Are Freebies Hurting The Second Life Economy?

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Photo by Don Agnello on Unsplash

I still find it somewhat ironic that I have done a complete, 180-degree change of direction in this blog: going from swearing that I would never cover Second Life at all (because hundreds of other bloggers do it already, and do a much better job than I ever could), to actively carving out a niche for myself, blogging about the various steals, deals, and freebies in SL.

My Second Life freebie coverage actually brings a fair number of readers to my blog, probably the biggest percentage of viewers overall when compared to my other categories of blogposts. In fact, my blogpost about free and inexpensive mesh heads and bodies for female Second Life avatars has now had a whopping 1,598 visitors—my third most-popular post ever.

So, I guess you could call me a freebie expert, or a freebie fashionista if you prefer. And this December has been the usual bountiful bonanza of advent gifts and hunt prizes. But sometimes I stop and ask myself: this is steady rain of freebies actually hurting the Second Life economy, and the livelihoods of SL content creators? In other words, are people not making as much money as they could and should be because of the abundance of free and inexpensive items in-world and on the SL Marketplace?

At first glance, the answer would appear to be “yes”. There has been steady rumbling from various quarters that many vendors are not earning the income that they used to. But are freebies really to blame for this?

I would argue that freebies, if handled properly by the store, can be an extremely effective way to promote a brand. For example, an attractive, well-made free item placed at The Free Dove (which usually includes a SLURL in the package) will often prompt my visit to the mainstore location to see what other products are for sale. In fact, I first learned about the store Alaskametro through their mini hunt at The Free Dove last summer (sadly, I have learned that The Free Dove has decided to stop having designer mini hunts as of January 2019). I had never heard of Alaskametro before, even though I had been an avid consumer in Second Life for over a decade at that point!

You could argue that the reason that powerhouse Second Life brands like Scandalize, Addams, and Blueberry became so well known is via freebies and inexpensive hunts, like the current reindeer hunt currently taking place at various stores on the Scandalize sim. (Technically, it’s not really a “hunt”; some store owners like Scandalize didn’t even bother to hide their reindeer.)

You pick up one colour of an item of clothing for only L$15, try it on, and like it so much that you land up going back to the store later to buy more colours, maybe even the whole fatpack! I’ve done it. You’ve probably done it too. Admit it.

Savvy marketers know that freebies and cheapies can effectively drive traffic to their stores, and increase overall sales. True, many of the people who pick up a free item won’t (or can’t afford to) buy a full-price item. But enough do so to make it worth the store owner’s time and trouble to create and promote freebies. Why else would a store like Alien Gizmo’s regularly offer free L$200 gift cards to their customers?

So, no. Freebies are not the reason for an economic downturn in the SL economy. If anything, freebies are helping content creators get the word out about their brands, and thereby earn more money.

In fact, I seem to remember a closed (i.e. not Hypergrid enabled) OpenSim-based virtual world (I believe it was Avination) which strongly discouraged vendors from offering freebies, thinking that the policy would lead to more people actually buying goods and leading to greater vendor profits. Well, I’m not sure if that was the main reason that Avination eventually closed (they had a couple of fraud scandals, and OpenSim grids tend to be rather precarious enterprises at the best of times), but I’m pretty certain that a ban on freebies didn’t help with user retention any.

My point here (and yes, in a very roundabout way, I am trying to make one!) is that freebies are a good thing. Freebies promote brands, encourage newbies to become full-fledged consumers, and lubricate the SL economy. So get out there and pick up some freebies today! Tell’em Ryan sent you 😉

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UPDATED! Editorial: Linden Lab Launches Sansar on Steam—Will It Entice More People to Use Sansar?

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Note: I woke up very early this morning to write this editorial. Once Linden Lab makes their announcement (which is expected today), I will make a new blogpost with that information. UPDATE: It’s now official—Sansar has launched on Steam.

Today I also am getting feedback from many Sansar users that I have been way too harsh and negative in this particular blogpost, so…

***Please READ THROUGH MY ENTIRE BLOGPOST, INCLUDING THE SECOND UPDATE, thank you!***

Linden Lab has a problem (although they won’t label it that). Fewer people than they probably expected by now are using their social VR platform, Sansar. They’ve tried a few things (like partnering up with esports leagues and popular Twitch livestreamers), in an effort to ignite the fire that made VRChat suddenly so popular earlier this year. Frankly, they’ve had very little success so far. And they’re probably scratching their heads and wondering what it’s going to take to get people to try Sansar—and stay.

