Linden Lab is hiring a Senior Compliance Analyst for Sansar, and the job description vividly illustrates just how deadly serious a job like that has become. Used to be that a role like this might focus mainly on everyday consumer issues like credit card fraud/misuse (i.e. kids secretly using their parents’ cards to buy virtual gold). Nowadays, however, it reads like a job description for someone in the FBI.
The ideal candidate for this position will be responsible for supporting and maintaining various compliance activities and programs, including the Customer Identification program and associated vendor management processes. Responsible for monitoring and assessing compliance issues concerning the patterns and trends associated with money laundering and other potential compliance-related risks. Assist with mitigating money laundering, terrorist financing, fraud related risks, and gathering data and documents for state exams.
This posting comes about six months after a woman who was Linden Lab’s information security director, Kavyanjali Pearlman, was let go by the company. Ms. Pearlman later filed a lawsuit against Linden Lab (according to a WIRED article on the lawsuit):
A lawsuit filed by the former information security director of Linden Lab—the company behind the online virtual world Second Life, which, yes, is still a thing—claims the company mishandled sensitive user data and turned a blind eye to…the potential for money laundering.
In a lawsuit filed in San Francisco County Superior Court on July 30 and served to Linden Lab on Tuesday, Kavyanjali Pearlman, a security researcher who joined Linden Lab from Facebook in 2017, says that she raised these issues during her tenure, and was met with hostility. The suit alleges company executives retaliated against her for flagging cybersecurity risks and potential violations of anti-money-laundering laws…
“While we will fight her alleged claims in court, we deny any allegations that the company has engaged in any illegal activity,” said Linden Lab spokesperson Brett Atwood. “Ms. Pearlman left the company on March 15 only after she was given the opportunity to improve her work performance. We look forward to all the facts coming out in a court of law,” he said, declining additional comment because of the lawsuit.
Which leads me to wonder: how are the other metaverse-building companies responding to the same issue of potential money laundering happening on their platforms, using their in-world currencies? Particularly if they are based in the United States, they are subject to the same American regulations as Linden Lab. How are they responding?
The more I monitor all the social VR and virtual worlds I cover on this blog, the more I realize that any company building a social VR platform or virtual world has got to be able to juggle an overwhelming number of technological, political, and legal issues, all at the same time. I’m quite sure that a few of the newer platforms have probably never even stopped to consider money laundering and other financial compliance risks. It’s time they woke up to a new reality, before federal agents come knocking on their doors.
Ebbe Altberg, the CEO of Linden Lab (the makers of Second Life and Sansar), recently gave an interview to Tonya Hall of ZDNet:
A couple of quick facts from the fifteen-minute interview:
Ebbe Altberg’s previous employment history includes stints at both Microsoft (12 years, working on Microsoft Office) and Yahoo! (where he was a senior vice president);
Last year, Second Life users cashed out $64 million in earnings;
Second Life has had over 200,000 virtual marriages in its lifetime!
Ebbe spends the bulk of the interview discussing the in-world economy of Second Life and Sansar (which Linden Lab is currently building based on the lessons learned from the 16 years of experience the company has gained by operating Second Life). He also talks about recent corporate branding partnerships in Sansar, such as Monstercat, Sanrio (the brand behind the Hello Kitty phenomenon) and Levi’s.
It’s clear that Ebbe wants to pursue more corporate partnerships and branding opportunities with Sansar. One thing that puzzles me is that this video, posted on Sept. 24th, 2019, had only had 22 views so far on YouTube! So please give it a watch, and spread the good word. Thanks 😉 perhaps we can send a few more companies Ebbe’s way, to strike a few more deals!
There’s a good reason for that. I still love Second Life, and I still find lots to bring me back, time and again. For all the bells and whistles of the newer social VR platforms, I find myself coming back to SL for more.
In fact, I am going to make the argument that Second Life, at sixteen years old, is the perfect model of a mature, fully-evolved virtual world. Whether through design, luck, or accident (and really, it’s a combination of all three), founding CEO Philip Rosedale and his team at Linden Lab created something that hundreds of thousands of users still use regularly, despite Second Life routinely being ignored or derided by the mainstream media.
