The Otherland Group - Blog

Why do we feel that we own our body?

If we ponder what the the Metaverse will look like in 10 years we might think of a world in which you can enter a virtual environment totally and with all your senses, not just the eye. This is the vision of numerous science fiction novels like "Snow Crash" or "Otherland".

If you have read "Otherland" or similar novels you will remember that one of the issues discussed is the danger of losing the connection to your own body if you dive too deeply into the virtual world. You fail to be able to "come back" and fall into some kind of a coma.

All fiction?

The German Magazine "Gehirn & Geist" has an article titled: "Why do we feel that we own our body?"

The Swedish researcher Henrik Ehrsson from the Karolinska Institute approached this question experimentally and I must say I was very surprised that this was still an open issue and that research was going on in this area.

The findings her replicate my own experiences, though (from a very "scientific" point of view, of course):

It certainly IS possible, to identify with your virtual body (avatar)! You can easily further this identification through emphasizing the connection between physical and virtual body by  making them go through the same "experiences".

The King of Second Life is (not yet) dead. Long live the King!

Every one but me already wrote about this probably, but I still can't hold my 2 cents back.

A little more than a week ago, Philip Rosedale, founder ad CEO of Linden Lab announced his intention to step down from his post as CEO and look for an external manager to take over. As soon as this person has been found Philip Rosedale will take over the post as Chairman of the Board (currently held by Mitch Kapor).

See Philip's personal statement here and Adam Pasick's excellent analysis here.

This move came as quite a surprise to many observers. Others had expected another change in the top management of Linden Lab for quite a while - as the growth problems of the company were a little bit too apparent lately. A founder handing over the CEO position to an experienced manager after a startup has reached a certain size is nothing unusual, additionally.

These are certainly troubled times for Linden Lab and Second Life. All in all this feels like very good news to me, though. Philip Rosedale has been an excellent "visionary founder". Without him, Second Life would not exist. Without him, the platform never would have reached it current size. No one else would have accepted the risk to base a platform like this nearly 100% on the idea of user generated content. And that was certainly one of the driving factors for Second Life's (arguable) success.

But - while I certainly do not know enough about the inner workings of Linden Lab to judge this objectively - from the outside it looks as if he wasn't a very good "manager" once the company reached a certain size. Linden Lab never seemed to have clear priorities for the development of the platform and many publicly announced goals have not been met. Although the scaling and stability problems of Second Life have been apparent for more than 2 years, most of the projects to overhaul the basic architecture are still in the planning stages.

Linden Lab's support systems and processes are "barely adequate" on a good day, pathetic on a bad one. (The support team is great and full of enthusiastic people, but its badly understaffed and working without a balanced set of priorities "from the top".)

Second Life has probably the steepest learning curve of all virtual worlds known to me - and (coincidentally?) the worst retention rate when it comes to "trial accounts". This has been known for at least 3 years, and still, there has not been a single major overhaul of the software's user interface in all of these years; maybe because the company's boss is much too intelligent, to really believe that average people simply can not understand his product. ;)

We can only hope that this will improve with a more operations-oriented top manager responsible for day-to-day operations. This hope is not just optimism. Look at a company like Google. The founding geniuses are still on board. But the company's operations are lead by an experienced manager (who probably won't understand the math behind Google's ranking algorithms - but doesn't need that to be successful in his job).

Many in our industry are very skeptical about Second Life these days, And that skepticism isn't unfounded. Linden Lab's track record hasn't been perfect in the last three years, to phrase it politely. The platform's performance is erratic at best, software services important for residents and developers alike go down every weekend. And many of the improvements promised regularly by Philip and other officers have missed their deadlines - some of them for more than a year or indefinitely ...

OTOH Second Life is still the platform with the most flexible development capabilities, with a lot of good developers and the most representative demographics.

Additionally, the OpenSim project might (!) deliver an alternative, open source, second-life-compatible platform, which can easily be used to create closed and semi-open worlds utilizing the tools, developers and other resources which are available for Second Life today.

I wouldn't be too surprised, if Second Life would be considered as one of the leading platforms for the creation of the Metaverse in 2009/10 again - if they select the right CEO soon.