So, on October 29th, 2018, Linden Lab made a major surprise announcement:

Sansar has come a long way since we started the project. In 2018 we have devoted an enormous amount of effort to improving the end-user experience, and will continue to do so.

Given those improvements, we believe we are quickly approaching the point where we want to start bringing a large number of users onto the platform. This is an important milestone for us and especially our creators. One of the foundational principles of Sansar is that creators must be able to profit from their creations. For us to make that a reality, we need to give our creators a large audience of customers.

The cornerstone of our growth effort will be to put Sansar on Steam. Steam is where more than half of the VR market goes to find software. It also is a huge pool of users who are interested in our space and are likely to have the hardware required to run Sansar.

Why has Linden Lab decided to take this step? Well, as they said above, they want to get more customers for Sansar, and they know that making the platform available through Steam is going to put it in front of a lot more eyeballs. People who might not have known about Linden Lab or Sansar before. And (most importantly) people who are more likely to have an Oculus Rift, HTC Vive, or Windows Mixed Reality VR headset than the general population. These are the hardcore gamer crowd, who tend to be early adopters of technology. Linden Lab wants these people.

Linden Lab is betting that, if can get sufficient numbers of Steam users to try out Sansar, that a significant number of them will become regular users: exploring, socializing, building experiences, and shopping for items from the Sansar Store. It’s a risk, but it’s a calculated risk. And Linden Lab is willing to get into bed with Steam to do it (even if it means closing down their SandeX Sansar dollar exchange, which happened yesterday).

However, there’s absolutely no guarantee that simply putting Sansar on Steam is going to be enough. For example, the statistics clearly show that High Fidelity’s launch on Steam in late 2016 has, so far, had very little demonstrable impact on its usage levels, aside from the spikes of users attending the monthly stress testing events and the recent FUTVRE LANDS virtual reality festival.

Whether or not Ebbe Altberg and his team at Linden Lab want to call it that is a moot point, but essentially, what we have here is the “consumer launch” of Sansar I had blogged about back in April 2018. My major concern then was that Sansar did not yet have enough features to attract and retain new users. So let’s take a quick look at the 12 things I thought that Sansar should have before a “consumer launch”, according to that April editorial:

  1. Better avatar customization features. We have a few facial sliders, zero body sliders, and no custom avatar skins. The avatars look good, and there are plentiful clothing options, and you can dye your hair any colour under the sun, but you really cannot customize your avatar to the extent you can in other social VR platforms like Sinespace. Nope.
  2. More and better avatar animations: OK, here at least we now have custom emotes, plus a few more dances and the ability to sit down on the ground. Still needs work. Half a check mark (and I’m being generous here).
  3. Particle effects: Fire? Water? Fog? Smoke? Nope. Just kludgy workarounds. High Fidelity already has this feature, and builders such as Noz’aj are using it to great effect in domains such as Beyond.
  4. More interactive content: At the moment, there isn’t nearly enough interactive content in Sansar, although the situation is slowly improving as the scripting abilities are built out over time. But note that two of the most popular Sansar games to date, Galen and Jasmine’s HoverDerby and Gindipple’s Combat Zone, have both shut down because of the developers’ deep frustration with the current scripting limitations and user interface issues in Sansar. At this point, we seem to be going backwards, not forwards. I’m not even going to give this half a check mark. UPDATE: Please see Bagnaria’s comment below.
  5. One or more community hubs: Nope. Linden Lab’s position is that the users can create their own hubs, and some have tried, like David Hall’s Avalon experience.
  6. Greeters: Nope. Other virtual worlds like Sinespace and High Fidelity have paid greeters whose job it is to welcome guests, answer their questions, and make them feel comfortable. As I said before, it’s a business cost. You can’t just rely on volunteers. Hire people. Put them in your community hubs. Pay them (in Sansar dollars, if you prefer).
  7. The ability to pay an avatar directly: Finally, something we do have! Check mark.
  8. Paypal support: Still no Paypal support.
  9. More functional and attractive user forums and blogs: We are still stuck with Zendesk, which is butt ugly and makes Linden Lab (and Sansar) look bad. The Sansar blog is especially horrible. FIX IT. Fail.
  10. Better communication and collaboration with livestreamers and other potential promoters like bloggers and vloggers: This has had mixed results. The UmiNoKaiju thing was a total bust, as far as I can tell. And so far, I am still one of the few people blogging about Sansar. Linden Lab has failed to gain much traction with livestreamers, vloggers, and bloggers when it comes to Sansar. Fail.
  11. More contests: (sound of crickets chirping) Fail. Linden Lab needs to have more contests (and have more and better prizes for those contests), in order to encourage and reward the creativity of Sansar’s userbase. Period.
  12. More regular events: OK, this is another area where things have much improved since April. The Sansar Events calendar is starting to look pretty good. Check mark.

