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Second Life Scores $11 Million 59

Posted by Zonk from the virtual-book-readings-for-everyone dept.
News.com reports that Second Life, the virtual world run by Linden Labs, has netted $11 Million in venture capital funding from the Globespan Capital Partners group. From the article: "The company makes its money by charging players use fees for land they buy and build on. For now, the company isn't profitable, and it's not clear when it will be, said Catherine Smith, Linden Lab's director of marketing. However, she told CNET News.com that Linden Lab plans to use its new funding for aggressive international expansion, as well as for hiring intended to boost its infrastructure. "
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Second Life Scores $11 Million More

Second Life Scores $11 Million

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  • Fun (Score:2, Insightful)

    by Eightyford ( 893696 )
    Is the game any fun?

    • Re:Fun (Score:1, Informative)

      by Anonymous Coward
      It's basically an IM client built around an RPG game engine. "fun" depends on what you do in it.

    • Before I answer that question, answer this one: (Score:1, Insightful)

      by Anonymous Coward
      Is slashdot any fun?

      People generally expect different things out of a glorified chat room than they expect out of, say, Halo 3. But that doesn't mean the people using the glorified chat room spend any less time there, or that they enjoy it any les.
    • Being that the game is wide open and totally driven by user content, it can be as fun as you can make. Second Life is currently running a Game Development Contest [secondlife.com] that looks like it could have some very entertaining entries.
    • Imagine a huge IRC channel from a few years back. Translate that into an environemt where you have a 3D avatar and can create things. The second part seems great in theory, the only problem is mixing it with the first. Not to mention that Linden Labs seems to move at a glacially slow pace at implementing new features, barring attacks on the grid (which have happened before).

      If you can find some intelligent people to hang out with, it can be a blast. You just have to steer clear of the billions of shop

  • Espically because, even if it ends up being less expensive to play, it feels more expensive up front. I don't know that I could ever bring myself to drop $100 for something in a game, even though I pay more than that per year to play World of Warcraft.

    Now THAT is a successful business model. Charge people $15 per month, which doesn't feel like a lot so they pay it happily. Thus far, it's successful to the tune of about $1 billion per year in revenues.

    • Re:It just seems like such a stupid idea to me (Score:1, Interesting)

      by Anonymous Coward
      $15/month has always felt like a lot to me... but maybe that's because I always multiply the monthly fee by a year to figure out how much it's actually setting me back in any given tax year... This is why I don't play online games I have to pay for... I subscribe to XBox Live, but that's just $50/year--the same cost as one new game. That I'm ok with, but spending the same amount I'd have to pay to buy 2-3 new games... I don't think so... ESPECIALLY when they also make you buy the software. My rule is that e

      • Re:It just seems like such a stupid idea to me (Score:4, Insightful)

        by XenoRyet ( 824514 ) on Tuesday March 28, 2006 @03:17PM (#15012464)
        Not that I'm nessisarily disagreeing with you, but I sometimes work the equation the other way as well. In a cost per hour versus other common entertainment sort of way.

        Here's how that one works out. Movie + popcorn is roughly $15 for 2 hours of entertainment, which is $7.50 per hour. I'm figuring on 10 hours a week for an MMO. That's an hour a day on weekdays and 2 and a half hours on weekends, which is probably overly conservative. So that's 40 hours a month, which works out to roughly $0.37 per hour. Obviously that equation gets better if you play more, and vice versa.

        You may not go out to movies eather, I don't much do it myself, but I do find that looking at the MMO fees in that way can provide perspective.

        • I use a different method...

          A Tale In The Desert cost me an average of 3 hours per day weekdays, and 5-6 on weekends. call it an average of 3.5, since I didn't always play both days on weekends.

          3.5*365=1227.5 hours a year, which comes out to a little over 7 weeks, or almost 2 months.

          Some people say time is money,but I think time's worth a lot more. That's time I could've spent with my family, or drumming, writing songs, remodeling the bathroom, etc.

