Editorial: Fasten Your Seatbelts, It’s Going to Be a Bumpy Night!

Yesterday’s announcement that Sansar is moving to Steam was a big shock, but it should not have been so unexpected. It’s clear that Linden Lab is under increasing pressure to show a profit from Sansar, after plowing years of work into the platform without getting much back in return. They simply can’t keep relying on the profit from Second Life to build Sansar indefinitely. Eventually, Sansar has to pay its own way.

Some people will say (in fact, they are already saying) that Sansar is not yet fully-featured enough to be on Steam. High Fidelity made the mistake of putting its product up on Steam well before it was ready, and it got savaged in the user reviews. Is Linden Lab really ready to take this fateful step now, rather than wait another six months or a year to further polish the platform? Why the sudden pressure to do this now, before the end of this year?

What surprises me is how quickly and easily Linden Lab is jettisoning its SandeX exchange. The delicate and intricate balancing of the Sansar economy was something that LL staff put a lot of time, effort and energy into (even going so far as to create a subsidiary called Tilia, which focused on payments and the compliance work associated with operating virtual economies). All of that work, or at least a good chunk of it, gone.

Obviously, integration with Steam was considered to be a higher priority than the SandeX, which was considered a key component of Sansar. Which leads to the question: What other major changes to Sansar are going to be required before its launch on Steam? 

Yesterday’s announcement has probably raised more questions than answers. Several content creators have already announced on the official Sansar Discord channel that they are taking a break, cashing out their profits, and watching from the sidelines as all this plays out over the next few months. Which is exactly what Linden Lab doesn’t want.

And, of course, the even bigger question is: What happens if moving to Steam doesn’t bring a significantly larger audience to Sansar? (You could argue that High Fidelity’s launch on Steam has so far had very little impact on its usage levels, aside from the monthly spike of users attending regular stress testing events.)

As Bette Davis says, “Fasten your seatbelts, it’s going to be a bumpy night.” A bumpy night not only for Sansar, but for all the competing metaverse platforms in this overcrowded and uncertain marketplace.

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Mark my words; there are going to be winners and losers, and it will not be pretty. I predict that one or more of the blockchain-based virtual worlds will be among the first to fail, given the current grave state of the cryptocurrency markets, but really, anything can happen at this point.

Oh, and by the way, in response to those people talking about how Linden Lab tried—and failed—to get Second Life on Steam way back in 2012, Eliot, Sansar’s Community Manager, said on Discord today:

I also saw some people commenting that trying to get SL on Steam didn’t work out. Well we’ve learnt from that experience. The announcement we made comes after months of negotiation with Valve. We have an active dialogue with them on this :thumbsup:

So, it would appear that this move has been in the works for quite some time, and it’s not an impulsive decision by any means. But no matter how well they plan, it’s still going to be a bumpy ride. Stay tuned. And fasten your seatbelts!

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UPDATED! Sansar Is Moving to Steam—And Dropping the SandeX

Sansar Steam

Linden Lab just dropped a major announcement tonight!

Titled We’ve come a long way together. We can’t wait for what’s next, here’s an excerpt:

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. We anticipate being able to get onto Steam by the end of this year. This is a huge step for us and we’re excited to be able introduce Sansar to an even wider audience.

In order to do this, we are obligated to make significant changes to how Sansar works, especially in how the Sansar Dollar and process credit system work. These changes, will also make the credit process for Creators far more consistent and predictable. The first change is that we will be discontinuing the Sandex as of December 4, 2018.

After that date, we will be moving to a fixed conversion rate model. Creators will continue to be able to sell their work for Sansar Dollars on the Store (and soon in experiences!). Eligible creators may convert some or all of their earned Sansar Dollar balance to US dollars at a rate of S$250 to $1, and then request a USD credit to be processed in 30 days. This matches Steam’s payment timeline.

We understand that this may have an impact on the amount of revenue returned to creators compared to the Sandex. However, we believe that in the long run our creators will significantly benefit from having access to the larger Steam user base. In addition, anyone who has created their Sansar account before December 31, 2018 will receive a legacy conversion rate of S$143 to $1 until December 31, 2019, after which the conversion rate for all accounts will be S$250 to $1.

In other words, Linden Lab has decided to drop the economic model pioneered by Second Life and its LindeX exchange. A content creator has reposted this update to the official Second Life user forums, saying:

A must read for any creators with money in their accounts or that sell things on the Marketplace. Since I have over 400 items on there it is going to take a fair amount of work to reprice things. Hopefully everyone still active there will know about this. Please spread the word.

Obviously, Linden Lab is betting the farm that putting Sansar on Steam will lead to an influx of new users with cash to spend. They’ve weighed the pros and cons and they’re willing to put up with the fees that Steam will charge, in exchange for a wider audience.

I simply cannot overstate what a major change in strategy this is. And it is a total surprise to me; I certainly wasn’t expecting it!

While I am still processing this news, what do you think? Please leave a comment on this blogpost with your thoughts and opinions, thanks!

UPDATE Oct. 30th: Landon McDowell, Linden Lab’s Chief Product Officer for Sansar, did answer a few questions in the official Sansar Discord channel. When asked if LL was going to remove Sansar Store transaction fees, he said:

Yes, the intent is to remove the store transaction fees in conjunction with this… The process credit fees will not be change[d].

When asked why they are implementing a 30-day delay in processing US$ credits, Landon answered:

The problem is that Steam operates on a 30-60 day window. If we keep it at a few days, we will be floating credit for 1-2 months. That’s an uncomfortable financial situation to be in.

And, this push sure sounds a lot like the “consumer launch” of Sansar I predicted back in April. And I note with dismay that there are still many things on my list that haven’t been implemented yet, that I would still like to see in place before this push to Steam and a much larger potential audience.

Interesting times, indeed. Stay tuned for more coverage as all this rolls out!