Comments on: M&A inside Second Life

By: Nicholas Lovell

Nicholas Lovell — Thu, 22 Jan 2009 20:36:10 +0000

I'm not so sure I agree with you on this one, Nic (which is unusual).

Linden Labs already offers transactions in-world. This allows customers and merchants to trade seamlessly whether they are in Second Life or in the web. That just seems likely to increase transactions to me.

It also shows Second Life entrepreneurs that there is a potential exit, which seems likely to promote rather than stifle innovation.

More at http://www.gamesbrief.com/2009/01/second-life-b...

By: Second Life businesses get acquired - by Second Life » Games Brief

Second Life businesses get acquired - by Second Life » Games Brief — Thu, 22 Jan 2009 14:23:54 +0000

[...] Linden Labs has acquired two virtual goods business within Second Life. [...]

By: Nicholas Lovell

Nicholas Lovell — Thu, 22 Jan 2009 13:36:10 +0000

By: brisbourne

brisbourne — Wed, 21 Jan 2009 17:47:52 +0000

Thanks Harry - you are right, this doesn't look to good for SL

Nic Brisbourne
Partner, DFJ Esprit
Email: nic@dfjesprit.com
Tel: 07990 567 993
Blog: www.theequitykicker.com

By: HH

HH — Wed, 21 Jan 2009 12:44:56 +0000

I can't help but feel that the primary reason for Linden Labs to acquire a virtual broker is to help them maintain the illusion that there is a genuinely interesting economy in Second Life - i.e. moving the story on from being "Look, people can make money in Second Life" to "Companies operating in Second Life have been acquired".

I find it difficult to get a grip on the realities of the economics of SL, but some clues from http://secondlife.com/whatis/economy_stats.php#... show that, for Dec 08, 940,000 people logged in, of which 60,000 had a 'positive Linden Dollar flow' (ie theoretically made money). It's not clear whether this 60,000 includes the premium members who get given free money each month (my guess is it does), so I reckon we're looking at 20k or so people actually making money (Linden Dollars) in that month (ie 2% of people).

To me, that doesn't look like an economy (2% of people having net positive cashflow), it looks, at best, like a bad videogame with a small percentage of its users making money from user generated content. Like Half Life, only not as much fun. At worst, it looks like the emperor's got not clothes on and this is just a pyramid scheme reliant upon the brilliant marketing conceit of persuading the press that there's something interesting at work. And what better story in today's uncertain climate than the acquisition of a company in a virtual economy?