New World Notes

Why Companies Often Don’t Address Internal Controversies in Public, Generally Speaking

IMPORTANT NOTE: I wrote this post prior to Thursday’s news, and is not directly related to that or any other specific company or situation. Please read it only as important background information to help explain why, generally speaking, companies often don’t address internal controversies in public.

I’ve seen various controversies within the virtual world/gaming user community light up across social media over the years, some of them involving serious (if unconfirmed) allegations involving the companies themselves. 

When this happens, it sometimes leads angry user community members to ask: “Why isn’t the company announcing anything about these allegations publicly?”

Speaking very generally -- and this reflects my own experience working for various virtual world/online gaming companies over the years, when situations like this happen -- there’s often a very good reason for the radio silence. 

Here’s some considerations that often come up in cases like this:

Cajsa’s Daily Flickr Pick: Artful Screen Captures from Red Dead Redemption 2

Stuart Dodd’s photostream focuses on Red Dead Redemption 2, the Wild West game that was recently used to make Lil Nas X’s “Old Towne Road” music video that that landed on the Billboard Country chart until Billboard knocked him off sparking a controversy and inspiring country singer Billy Ray Cyrus to do a remix with him to show solidarity.  

I like how Dodd is using light and shadow in this picture to dramatic effect. The left edge of the door is right on the center line, but in terms of composition, I think the most striking elements is the contrast between the outside and the inside. 

“Waiting in the Evening Light” employs the same light and dark contrast. The cowboy is placed according to the Rule of Thirds. The light has a kind of solid quality to it, something anyone who has explored an old abandoned logger’s shack or even walked in a forest with a thick canopy where the light breaks through.

ZOMBIES, RUN! iOS/Android Game Project Combines Audio Immersion With Real World Running

ZOMBIES, RUN! is an indie game project for iOS and Android now seeking funds via Kickstarter, and it leverages smartphone technology in a very smart way: The phone's stereo sound capability creates an immersive, post-apocalyptic world that's depicted with sound effects, music, and dialog, while the phone's location-aware capability tracks the amount of running you're doing in the real world, and incorporates the distance you've run into the game itself. This probably makes more sense if you watch the Kickstarter video, so take a look:

While cool and innovative in itself, there's at least two reasons I'm writing about it here on New World Notes, a blog that's mostly about virtual worlds:

Why Call Second Life "Second Life" When Few People Use Second Life Long Enough to Really Have a "Second Life"?

Last week I argued that Second Life is misnamed, and should thus be re-branded, because few people, even active SL users, actually seem to want a "second life". Why do I think this? Because of Second Life's actual user activity patterns. These are Linden Lab's last published granular stats:

These figures are from August 2009, but there's no reason to think they've changed much since then. (If anything, active user hours seem to have decreased.) As you can see, 54% of the userbase is in SL less than 3 hours a month. On the other end of the spectrum, only 6% are in-world 200 hours or more per month, which averages out to 6+ hours a day. As a Linden staffer once said of them, "Those people really do want a second life". But again, they're a fraction of the total userbase. For the vast majority, the usage patterns strongly suggest people who use SL for light and/or occasional entertainment, not a "second life".

Are there different ways to interpret this user data? Maybe:

Why Second Life Can't Survive on Its Current Users Alone (And Why Only Mass Growth Will Save It)

Why does Second Life need Facebook integration, point-and-click movement, and other features that much of the existing Residents resist, even though they might help grow SL’s userbase? After all, a counter-argument runs, Linden Lab is profitable now, so the company should just devote its resources to serving and retaining the existing userbase, rather than chasing after a new audience. That might make sense, but here is the harsh reality:

There are not enough paying users now to sustain Second Life in the medium to long term, and the customers who pay the most are the most unsustainable.