FINAL SCORE: 2½ out of 12 (numbers 2, 7, and 12). In my books, that’s a failing grade. Now, do you see why I wanted Linden Lab to wait another six months to a year before launching on Steam?

My worst nightmare is that we are going to have a repeat of Sansar’s open creator launch, when dozens of people trooped in, looked around, declared themselves dissatisfied, and left, never to come back. And even worse, told their friends how bad Sansar was. Linden Lab cannot afford to make a bad first impression with a brand new bunch of Steam users. And Steam users can be truly brutal in rating their experiences if they feel a product is not up to their standards, as High Fidelity has already learned: 

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A selection of negative reviews of High Fidelity on Steam

And, if you think that user reviews are not important, think again. I read user reviews for new apps on the Oculus Store all the time, and if they are mixed or bad, I don’t buy. The same applies to Steam. A recent Queen’s University research study showed that Steam users left negative reviews more quickly than positive ones, and that boring games were reviewed worse than buggy games:

Lin and the team also found that while most reviews are written after around 13 hours of play, “the majority of negative reviews” are posted within the first seven hours. Additionally, free-to-play games see a spike in reviews after just one hour of play.

Linden Lab better have a SWAT team on call to handle unhappy reviewers on Steam! This is part of the new landscape, and they’d better be responsive.

So cross your fingers and say your prayers. We are entering a new era.

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Image by peter67 on Pixabay

UPDATE: Bagnaria has taken me to task for saying that scripting is “going backwards instead of forwards”. I have decided to post her comment in full in this blogpost, since people often skip the comments and what she has to say is important:

While I agree that Linden Lab should have waited a few months longer, I do not agree with what you are saying here regarding interactivity : “At this point, we seem to be going backwards, not forwards.” Here is why:

We have seen a large influx of new interactive experiences since Linden Lab introduced Simple Scripts about two months ago. Simple scripts have enormous potential. The best example I can give is Scurry Landia which is one of the most interactive experiences in Sansar right now. We made much of its game logic simple script compatible. Also many of it’s individual games can be completely wired up using nothing but the Linden Lab provided simple scripts. The Lab also provides the source code of all their simple scripts. FullSpectrum and many other creators are releasing dozens of additional simple script compatible add-ons that we created for everyone to use without having to code. That includes some more complex animation controllers, the ability to add puzzles, digit displays and very soon weapons and relatively soon vehicles. The key point is that any coder can add more script functionality in a way that can talk to other simple scripts. 98% of what one can do in Scurry Waters right now will be possible without writing any additional code.

When more people discover that simple scripts are like LEGO blocks that do not require writing any code, they will realize just how powerful that is to create interactive experiences.

The other part to that is that Sansar engine can not only host stunning visuals. It is doing a phenomenal job at handling all the scripts and animations we are throwing at it. Scurry Waters uses hundreds of scripts. Everything is moving and it just proves that it is possible to create engaging interactive experiences at this point and we are really just at the beginning of that accelerating evolution.

We are in the early stages, but I continue to be willing to invest my time in Sansar because I know how much is possible already and we creators are barely able to keep up utilizing all the new features we are given. In regards to interactivity Sansar is a very short distance away from becoming truly amazing and I do believe this will make enough difference to finally create a WOW.

So, as a result, I hereby give Linden Lab another check mark for item 4 on my list from last April…which brings it to a final score of 3½ out of 12.

