Tag: Linden Research

UPDATED! High Fidelity Invests in Linden Lab, the Makers of Second Life, and Philip Rosedale Rejoins Linden Lab as a Strategic Advisor

The Second Life website (image source)

Today, Linden Lab (more formally known as Linden Research, Inc., the makers of Second Life) dropped a press release:

High Fidelity announced today that it acquired an interest in Linden Research, Inc. (“Linden Lab”), the pioneering developer of the virtual world Second Life. The deal includes a cash investment and distributed computing patents. Members of High Fidelity’s metaverse team are joining the company, and Philip Rosedale, who is a founder of both companies, is also rejoining Second Life as a strategic advisor.

The transaction will help Second Life further scale its operations and strengthen its commitment to growing an innovative, inclusive, and diverse metaverse where its inhabitants’ ingenuity drives real-world value for themselves and others.

“No one has come close to building a virtual world like Second Life,” says Second Life founder and High Fidelity co-founder, Philip Rosedale. “Big Tech giving away VR headsets and building a metaverse on their ad-driven, behavior-modification platforms isn’t going to create a magical, single digital utopia for everyone. Second Life has managed to create both a positive, enriching experience for its residents — with room for millions more to join — and built a thriving subscription-based business at the same time. Virtual worlds don’t need to be dystopias.”

High Fidelity is the company Philip Rosedale founded after leaving Linden Lab. Its first product, an ambitious social VR platform called High Fidelity, failed to catch on and was shut down in early 2020. Its successor product (also called High Fidelity) is a 3D spatialized audio system for use in other metaverse platforms. So, when I’m talking about High Fidelity (HiFi for short), I always make sure to indicate whether I am talking about the company itself, its former social VR product (the old High Fidelity) or the new 3D audio product (the new High Fidelity)!

The website for the new High Fidelity (image source)

Wagner James Au, writer of the long-time virtual worlds blog New World Notes (from whom I first learned about this breaking news), has this to say:

Just got this message from Philip Rosedale, about the future of Second Life:

“I’m not back full-time, but it feels great to get to be talking to Lindens about design! I think the vital thing to focus on is demonstrating that a virtual world can scale to greater capacity while being inclusive and fair and safe for humanity.”

Exciting and welcome news, indeed! I will update this blogpost with more details as I acquire them. Stay tuned!

UPDATE Jan. 14th, 2022: The Wall Street Journal, in an article titled Second Life Founder Returns to Take On the Metaverse (archived version), reported yesterday:

Philip Rosedale in 2003 launched the online game where players using avatars can hang out, socialize with other players and make purchases. Second Life is a forerunner of the virtual worlds that big tech companies are now trying to create and that are often referred to as the metaverse. Mr. Rosedale is returning to the company he left in 2010 to serve as a strategic adviser and shepherd its expansion as the metaverse gains wider traction, he said in an interview…

Mr. Rosedale said that the business models underpinning some of the current tech giants, such as tracking user behavior to target ads, would be potentially harmful in the metaverse, which is more immersive than current digital platforms. “I think that there is a real genuine, existential risk associated with how that gets done,” he said.

Second Life may have had a head start on some of the metaverse companies it aims to compete with, but to some extent is the underdog. Second Life rolled out before Facebook was founded, but has hovered at around one million users since 2008, according to a company spokesperson. Meta’s Facebook, Instagram and other services sported more than 3.5 billion monthly users combined, according to its most recent earnings. Epic Games Inc.’s Fortnite videogame and game company Roblox Corp. , which are also making moves in the metaverse, have many times the number of users that Second Life has.

Brad Oberwager, chairman of Second Life parent company Linden Research Inc., said he is working with Mr. Rosedale to inject momentum into the business. Second Life already offers the ability for people to withdraw money from in-game sales into the real world, a feature lacking in some other emerging metaverses, which should attract users, he said. Coming upgrades focused on further improving the social and economic components of the game, such as the avatars and digital marketplace, promise to drive user growth, he added.

The Wall Street Journal article goes on to state that “Mr. Rosedale is bringing with him to Second Life a small cadre of developers, a number of patents and an unspecified financial investment from the company he founded in 2013, High Fidelity Inc.”

In an interview with c|net, titled Second Life founder returns to revamp his original metaverse, Philip goes into a little more detail:

Rosedale is going to be a “strategic adviser” for Second Life, while his company High Fidelity looks to infuse Second Life with some new ideas, simultaneously working on other ideas for future tech, including – at some point – VR again. “We’re announcing that we’ve shifted a group of seven people, some patents, some money. We’re investing in Second Life, to keep working on Second Life,” Rosedale told me. “Two of those patents are moderation in a decentralized environment patents, which is really cool.”

The reason for the shift is that Second Life still makes money and still has a considerably larger community than most VR platforms: It’s had over 73 million accounts created since it launched, and estimates of active users hover around 900,000. Rosedale sees the shift as solving problems while VR hardware still gets thought out. 

Despite the seeming success of the Oculus Quest 2, he still doesn’t think it’s enough. “The headset is so broken that it’s going to actually take, I think, five years to get to something that’s good,” he says, “and we as a startup would neither survive, nor would it make sense for us to sit around for five years.” He sees building up Second Life as a better platform that will be VR-optional until that magically perfect hardware arrives. 

The entire c|net article is well worth a read, by the way. This news has also been covered by publications such as The Verge, TechCrunch, VentureBeat, and CoinTelegraph.

Honestly, the more I read, the better this sounds! I think this is exciting news for both Linden Lab and High Fidelity, and I wish all involved every success in this endeavour.