Looking right now at the live Steam concurrency stats, if Second Life were listed there it would be in the top 10 games, between Rocket League and TF2. And we’ve been at that concurrency level for more than 10 years.
Much credit lies both with Philip Rosedale for his original, pioneering vision of what a virtual world could be (and some very smart early decisions, such as allowing people to create and sell their own content to other users). Much credit must also go to the current CEO of Linden Lab, Ebbe Altberg, who has capably and competently led his team through many changes in recent years, building on Philip’s foundation. (There were a few CEOs in between, too, but we don’t talk about those. 😉 )
We can take a look at where Second Life is now, today, for a glimpse at the future of social VR/AR/XR platforms and virtual worlds.
What lessons can we take from SL? I can list four off the top of my head.
First, having a well functioning in-world economy is CRITICAL. Once people realized that they could actually make money in Second Life by creating and selling content to other users, SL took off like a rocket. And you can bet that the newer platforms like Sansar, High Fidelity, Sinespace, Decentraland, and Somnium Space have all been busily taking notes based on that early success. Even VRChat, which lacks an in-world economy, effectively proves this point, by having a booming off-world economy centered around the making and selling of custom avatars. The lesson here is simple: either build a marketplace and an economy into your virtual world, or your users will build one around it anyway, in spite of you!
We can expect that newer social VR/AR/XR platforms will develop highly detailed working economies and marketplaces for user-generated content (including comprehensive item permissions systems), whether or not they embrace blockchain and cryptocurrencies. Second Life proved that this is a key, vital ingredient to virtual world success.
Second, it’s ALL ABOUT THE PEOPLE. One of the reasons that Second Life has had such extraordinary longevity and success is that people have made an investment in the communities that they belong to. Whatever you are—a Gorean, medieval, steampunk, or science fiction roleplayer; a furry, a tiny, a Na’vi or a Bloodlines vampire—you have likely already found your tribe in Second Life! And that community is what brings people back, time and time again.
Also, Second Life has proven that people will spend a significant amount of time and money on customizing their avatars to their liking. There’s a whole industry built up around avatar customization, as even a brief glance at the SL Marketplace, with its hundreds of thousands of items for sale, will attest.
One of the reasons that OpenSim-based virtual worlds have struggled so much (with so many grids closing unexpectedly, like the rather sad InWorldz saga) is that they attract so few people compared to Second Life. You don’t make too many return visits to a grid when you can’t find anybody else to interact with. And this is where the network effect comes in: the more people who use a platform, the more people it draws in, and the more valuable that network becomes. Often (but not always), these successful growing networks were earlier entrants into a particular marketplace, like Second Life was.
And obviously, Facebook hopes that they can leverage their massive existing social network to give their upcoming social VR platform Horizon an advantage over competitors. If Facebook can get even a tiny percentage of their Facebook, Instagram and WhatsApp users to move to Facebook Horizon and use it regularly, they will be more successful than any other social VR platform to date (even VRChat). Facebook has the resources to dominate markets and crush competitors, and they will not hesitate to use every tool and tactic at their disposal. However, as I have said before, innovative social VR platforms will still be able to survive, if they can offer something that Facebook Horizon cannot.
Third: The early adopters of the various social VR/virtual worlds are the best ambassadors and promoters of the platforms. Engaged, raving fans are a virtual world’s best and most effective advertisement! Savvy metaverse companies court these early adopters with varying levels of success.
And you alienate those raving fans at your peril! High Fidelity is unfortunately learning this lesson the hard way. The current level of ill-will surrounding the project, spread by former users who are highly critical of the various mistakes and failings of the company, is an additional hurdle that the company will have to surmount in order to succeed.
Fourth, don’t be too quick to judge or dismiss a platform based on early impressions! I love to share the following video with people who just assumed that Second Life started off as an instant success. It dates from 2001, two years before SL opened to the public, and before it was even called Second Life (back then, it was called Linden World):
It took Philip Rosedale and his team at Linden Lab years and years and YEARS of hard work to get to the point where it finally took off (around 2006-2007).
And likewise, don’t be too quick to dismiss newer platforms that still might be a bit rough around the edges. (And yes, I am as guilty of this as the next person.) Some platforms might not look like much right now, but they will likely also take several years of concerted effort (by the companies behind them and their early users), before they reach a point where they become successful, profitable products.