SECOND UPDATE: I am getting feedback from various Sansar users today, who feel that I have been way too harsh and negative in this particular blogpost.

I want to stress that this is only one person’s opinion, not an official Sansar spokesperson’s point of view. I still remain a strong Sansar supporter, but I would be neglecting my duties as an independent social VR/virtual worlds blogger if I simply posted nothing but “good news” about Sansar, as some people want me to do.

There are indeed many truly wonderful things about Sansar, and I want Sansar to be a success! And please keep in mind that Sansar is still a BETA platform, and in constant development. There has been much good progress over the past two years. But I still feel—STRONGLY—that Linden Lab should have waited six months to a year before releasing Sansar on Steam. And I stand by my statement, and I feel I have supported it with my arguments. (Perhaps the tone was a little too sarcastic.)

When Linden Lab makes their official announcement, I will either update this blogpost, or (because this is getting ridiculously long as it is) I will start a new one. 

Editorial: Lessons Decentraland Can Learn from the 15-Year History of Second Life

Have you joined the RyanSchultz.com Discord yet? More details here


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Carl Fravel (whom I first met in Sansar, but who has since moved on to become a sort of unofficial ambassador for Decentraland), responded to me when I commented on the Cryptovoxels Discord this week that the creators behind Decentraland have not really paid attention to the history of Second Life, and the problems and scandals that SL has encountered in its 15-year history.

He asked me to give him some more details, which he has promised to pass on to the founders of Decentraland. Instead of a direct message to Carl, I decided to make this blogpost, in case other people were interested in my opinions. As you know, I have written extensively, and with a critical eye, about the Decentraland project in the past.

So, what can the folks building Decentraland learn from Second Life?

First, casinos. Linden Lab shut down the casinos in Second Life in 2007 after an FBI investigation into gambling in SL. I have already written about this on my blog:

I posted a comment to the busy Decentraland Reddit channel, reminding them that the FBI investigated gambling in Second Life, which had led to them shutting down online gambling a decade ago, and asking if anyone had stopped to think about whether the U.S. federal government would step in to stop Americans from gambling using cryptocurrency in Decentraland’s Vegas City district. That Reddit post was taken down by the moderators less than an hour after I posted it. I can only assume I was censored because they didn’t want to spook investors in their platform. I’m not impressed.

Now, Decentraland may be able to skirt around this by setting up in a jurisdiction where online gambling is allowed. However, you can bet that the FBI will get involved again if it is found that American citizens are gambling in Decentraland. They’re probably going to have to set up some sort of system to block users from certain countries; have the developers (and the people who contributed virtual land to the Vegas City district) stopped to consider this?

Second, “banks” and get-rich-quick schemes. Linden Lab was forced to ban “banks” in Second Life after reports of scammers making off with people’s investments (for more details, see number 10 on this list). Originally, Linden Lab’s excuse was: hey, we just host the software, and residents should avoid deals that sound too good to be true. But then, they were essentially forced to implement a ban after a story appeared in the MIT Technology Review. And, if Decentraland does not take steps to ban financial get-rich-quick schemes on its platform, it is likely that scammers with lofty promises will also descend upon it and set up shop. The world of blockchain/cryptocurrency is full of stories of people taking advantage of other people’s greed and ignorance. Remember what happened with BitConnect?

Third, ageplay. Linden Lab was forced to confront a public relations disaster when the news media reported that pedophiles were using the platform to engage in sexual roleplay with child avatars (see number 4 on this list for more details). The resulting scandal led Linden Lab to enact and enforce a strict ageplay ban.

To this day, when “Second Life” is mentioned, sexual roleplay tends to be the first thing that the general public thinks of; Second Life’s reputation has been pretty much tainted by that association ever since. Decentraland needs to think about this before a scandal hits, and set up similar bans, and a means of enforcing them.

Fourth, intellectual property and copyright issues. I have already written about this at length here and here. Go read those blogposts. I suggest that Decentraland put a report mechanism in place, as well as a procedure for dealing with DMCA filings. It will happen.

This is just a start. I suggest that the Decentraland founders and investors read through my list of the top 20 controversies in Second Life, and see what else they can learn from it.

Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.