Here’s why. Take a look at this very rough estimate of Second Life’s existing yearly revenue:

How do we know this? In a recent press release, Linden Lab reported it had "revenues exceeding $75 million a year." To make an educated guess on where that revenue is coming from, I turned to Tyche Shephard and her invaluable website Grid Survey, which gathers publicly available data on Second Life land. Her site reports that revenue from private estates (i.e. islands) now represent about $5 million a month, while mainland land revenue represents about $1 million a month. If you annualize that out, it comes to $60 million a year from private estates, and $12 million a year in mainland revenue, for a total of $72 million a year from land tier payments. So that suggests the remaining $3 million of Linden Lab’s $75 million in revenue comes from Linden Dollar sales commissions, Premium account payments, etc.

Now again, this is just an estimate based on what Linden Lab has publicly reported, and the data Grid Survey has gathered. (And my extrapolation of Tyche’s data is mine, not necessarily hers.) I welcome corrections/expansions in Comments. But I think this is a fair guess at Second Life’s revenue base.

Now let’s break down how many people are paying that $75 million:

5 More Thoughts on Second Lifers' Resistance to Change

Unsurprisingly, last week's post, "Second Life's Survival Seriously Threatened by Second Life Users' Hate and Fear of Change", has generated the longest comment thread in the 8 year history of New World Notes by far. Much of the comments are spiked with the very kind of vehemence I was expecting (and writing about in that very essay.) But many more comments were thoughtful and perceptive, even (or especially) those which disagree with me, and I'm grateful for that. It's one big reason why I keep writing this blog.

Before I write the next post in this series on resistance to change, I do want to expand or emphasize five points to the original post:

Only Resistance to Massive User Growth is a Threat to Second Life's Survival

My larger premise is worth double-emphasizing: Only massive user growth will save Second Life after its existing revenue model inevitably implodes. There are many ways to grow the user base, many of which will mean significantly changing Second Life, and will therefore meet resistance. This is the variety of Second Life user opposition I'm referring to, and most concerns me, because it may impede, dilute, de-prioritize, or otherwise complicate the implementation of these changes, if Linden gives this opposition too much weight. Which leads to my second point:

Second Life's Survival Seriously Threatened by Second Life Users' Hate and Fear of Change (1st of a Series)

Recently I mentioned talking with newly appointed Linden Lab CEO Rod Humble about “the recalcitrance of Second Life's existing userbase to change.” To be clear, I do not know if Mr. Humble shares my belief that Second Life’s community resists and fears changing Second Life, even to save it from its current trajectory, which inevitably ends in oblivion.

However, I can say for certain that many Lindens past and present share my opinion about Resident resistance to change. I even suspect this is what Second Life's very founder, Philip Rosedale, believes. After all, he once warned SL's most dedicated users, “Try not to cling too tightly to what we have now... [coming] changes are sometimes going to be disruptive and painful.” One only expects pain, when one expects resistance.

Then again, Philip has all but left Linden Lab, as have nearly all the founding Lindens, even though they once spoke and advocated for Second Life so passionately. Second Life co-founder Cory Ondrejka now works at Facebook. Second Life community management founder Robin Harper now works at a company that makes Facebook games. Most other Lindens have followed them out the door, and many Lindens have since spoken to me about their frustration (almost aways tinged with affection) with Second Life's userbase, and its resistance to change. I believe that resistance is among the many reasons for their collective departure -- a sense that the community they have worked so hard to foster and support resents or dismisses their efforts. Outside analysts have made a similar observation: Forester Research's Tom Grant, for example, suggested Linden Lab suffers from an Iron Law of Oligarchy of "their best customers [who] are, in subtle ways, holding them back."

But more changes are coming, and so will more resistance. Take just a couple examples from recent weeks:

For Virtual Worlds to Grow, Avatars Must Become More Like Halloween Costumes Where Faces Can Still Be Seen (UPDATED With Responses To Comments)

Last Halloween weekend I hit a big block party with several friends, and observed an interesting phenomena that relates, I think, to virtual worlds: The way people interact with one another, when they're dressed in costume. Most times, the costumes would work as a fun social lubricant that encouraged casual roleplay. ("Hey Wolverine, show me your claws!") Often that roleplay would lead to a deeper connection, which is why Halloween is so popular with single adults -- instant dating scene.