Technorati Tags: 3d web, metaverse, second life, virtual worlds, web 3.d

Learning from with virtual worlds about the coming nano-based economy

A fascinating aspect in the economy of virtual worlds is the fact that - once a product has been designed - production costs are nearly zero. Some people usually wonder how an economy can work at all, when production costs (and distribution costs, too) fall to zero. Would this lead to everything being offered for free? Certainly not, as the economy in virtual worlds like Second Life, There or IMVU tells us.

But is this 'realistic"? Does this have any relevance for the 'real' (?) economy? Can we learn anything from virtual worlds economies under such unrealistic assumptions? We certainly can!

In many industries, productions costs are rapidly dwindling too, and there already is a flourishing industry selling digital goods like music, movies, ringtones etc. And all those items are NOT being offered for free. Why? And how will these prices will develop in the future? What will happen with other types of products which can be manufactured at ever dwindling costs (for different reasons)?

If you are interested in science fiction or some of the more futuristic technologies like nano-tech manufacturing you might have heard about the theory, that nano-assemblers will - one day - be able, to create ANY material object from raw materials available in abundance. The idea is to directly manipulate single molecules or molecular building blocks (like depicted in the picture to the right; Source: Foresight Institute).

While it is NOT certain, that nano-tech manufacturing will be possible ever ... if it became possible, it would certainly change the production industry in a dramatic way: the production cost for nearly all physical goods would shrink dramatically. Just Science Fiction? Maybe ...

But is interesting, to think about these ideas. If you want more food for thought, read Snowcrashing Into The Diamond Age 2 (Part Two) by Extropia DaSilva. Warning: Extropia, like Gwyneth Llewelyn, who published this text, has a tendency to produce long and winding texts. It is well worth the time to digest this essay, though.

While I am not saying that nano-tech manufacturing is right around the corner - it is certainly interesting to think about the parallels between such an economy and the economy of virtual worlds (or industries like music and entertainment already today). Virtual worlds might be an exciting training ground on which to test business models for the "real" world.

Technorati Tags: 3d web, augmented reality, metaverse, virtual worlds, web 3.d

New Dazzle Look for Second Life - Old wine in ...

Tonight I read about a new First Look Viewer for Second Life, Dazzle, downloaded it and played around with it a bit. For those who don't know Second Life in Detail: First Look Viewers are new versions of the client software, that you need to access Second Life, which are not ready for prime time yet. They usually change some basic features of Second Life (or just the front end) and users can try them out for a while, before the new features are integrated into the general release. First Look clients are not Market Research. All of the features, Linden Lab releases with First Look Viewers so far, have been incorporated into the main version later.

I was very much excited to test this out, as this new version was announced with words like:

We’re pleased to announce First Look: Dazzle, a “refresh” for the Second Life viewer’s appearance which makes the UI (User Interface) more accessible and pleasing.

It is my strong belief, that the shortcomings of the current user interface of Second Life are one of the major issues leading to the extremely low user retention especially in the first 30 - 90 minutes. Learning Second Life is NOT easy for the average internet user. ANY improvement of the client's usability would be extremely welcome to me. Alas ...

... after playing around with Dazzle for 30 minutes I can only say: deeply disappointing!

What has happened is basically nothing more than the application of a new skin and color scheme. Cosmetic changes. Pure facelifting. Some icons have been changed. The style of windows, buttons and other interface elements is now basically that of a "polished Windows NT/XP" and everything has been made a little brighter.

Nothing else was changed in a substantial way! The illogical grouping of commands into menus with arcane or misleading names is still the same. Some important commands are still well hidden, rarely needed ones appear in the menu top levels. I wonder, how one can say, that any of these changes improved usability or accessibility at all (some texts are more readable maybe; stronger contrasts).

This leads me again, to question the way this company, Linden Lab, is doing user experience design. I honestly wonder

• How many user interviews have been made (professionally done) before this project was started?
• Have the interim versions been tested with real users (especially newbies) in a controlled environment?
• Was there any comparative testing (old and new versions with different groups)?
• What were the goals of this project?
• Which measurable performance indicators have been defined to check, if (which) goals have been achieved?