George Santayana, The Life of Reason, Volume 1

Intellectual Property and Copyright Issues in Social VR/Virtual Worlds: A Follow-Up Editorial

Apparently, Ghoster (whom I interviewed previously) is quite peeved at me for, and I quote, “bashing [his] server and VRChat”.

I didn’t even realize he was upset with me until I started chatting with him today on his new Discord server, Hi-Fi Traders, which is set up much the same as his previous server, VRChat Traders: a forum where people seeking a custom avatar can connect with avatar designers, creators, and riggers. The services are quite popular, and some people likely make a good side or full-time income from custom avatar creation for paying customers.

Ghoster probably has a right to be angry with me, after what I wrote about intellectual property and copyright issues in virtual worlds. He might feel, and not without some reason, that it was a personal attack. (It certainly wasn’t, but I can understand where he’s coming from.)

And it would appear that I have now been banned from Hi-Fi Traders, and probably VRChat Traders, too. I was still on the Hi-Fi Traders Discord channel when I found myself suddenly kicked out.

Before I was unceremoniously booted off his server, I told Ghoster (twice) that I would gladly give him a guest blogger spot to post a detailed rebuttal of my original blogpost, but it would seem that throwing me out was the preferred approach. I still stand by my original blogpost, and the argument I am making today. Also, I am not singling out VRChat, either; I have also blogged about IP infringement on OpenSim-based virtual worlds, and what I have to say here applies to all metaverse platforms, not just VRChat.

All I have done is point out that people charging money for the creation of custom avatars, where they do not own the intellectual property, are operating on sketchy legal grounds. Ghoster told me today that the high number of concurrent users on VRChat makes it difficult to police this sort of thing. That’s true. But frankly, that’s not an excuse for clear-cut cases of copyright infringement.

Custom avatar creation is a sort of cottage industry, much like those peasants who did piecework on their weaving looms before the Industrial Revolution came along. That’s fine, and I fully and completely support that work. (Many people still make a living creating and selling content on Second Life after 15 years of operation, for example.)

And creating a custom avatar inspired by someone else’s intellectual property is okay. For example, Roger Rabbit in the film Who Framed Roger Rabbit is based on a mash-up of Bugs Bunny, Mickey Mouse, and Goofy:

Roger is a slender, white rabbit with large blue eyes, pink nose, a tuft of red hair who wears red overalls, yellow gloves, and a blue yellow polka dot bow tie. He is an amalgamation of various classic cartoon characters; taking Bugs Bunny’s cartoon rabbit form, Mickey’s gloves, and Goofy’s baggy pants. Animator Richard Williams described the process of creating him like an “American flag” with the red overalls, white fur and blue bow tie and American audiences would enjoy him subliminally.

But, if you make an exact copy of Mickey Mouse as a custom avatar for somebody and charge them money for it, don’t be surprised to find the Disney lawyers breathing down your neck (or, more likely, going after VRChat, High Fidelity, or whatever virtual world is hosting that avatar). Even worse, if you create a Mickey Mouse avatar modified in some X-rated way, you’re really skating on thin ice if someone reports you to Disney Inc. They don’t look kindly on that sort of thing.

And I do know that Linden Lab (for example) is monitoring items placed in the Sansar Store, to ensure that no copyright-infringing items are placed up for sale. (They do have Star Trek items up, but it is with the explicit permission of the Roddenberry estate.) In fact, very recently, a lovingly-detailed, fan-made recreation of the Enterprise from Star Trek: The Next Generation was pulled offline following a cease and desist from CBS.

As far as I am aware, VRChat is still not doing that sort of checking. (And giving it away for free isn’t an excuse.) They are opening themselves up to a possible lawsuit. So is any other social VR platform or virtual world that is allowing people to recklessly copy somebody else’s intellectual property without permission. And if the company owning the IP comes after a virtual world platform, they have no choice but to comply.

And kicking me off your Discord server, because you don’t want to hear that, isn’t going to change that reality one bit.

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You might not agree with it, you can protest it, but it’s the law.

Sorry, Ghoster. I hope you can forgive me over time. But it doesn’t change the facts. Your beef isn’t with me; it’s with the system. If you disagree, then put your efforts into copyright reform, not into a personal feud with me. Don’t shoot the messenger.