UPDATED! Linden Lab To Be Acquired By an Investment Group Led by Randy Waterfield and Brad Oberwager

Please note that I am taking the entire month of July off as a self-imposed vacation from the blog so I can focus on my other work, except for sponsored blogposts, and major breaking news such as this. See you in August!

Randy Waterfield (left) and Brad Oberwager (right). Source: LinkedIn profiles

This evening, Linden Research (better known as Linden Lab, the makers of Second Life) dropped a bombshell press release: the small but profitable privately-held company which has been run pretty much independently since it was founded by Philip Rosedale in San Francisco in 1999, will be acquired by an investment group.

SAN FRANCISCO, July 9, 2020 — Linden Research, Inc. announced today it signed an agreement to be acquired by an investment group led by Randy Waterfield and Brad Oberwager. Closing of the acquisition is subject to regulatory approval by financial regulators in the U.S. related to Tilia Inc.’s status as a licensed money transmitter as well as other customary closing conditions. Upon closing, Mr. Waterfield and Mr. Oberwager will join the Board of Directors of Linden Research, Inc.

“We’re excited for this new chapter to begin. We see this as an opportunity to continue growth and expansion for Second Life and our money services business Tilia,” says Linden Lab CEO Ebbe Altberg. “We’re grateful for the ongoing support from our community, business partners and investors. Now more than ever, there is increased recognition of the value and utility of virtual worlds to bring people together for safe, shared, and social online experiences.”

“Both the company and its virtual world community have a unique culture and creative energy that remain important to the long-term success of Second Life,” says Brad Oberwager. “There’s a bright future for both Second Life and Tilia and we’re excited to help fuel these growth opportunities.”

“Since its inception 17 years ago, Second Life has been a pioneer in the concepts of virtual societies, land and economies,” says Second Life founder Philip Rosedale, who is now CEO of High Fidelity. “I’ve known Brad for 14 years personally and professionally, and I’m confident he will bring his passion and proven strategies to help Linden Lab achieve new heights in distribution, scale, and quality while remaining true to the original vision, creativity, and community that makes Second Life unique and special.”

Mr. Oberwager has spent his entire career in technology and consumer-focused companies. Mr. Oberwager is the founder and Chief Executive Officer of Jyve, a Silicon Valley based technology company. Prior to Jyve, Mr. Oberwager owned Bare Snacks, acquired by PepsiCo. Mr. Oberwager is an advisor to several technology start-ups and sits on the boards of several technology and CPG companies.

Mr. Waterfield is the Chairman and CEO of the Waterfield Group. The Waterfield Group has invested in over 100 technology, financial, insurance, bank and other companies.

One commenter on the news over at the RyanSchultz.com Discord server noted:

One of the new investors in the group that bought Linden Research [Linden Lab] is Randy Waterfield, the Wookey guy.

Wookey, of course, is the company that bought Sansar from Linden Lab earlier this year, after the platform went through two rounds of staff layoffs and almost folded.

What does all this mean? Damned if I know! I’m quite sure many Second Life users will be wondering what it all means as well. New owners could mean a shake-up at Linden Lab, and we all know how much some Second Life users hate changes (witness the fuss last year over Tilia).

Of course, it might also be the best thing to happen to the platform, a new opportunity (with fresh investment!) to take it to the next level of growth.

Interesting times, indeed! Stay tuned.

UPDATE 11:08 p.m.: The news took many by surprise, including the team who work on the most popular Second Life viewer program, Firestorm, who tweeted:

Please don’t ask us, this was news to us too.

Longtime SL blogger Inara Pey reported:

I reached out to linden Lab on finding out the news, but was informed the company has no further comment on the acquisition beyond the press release.

However, given that the acquisition will see Mr. Waterfield and Mr. Oberwager joining the board, I would anticipate that – given the nature of acquisitions – it is unlikely there will be any immediate visible changes to Linden Lab, Second Life or Tilia Inc., and, and the company will likely to continue to operate in a “business as usual” mode with regards to both Second Life operations and the community for the immediate future. That said, there will likely be a lot of speculation as to the future of SL, together with concerns / fears as to what the longer-term future might be.

While it is purely speculative on my part, I would hazard a guess that the acquisition will take into consideration the increased interest Second life has witnessed over the last year(ish), and particularly as a result of the SARS-CoV-2 pandemic, and will see in inflow of cash for the company that will allow it to (hopefully) meet its immediate goals with both Second Life and Tilia Inc., and allow both platforms to continue to be developed.

And (of course!) there is an ever-growing comment thread over on the Second Life Community Forums.

UPDATE July 10th, 2:08 p.m.: In response to the intense level of speculation on the above-mentioned comment thread on the SL community forums, Brett Linden, Senior Director of Marketing for Linden Lab, made the following statement:

Good day, all!

Just jumping in to respond to a few of the comments…

A few folks are speculating that this is the end of SL and nothing could be further than the truth. Any talk of dismantling or radically changing the fundamentals of SL that we know and love is inaccurate. While we can’t get into specific details about the deal itself, I want to emphasize the fact that this keeps Linden Lab as an independent venture led by two investors who have a great deal of awareness about what SL is and isn’t. They are excited to join and help us grow both SL and Tilia while also respecting and recognizing the needs and sensitivities of the existing culture and community. 

And, in response to a question about when more detailed information would be forthcoming about the acquisition, and when the new owners would address the Second Life community, Brett said:

Great question! We look forward to being able to share more as soon as we can and I know that Brad is eager to meet the community as we get closer to the closing/approval date.