Why go to another grid and hang out there if you look like a gawd awful ruth-noob in red pants or some sort of "Other Skin" clone. You'll visit once or twice but not bother coming back because you look like any other "game piece".

Yes, I know that sounds shallow but I beleive for a majority of us our avatar and how we've customized it defines who we are. If we are in an SL like environment we want it to be consistent.

[Balthasar Bookmite]

Be sides creating beautiful builds, what was the point of Rezzable again? I never saw it to be a money-making company to begin with.

[Sioban McMahon]

Doreen,

The "museum shop" sort of thing was exactly what I'd been hoping for when I looked at the items for sale in the Rezzable sims. Take the theme of the sim and apply it to items that are useful to me or that I covet. Clothes, things for my house or parcel, gifts.

[Arcadia Codesmith]

With LL's punitive tier fees, the only ways to make money on large tracts are to either subdivide and rent at a healthy markup, or devote most or all of the space to selling stuff (and your stuff had better be flawless, cheap and plentiful).

I'm eyeing Metaplace's pricing structure with envy, and when they go 3D, I'll probably jump ship (if they keep the same prices). Integrated (free) builder's tools would seal the deal.

[Nalates Urriah]

Troy's point is well taken. I'm not sure how Rezzable plans to make money. I am not sure how anyone plans to make money on the OSGrid.

Not only does the OSGrid lack a currency system it has few people. Openlife has yet to update the wiki and it still says there is no currency system, in spite of one being in use. But I can't find any economic stats.

Also I haven't seen much about content theft that assures me products made in OS or OL are secure.

I don't see LL as that bad and the others are not that good... yet.

[rightasrain]

@ Nalates -- we are not on Openlife, but running our own grid which you can visit now.

@ Sioban -- we have/had a wide range of stuff across as well as many fashion events, so hard to imagine nothing would have been of interest. I think it is way too hard to find stuff in SL, which leads to the kind of comment you made. Which is really sad cause lots of other content creators have same issue and the potential customers are missing out at the same time.

@ Anna -- yes! We think a more traditional web play is a better focus at http://heritage-key.com and we are add the virtual experience to make it unique for the mainstream online audience.

[CronoCloud Creeggan]

Rezzable forgot one thing. The sweet spot for item pricing is 200L$ and below. Most of their items for sale were above that. I visited that Black Swan build, the one with Giganoob, saw some great items, but they were priced out of my SL budget.

It's a heck of a lot easier to get 100L$ out of a huge number of people than 1000L$ out of relatively few.

[Metacam Oh]

Crono, your budget is 25 cents? Please. People wonder why businesses in the Metaverse can't make a living. You got a guy crying over 25 cent budgets and Linden is charging 300 bucks for a 1/4 a server. I think that says it all.

[Juliett Thielt]

Rezzable had the wrong business model. They tried to be like a theme park (albeit without admission most of the time) and attempted to make money from the sale their own themed products.

The most marketable product Rezzable could have sold: the sim traffic. All of those visitors are very attractive to shop owners. Rezzable could have rented out shop space to selected content creators instead who would have sold their own products.

We earn almost double our tier doing just that, with traffic averaging 7500 on our 1/8 of a sim. We have 8 hours of staffed events a week to get our traffic. I envy the traffic Rezzable got just from the beauty of their build. Too bad they were better builders than business people.

[rightasrain]

@Juliett-- your comment is similar to what I hear a lot from people trying to make a buck in SL. Actually if I do the math you are making $40-50 a month but also have staff and other expenses. So at the end of the day you are putting in the effort and mainly LL is getting the benefits. Tier is very expensive relative to the rewards of adding content to SL. I still find it pretty crazy that major universities with massive endowments get lower prices for buying and maintaining their sims than the creators who fill it all with virtual content and breath life into the digital realm.