To be honest, I very much doubt that anything like this happened. This looks like a bunch of enthusiastic engineers got together and attacked some weaknesses of the current viewer/client - guided by their own taste or suggestions in publicly available literature and eager to demonstrate the relatively new feature of "XML-based customizability" introduced to the SL viewer last year. Disappointing.

Technorati Tags: 3d web, metaverse, second life, virtual worlds, web 3.d

The Economy of Virtual Worlds - It’s got to be commercial and crazy!

I really hate it, when exciting conferences are happening without me participating - but then there's the blogosphere which usually reports "live and in full color" and gives you at least a little glimpse of what is happening. What excites me most on Worlds in Motion at GDC08 are all the discussions about the economy of virtual worlds. I think, that a working economy is one of the most decisive success factors for nearly every kind of virtual world. It doesn't matter if this world is "free to play", subscription based or sponsored/branded. A working economy always adds to the fun, the stickyness and fosters creativity.

It's big business, too. As John Swords of ESC reports from a session

Current analyst estimate that $1.8B+ is on the secondary market for virtual goods. IGE stated nearly $1B in gross transactions in 2005. ItemBay and ItemMania accounted for $974B in gross transaction volume in 2006. Economist projections are $5B in gross transactions by 2012.

And thats the secondary market. This is NOT including the transactions taking place inside virtual worlds (in Second Life, for example, the volume of inworld transactions is 5 - 10 times larger than the secondary market). Additionally, the 2012 prediction of $5B gross volume seems very conservative to me. Growth rates are much more dramatic. I would be very surprised if gross volume would not pass $10B before 2012.
The same John Swords reports (he writes the most concise summaries) from a panel with the bosses of Entropia and GAIA

Can a virtual world or MMO exist without an economy? Panelists agree it’s not likely because any time users perceive value in the world, a market will emerge regardless of terms of service.

Its my firm belief, that "economy" will play a growing role in the further development of virtual worlds, especially as users don't like paying subscriptions for their fun. If you take a look at the web now, nearly nobody pays for entertainment and news anymore. Everything is (seems) free. This is the direction, where virtual worlds are going to, too. There is no way around it. First, there will be a huge shift from subscriptions (still important for premium accounts and most MMOGs) to micropayments. In effect, the users won't pay less, than with subscription. It just feels better to them to pay their monthly 10 - 30 US$ in small payments for virtual goods. And the next step will be advertising based/sponsored models - like on the web today.

Bu there always has to be an "economy", where creativity is rewarded in a way, that "the creatives" take seriously. Because most

Price for the best quote from Worlds in Motion goes to Raph Koster (so far):

The kinds of dreams virtual worlds can achieve cannot come from just idealists or just commercial interests. It’s got to be commercial and crazy.

Sums it up nicely IMHO, that fun, creativity and economy are not diametral to each other.

Technorati Tags: 3d web, marketing, metaverse, second life, v-commerce, virtual worlds, web 3.d

Linden Lab bans Ad Farms - Great Idea, Bad Execution

Last week, Linden Lab, the company behind the virtual world of Second Life, finally decided to act against the ugly phenomenon of advertising farms on the so called "mainland". For those who are not Second Life users: ad farms are areas in Second Life, where the virtual land is cut into extremely small parcels, which are filled with very annoying advertisement displays - the infamous rotating cubes. And - while this is called "ad farming" - most of the Second Life residents doing this are not actually planning on making any money from "advertising". They are speculating on annoying the neighbors so much, that they will decide to buy the land - which is set for sale at astronomical prices - to get rid of the ads. (picture to the right CC by Ordinal Malaprop)

Linden Lab now announced that:

Using content, particularly advertising, to deliberately and negatively affect another resident’s view so as to sell a parcel for an unreasonable price, will be deemed unacceptable and dealt with as a violation of our community standards.

Hmmm ... While the idea of setting up limits against ad farms is not bad, I wonder if these rules will help much and how effective they will be. I think it was not a very good idea, to base the judgement if an installation is considered an "ad farm" on the INTENTION of the resident setting it up. Linden Lab might be able to monitor chats inworld but I doubt, if they can read their customer's minds. Certain limits about minimum parcel sizes and maximum land prices would have been a more practical solution IMHO - and less prone to subjective interpretation.

