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Linden Lab Defuses the Hype

Posted by SIM on February 9, 2007

Second Life’s Linden Lab Punctures Its Own Hype
By Mitch Wagner,
February 9, 2007

Linden Lab appears to be taking steps to puncture the hype bubble surrounding its creation, Second Life, providing realistic statistics on how many people are actually using the service, and debunking claims that the Linden Dollar tokens used in SL are a kind of real currency.

Still, the statistics released today show impressive rates of double-digit growth in real users and in the Second Life economy.

Linden Lab is picking up a gauntlet thrown down by Clay Shirky in December. Shirky, who is faculty on the Interactive Telecommunications Program at New York University, correctly flamed Linden Lab and the gullible business press for touting the total number of residents in Second Life as being equivalent to its user base.

At the time, Second Life had 2 million residents. It’s now over 3 million. That sounds impressive, but it’s less so when you understand what a “resident” is.

A resident is another name for a Second Life account, also known as an avatar. Each individual user — each flesh-and-blood human being — can have multiple avatars in Second Life. And you don’t need to pay to participate either, most of the things in Second Life are free to do.

Moreover, everyone who’s ever logged in to Second Life counts as a resident, even if they gave it three minutes and bailed out, never to return.

Nonetheless, Linden Lab, until now, touted its residency statistics when asked about the size of its user base, and left credulous journalists to connect the dots. Shirky provided a roll of shame of journalists who fell for the line:

“It has a population of a million.” — Richard Siklos, New York Times

“In the Internet-based virtual world known as Second Life, for instance, more than 1 million citizens have created representations of themselves known as avatars…” — Michael Yessis, USA TODAY

“Since it started about three years ago, the population of Second Life has grown to 1.2 million users.” — Peter Valdes-Dapena, CNN

“So far, it’s signed up 1.3 million members.” — David Kirkpatrick, Fortune

Today, Linden Lab divulged more sensible usage statistics:

Premium accounts, which people have to pay $9.95 per month to get, increased 16% month-over-month last month, to more than 57.7 thousand.

Unique users represent 64% of total residents.

Perhaps most interesting of all: About 10% of unique users have logged in 40 hours or more. “Interestingly, it appears that blogging has a similar ratio of committed users to registrations as indicated by Live Journal,” said Zee Linden of Linden Lab, writing on the official Linden Lab Second Life blog.

Does that last statement refute Shirky’s ongoing assertions that Second Life is not now, and never will be, a mainstream activity? At first glance, yes, because it indicates that SL has the same stickiness as blogging — one in ten people who try it, stick with it. Blogging has become mainstream, so Second Life is on its way to becoming mainstream, too, isn’t it?

Not necessarily, because far more people read blogs than write them, whereas to participate in Second Life, you need to have an account, and need to stick with it.

Still, the statistics are good news for Linden Lab and the people who are invested in Second Life, either financially or emotionally.

The credibility of the report is somewhat undercut by Zee Linden not signing his real name. Look, it’s swell to go around using Second Life nicknames while in Second Life and in the real-world SL community. But when talking about real-world business issues, it’s customary to use real names. I’m Ziggy Figaro in Second Life (IM me and say hi sometime), but out here, I’m Mitch Wagner.

I’m prettyy sure “Zee Linden” is John Zdanowski, chief financial officer for Linden Lab, but I had to do some middlin’ fancy Googling to figure that out.

Another thing Zee Linden wants you to know: Second Life’s internal currency, Linden Dollars, isn’t real money. And you don’t own your Linden$ the way you own the coinage under your sofa cushions. “Technically, the L$ is a limited license right to participate in and use certain features of Second Life,” he says.

That’ll help counter hype like this::

In November, 2003, Linden Lab made a policy change unprecedented in online games: It allowed Second Life residents to retain full ownership of their virtual creations.

That’s a pretty common statement in journalism about SL. But, actually, it’s not so much with the truth thing. Second Life’s terms of service lets them kick you off of SL for any reason, and you forfeit all your Second Life property and Linden Dollars.

It’s great to see Linden Lab stepping up and taking responsibility for debunking some of the more outrageous claims about Second Life. Based on my experience, Second Life is a powerful invention and has potential to be a great force in the world, but excessive hype can be fatal to a company when the backlash sets in. The backlash has already begun, the best way for Linden Lab to weather it is to get ahead of it.

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