Other Halloween costumes, however, would inspire admiration, but little social connection (besides maybe a quick remark or photo.) With that minority of costumes, people kept their distance. What was the common element that kept people away?

Machinima is the Only Real World Application of Second Life To Gain a Mass Market (& For Now, the Only One that Will)

Education and enterprise applications of Second Life have not succeeded on a wide scale, and using SL for architecture, while extremely promising, will probably take 10 years to gain any traction, if ever. However, Second Life machinima has already gained mass market adoption, and until SL's user base grows, it's probably the only real world application that will. Take the 2008 hit movie Role Models, for example, which incorporated Second Life machinima as a plot element. Most notably, it wasn't used to tell a story about SL, but to simulate a videogame that's a significant part of this scene:

With a worldwide gross of $92 million, about 12 million people have seen this scene with Second Life, and about as many will see it on DVD, cable and broadcast television, etc. Second Life machinima is also a featured element in this year's Hot Tub Time Machine (estimated theatrical viewers: 8 million), and HBO/Cinemax's Molotov Alva with 41 million potential viewers. (Second Life machinima made an appearance in the TV shows CSI: NYC and The Office, among other programs, though of course someone could argue these were only an artifact of Second Life's 2006-07 hype wave, never to be repeated.) If R U There, the Second Life-themed feature movie shown at Cannes this year, gets an international distributor, add 5-20 million more to that view count.

The reason Second Life machinima has succeeded where other real world applications have not?

New World Editorial: What Went Wrong With Linden Lab? The Dwight Schrute Echo Chamber

I've argued that five main factors led to Linden Lab laying off 30% of its staff last month (and presumably, the subsequent exit of CEO Mark Kingdon.) But as I said then, they're all symptoms of a much deeper problem. I call that the Dwight Schrute Echo Chamber.

You remember Dwight Schrute, the comically intense geek in the US version of The Office. In a now-famous scene, his Dunder Mifflin antagonist Jim sees Dwight playing Second Life, and asks him what "game" it is. And Dwight replies, huffily:

Second Life is not a game. It's a multi-user virtual environment, it doesn't have points or scores, it doesn't have winners or losers.

Jim's classic reply: "Oh, it has losers." Some assume Jim means Second Lifers in general are losers, but I think he really means Dwight's a loser for refusing to acknowledge the fun, game-like aspects of Second Life. After all, at the end of that episode, we find out Jim himself plays Second Life, and even shows off his rockstar avatar to Pam, his girlfriend. Jim understands Second Life is at its best when it's fun. And in point of fact, he's basically right: The vast majority of Second Life Residents use SL as a kind of game, be it for Barbie doll fashion dress-up of their avatars, or for thematic social roleplaying, or as a Lego-like construction space, or otherwise.

More Schrute from the show's next cutaway:

I signed up for Second Life about a year ago. Back then, my life was so great I literally wanted a second one. In my Second Life, I was also a paper salesman and I was also named Dwight. Absolutely everything was the same, except I could fly.

In other words, Dwight is using Second Life to recreate a real world work environment, a remarkably wacky goal. But then again, how different is that from all the companies which recreate their corporate campuses in Second Life, or educators their university campuses, but can't quite explain who this benefits, beyond the relatively small number of people who are already Second Life enthusiasts? IBM, it's been said, has 10,000 employees who regularly meet in Second Life. Which seems impressive, until you realize that IBM has almost 400,000 employees, 390,000 of whom don't.

So Dwight Schrute's attitude to Second Life is this: Adamant denial (despite all evidence to the contary) that SL is a primarily a game and entertainment platform, and a reflexive insistence (despite little evidence to the affirmative) that Second Life is best used for real world work. The Dwight Schrute Echo Chamber are all the people in Linden Lab and in the company's orbit who've repeated Dwight's mantra in various forms, until it seemed obviously true, and that a sizable market for real world applications of SL already existed. (As opposed to what it more likely is: a very interesting but numerically small niche.) This flawed assumption is probably why Linden Lab has devoted so much money, labor, and time attempting to turn SL into a platform for real world businesses and organizations.

Who are the key figures in the Dwight Schrute echo chamber?