I have noticed in covering the social VR/virtual world marketplace on my blog that here is such intense pressure on metaverse-building companies to become “the next Second Life”. Platforms are often judged harshly if they do not immediately get high concurrent users figures right out of the starting gate. That is completely unrealistic. The smarter companies are playing the long game here: building a quality social VR/virtual world slowly and methodically over time, and slowly but steadily attracting an audience. That’s what happened with Second Life!
A perfect example of this strategy at work is NeosVR, which is doing some insanely creative things, like this most recent example: an actual working portal gun! I mean, just how freaking cool is that?
NeosVR is still not on a lot of people’s radar yet, but they are attracting more and more users who are very impressed by what they can achieve on this platform. In many cases, these are features that other social VR platforms are not even close to matching! That’s why I believe that NeosVR will have a bright future. As Ralph Waldo Emerson apparently said, build a better mousetrap, and the world will beat a path to your door.
So these are just a few thoughts. Examine Second Life carefully, and you too will gain valuable clues into what the mature, fully-evolved social VR/AR/XR platforms of the future will look like. You can count on it!
In the early, pre-mesh days of Second Life (before 2011), avatar clothing designers had it pretty easy. All clothing for the classic, system avatars was applied on overlapping layers, with extra prims for features like sleeves and collars and flexiprims to simulate flowing clothing like skirts and cloaks. It was simple, everybody knew how to use it, and best of all, it worked with any combination of avatar body sliders: fat, thin, muscular, short, tall…
When mesh clothing started to make an appearance, around 2011, it was still mostly designed for classic, system avatars. With the addition of an alpha which removed the parts of your body covered by the outfit, it still worked well. Clothing creators pretty much adhered to the agreed-upon five “standard sizes” for classic avatars, which meant that if your avatar was one of these five sizes (i.e. adjusted to fit a specific predefined set of body slider numbers), your clothing pretty much fit you perfectly. A more complicated system, but still fairly easy to understand and use.
However, with the advent of mesh avatar bodies, avatar fashion designers faced a much more daunting task. Clothing makers now had to learn how to rig their outfits for an ever-growing, seemingly endless number of mesh bodies. Even worse, clothing rigged for a specific mesh body might not work with a different mesh body!
That’s a whopping 15 options for women and 6 for men! Most avatar fashion designers decided to deal with this situation by restricting the mesh bodies that they would design for.
In most cases, for women’s clothing, this has meant rigging for only six of the most popular mesh bodies:
(An increasing number of designers are now also creating clothing to fit the new Legacy avatar by The Mesh Project, in come cases dropping one of the “top Six” mesh bodies listed above to incorporate it.)
Obviously, this situation in Second Life is far from ideal, either for creators or consumers. Newer mesh body creators like Altamura must feel like they’re bashing their head against a brick wall trying to get designers to create clothing specifically for their bodies.
Linden Lab wants to avoid this nightmare in Sansar, by eventually releasing a completely adjustable human(oid) avatar on which all Marvelous-Designer-created clothing will fit. However, at a recent in-world Product Meetup, it was revealed that Marvelous Designer clothing is limited in how much it can be adjusted. For example, while it can be easily scaled (resized), it will not be possible to make just the sleeves of shirts or just the legs of pants longer, for example.
At the moment, we are all in an uncomfortable interim situation with human avatars in Sansar, waiting for the full body deformation capabilities that Linden Lab tells us is coming within the next 4-6 months.
In the meantime, we are already beginning to see some Sansar avatar fashion designers start to make multiple versions of clothing for different popular custom avatars (which are non-adjustable/static), like this Harley Quinn outfit from Daisy Winthorpe:
Frankly, until Linden Lab releases the final version of its human avatars with full body deformation features, I am reluctant to buy anyclothing from the Sansar Store. There is also going to be a trial-and-error period where we figure out what works and what doesn’t with these upcoming avatars. Hopefully, incorporating Marvelous Designer clothing will still prove to be a satisfactory solution for most people.
Linden Lab is working hard to try and save avatar clothing designers from the problems that have occurred in Second Life with multiple competing brands of mesh bodies. However, it might still happen that we will see the same problems happen all over again in Sansar. Only time will tell. Let’s keep our fingers crossed and hope for the best.