OTOH I think its a very promising movement in principle, that the Lab finally seems to care for the mainland again: If successful, this new policy should lead to more attractive residential areas on the Linden-operated mainland. And the newly formed "Department of Public Works" will hopefully add to the attractiveness of the mainland in another way: with more realistic (and fun) infrastructure and new and interesting public buildings.

Those who know, that The Otherland Group is active in the (non-mainland) real estate business and is operating an advertisement network within Second Life might be surprised to learn that we are so happy about these new projects. Why should we care about the mainland? And why should we like a ban of advertisement? The answers to these questions are rather simple:

1. Ad-farms with their horrible rotating displays are one of the main reasons advertising is so much discredited in virtual worlds in general and in Second Life specifically. Anything that reduces these eyesores (which actually isn't "advertising" at all in many cases) will make our job easier - to provide a platform for professionally done, effective outdoor marketing.
2. Anything that makes Second Life more attractive for more target groups is good for our business in the long run - even for the business in the other virtual worlds we are covering because SL is still a kind of flagship product. And a reduction of the large trailer-park-like regions in Second Life and the addition of infrastructure and pubic buildings will certainly make Second Life more attractive. :)

So Linden Lab is moving in the right direction. A little more fine tuning might help even more, though.

Technorati Tags: 3d web, advertising, marketing, metaverse, second life, virtual worlds, web 3.d

Protecting property rights in Virtual Worlds - interconnected Virtual Worlds

Among the attributes, which separate Second Life from other virtual worlds, is the fact, that every resident owns the full IP rights of his or her creations. There has been some debate, how "real" this assertion by Linden Lab, creators of Second Life, is. But it is at least real enough that there are many very real businesses based on the creation and sales of digital goods. And - like with all digital goods - there have always been attempts, to "steal" them i.e. circumvent the permissions system, which protects property rights and controls what other users can do with your objects.

Lately a new solution, SecondInventory, came onto the market, which allows Second Life residents to make backups of their own items to the local disk - a functionality sorely missing from the Standard Second Life. And soon this product was accused of being a thief's tool. As the debate raged on, some technically oriented Second Life residents began to argue, that any such permission system is superfluous, because if can't offer real protection, anyway - "no technical solution is bullet proof" ... "and code wants to be free"

I think this is a very simplistic view.

While no technical solution is bullet proof ... and I don't believe, that any technical solution will keep people from stealing other peoples property (physical, digital, virtual, intellectual whatever) in the long run, there is a huge difference, though, between "some sensible protection" and "I don't care/I do nothing". Stealing is not OK.

Let me try to put this product "second inventory" (and the old copybot etc.) into perspective. Because the questions arising here are actually questions, which are important for many developments surrounding virtual worlds technology these days, especially the growing number of "alternative grids". What will happen, when the long awaited "interoperability" arrives and our avatars (and their possessions?) move freely from grid to grid, from world to world?

Read on ...

Technorati Tags: 3d web, metaverse, second life, trust, v-commerce, virtual worlds, web 3.d

Podiumsdiskussion "Banking in Second Life" heute, Mittwoch, im ComMeta CC

Für alle, die noch nichts Besseres vorhaben und sich für Business in virtuellen Welten interessieren:

Podiumsdiskussion heute Abend, 20:00 Uhr im ComMeta CC (in Second Life). Der Obertitel lautet "Auswirkungen der Bankenkrise auf SL Nutzer" aber im Grunde geht es um "Banking in der virtuellen Welt - nur ein Spiel der ernsthaftes Geschäft?"

Geleitet wird die Diskussion von Andreas Illman (von Schaltzeit, dem Betreiber des ComMeta CC). Die juristische Expertise bringt Iris Speiser ein. Und ich werde den Experten für virtuelle Welten simulieren. ;)

Themen:

• Wie kam es zu der neuen Regelung zu Bankgeschäften in Second Life (die nahezu auf ein Verbot von Banken hinausläuft)
• Wie schwerwiegend waren die Pleiten der Vergangenheit?
• Wer sind die Geschädigten?
• Wie genau lauten die neuen Regeln?
• Was bedeutet das für „Business in Virtuellen Welten“?

