On March 27th, 2020, the Engadget website published what is probably the most detailed interview yet with Linden Lab CEO Ebbe Altberg, in which he explains the thinking behind the company’s decision to sell their fledgling social VR platform, Sansar, and focus on Second Life.
It’s clear that one of the strong messages that Ebbe wanted to send out with this high-profile industry interview is that Linden Lab is now in a strong, profitable position as a company. Here’s an excerpt from that interview, which I would encourage you to read in full:
So why did Linden Lab sell the platform? In short, the company wanted to be profitable and Sansar wasn’t making enough money. “We incubated Sansar,” Altberg explained. “We got it up and going. It’s fantastic technology, but it’s still [got] quite a way of runway [before it can] become a cash-positive.”
Altberg said it was ultimately a “strategic decision” to sell Sansar and give the development team a chance to branch out on their own. “I’m super stoked that we’re able to find a way for them to continue the journey,” he explained.
First, though, the company needed to find a buyer. It considered “a bunch of different paths,” according to Altberg, which included some larger owners. In the end, it settled on Wookey Project Corp., a little-known startup that wants to create “a new generation of online AR/VR experiences,” according to a Linden Lab press release. Altberg describes the company as a “really scrappy investor type of player” who wants a challenge and is prepared to let the Sansar team drive its own agenda. Wookey’s CEO also lives in the same town as Altberg, which probably helped seal the deal.
And (yes, I have to say it), I first drew attention to Linden Lab’s essential dilemma in a blogpost I wrote two years ago:
I think that Ebbe Altberg and his team at Linden Lab can’t win no matter what they do. If they continue to throw too much time and money at Second Life, Sansar will suffer and they’re betting the future on Sansar… Yet if they try to promote Sansar…folks who are wedded to Second Life get upset. Or people will say that SL is “being actively starved and strangled”.
Linden Lab was trying to juggle two completely separate projects, at completely separate stages of development, and was finding the juggling to be a bit much. Like Philip Rosedale found with High Fidelity, Linden Lab discovered that all the time and money they had poured into a social VR platform, in hopes that users would flood in, was a cash drain that put the entire company in danger. In the end, something had to give, and that something was Sansar, which, under the circumstances, makes perfect sense.
Sansar now has a “really scrappy investor type of player” who will try to turn the platform into a profitable endeavour, and Linden Lab can go back to what they do best: keep Second Life humming smoothly along as the reliable cash-cow it is, at almost 17 years of age. I’m quite sure that Philip Rosedale and his original team at Linden Lab back in 2003 never dreamed that SL would enjoy the long, successful life that it has had!
However, I will put on my prognosticator’s hat and issue a prediction: Wookey will go all-in on Sansar, and they will do their absolute damnedest to aright the Good Ship Sansar, which has been listing badly of late. (Go ahead. Call the metaphor police. I dare you,)
But Wookey isn’t going to stick around forever if Sansar fails to take off a second time. The number crunchers at Wookey already have a deadline in their head. I give them two years, max. If they haven’t turned a profit by then, Wookey will sell Sansar in turn, or shut it down.
Clock starts now.