Das wird bestimmt eine spannende Diskussion. Ich habe jedenfalls ein paar sehr dedizierte Meinungen zu diesem Themenkomplex ;)

Technorati Tags: 3d web, metaverse, second life, v-commerce, web 3.d

Gartner predicts vCommerce important for large Retailers

The IT consulting group Gartner seems to develop a special interest in virtual worlds lately. What is especially interesting, is the fact that it is not just one analyst focusing on the topic but at least three different groups who come up with their analyses independantly (and don't always agree). The latest report, which I only found about on a Finnish (!) portal for press releases, is about retailing in virtual worlds:

By 2010, 20 percent of global Tier 1 retailers will have a marketing presence in online games and virtual worlds. [...] These virtual worlds and video games are emerging as places where consumers can shop and retailers need to be ready to respond to this growing demand.  Gartner recommends that retailers:

• Expand your definition of customer touchpoints to include virtual worlds and online games.
• Develop trial criteria prior to launching a presence in virtual worlds and measure the results.
• Monitor innovation in retail activity in virtual worlds and online games, particularly if you are targeting a younger demographic.
• Target the right environment for your customer.

I could not agree more (not that it matters, that I agree.) ;) Virtual shopping will be one of the most important applications for virtual worlds. I believe in that for quite a while now. Maybe it will grow to be the most important application (from a financial point of view), soon.

BTW: This fits with other Gartner-Reports Findings: Retailers' Presence in Virtual Worlds Mirrors Evolution of the Web Channel and Predicts 2008: How Shoppers and Technology Will Change Retail.

What I find especially interesting is the focus on accountability (define KPIs and measure them!) Thats exactly our approach here at The Otherland Group.

Technorati Tags: 3d web, metaverse, metrics, v-commerce, virtual worlds, web 3.d

Neue Studie von Gartner: Virtuelle Welten wichtig für Handelskonzerne

Bei Gartner scheint man mehr und mehr Interesse für das Thema virtuelle Welten zu entwickeln. Interessant ist dabei, dass es nicht nur ein einzelner Analyst ist, der das Thema bearbeitet sondern mindestens 3 unabhängige Gruppen (die sich auch nicht immer einig sind). Der letzte Report zum Thema, den ich nur auf einem finnischen (!) Presseportal gefunden habe, dreht sich um mein Lieblingsthema virtuelles Shopping:

By 2010, 20 percent of global Tier 1 retailers will have a marketing presence in online games and virtual worlds. [...] These virtual worlds and video games are emerging as places where consumers can shop and retailers need to be ready to respond to this growing demand.  Gartner recommends that retailers:

• Expand your definition of customer touchpoints to include virtual worlds and online games.
• Develop trial criteria prior to launching a presence in virtual worlds and measure the results.
• Monitor innovation in retail activity in virtual worlds and online games, particularly if you are targeting a younger demographic.
• Target the right environment for your customer.

Hätte ich nicht besser sagen können (nicht, dass meine Meinung dazu eine Rolle spielen würde) ;) Shopping in virtuellen Welten wird recht bald eine der wichtigsten Anwendungen für virtuelle Welten sein - wenn nicht für eine Zeit lang die Wichtigste überhaupt ... woran ich schon geraume Zeit glaube.

In die selbe Kerbe schlagen übrigens aus die Gartner-Reports Findings: Retailers' Presence in Virtual Worlds Mirrors Evolution of the Web Channel und Predicts 2008: How Shoppers and Technology Will Change Retail.

Was ich zusätzlich besonders spannend finde, ist der besondere Fokus auf Messbarkeit der Projektergebnisse (KPIs definieren und messen!) Das ist exakt unser Ansatz hier bei der Otherland Group. Schön, dass die Jungens und Madels bei Gartner das genau so sehen.

Technorati Tags: 3d web, metrics, v-commerce, virtual worlds, web 3.d