          Once I started to look at it that way, "grinding" started to
        • (Just a note--I posted the parent of the one I'm replying to; just posted as AC on accident). That out of the way... I do the same thing you do in terms of value by hour of entertainment. However, I just don't have the time (any more) to spend 10 hours or more playing an online game each week. I have maybe 2-3 hours to put into gaming each week. Plus, I like a new experience every so often and don't want to spend the amount I could spend on 2-4 games on just one game. While it can be argued that with online
        • Comparing the cost of a form of entertainment (MMO in this case) to another form of entertainment that is notorious for charging entirely too much for their product (movie theater in this case) isn't perspective, it's rationalization. It's just like those advertisements that try to get you on your universities meal plan by claiming it costs the same as taking your child and 8 to 10 of their friends for dinner at a fancy restaurant. While technically true, I don't know any parents who take 9 to 11 teenager
    • Not sure where the $100 came from. Second Life's basic subscription plan is a $10 fee for lifetime (not annual, not monthly) access. $6 to $10 per month buys you additional abilities in-game. The software is a free download. Doesn't address whether or not you would like it, of course. Second Life's problems are not so much from their fee structure as they are because of the niche market they occupy - they aren't so much a game as they are an environment for socializing and creating.
      • Not sure where you got those figures. I have spent ZERO dollars. Zip. Nada. It makes it a lot easier to calculate profit when there is a $0 investment.

        I've coded up a few casino and lottery type games, and sold them or run them myself. I joined the game a little over a month ago, and have gone from COMPLETE newb to a profit of over $80 USD.

        I'm not going to retire off of it, but I've had a lot of fun coding up objects and testing them (I'm a programmer "in real life", by the way). And to get paid for h
        • I got those figures from the Second Life website. [secondlife.com] Your post says that you have some deal by which you are not charged a monthly (or the one time) fee. If so, I would be interesting in finding out how that is possible. That page mentions a free basic account, but I had to ante up the $9.95 to make it last beyond the first week, so I assumed it was referring to the 7-day trial period. Either that or the Lindens need to put more work into their accounting system.

          Or is your point that you have been able to

          • Re:It just seems like such a stupid idea to me (Score:4, Informative)

            by jandrese ( 485 ) * <kensama@vt.edu> on Wednesday March 29, 2006 @12:14PM (#15018206) Homepage Journal
            You're misreading the account structure.

            Free accounts are just that, free. They last forever, and they earn L$50 a week if you log in during that week at all. They don't expire, you can continue using the free account for as long as you like. The limitations include lower limits on the currency trading system and the inability to own land outright, although there are many people in SL who will gladly rent you land.

            Premium accounts earn L$500/week weather you log in or not. They cost $10/month. You also get 512m^2 of land ownership (tier). This means you can own 512m^2 of land (after you buy it). If it's your first account, you can buy "first land" which costs L$1/m^2. If you want to own a larger plot of land, you have to tier up, which basically means paying more to LL each month to own more land. Eventually you can get to the point where you own an entire server's worth of land, but it'll run you an extra $200/month. Tier is the primary way LL makes money on SL.

            There are other limitations. The complexity of the objects you can build permanently on the land is limited by how much land you own. All objects in SL are built out of simple geometric shapes called primitives (prims). There is a limit of a bit over 100 prims per 512m^2. While you can make some fairly interesting things with only 100ish prims, most of the really impressive stuff in the game uses thousands of prims.

            SL is less of a game and more of a toy. If you love building stuff out of blocks, this is seriously the game for you. It's like getting to play with legos and then showing it to the whole world. One thing I should point out before anybody gets the wrong idea: You can distort a prim quite a bit, making it far more interesting to play around with than simple static blocks. :) If you're not the creative type and you get bored unless there's some monster that needs slaying, then don't even bother installing SL. There's nothing for you there.
    • Paying real money for Linden dollars in Second Life is a stupid. It is quite easy to make money in the game. Especially if you have any programming or graphics skill. I have started a little self sustaining business for myself selling virtual items I have created. I am currently averaging around $50 real money a month and have never paid in a single dollar. Not huge, but better than paying money to someone to play a game. Here is a Wired Article [wired.com] about some of the biggest money makers in the game.
  • "For now, the company isn't profitable, and it's not clear when it will be, but, hey, here's eleven million dollars. Go knock yourselves out."

    Did I miss something? Is it 1995 again? Is money falling from the sky for any unprofitable business which is somehow related to the Internet? Will Ion Storm be opening its doors again?

    • Will Ion Storm be opening its doors again?

      Yes.

      Didn't you see the "John Romero is going to make you his bitch... 4 realz dis time yo" advertizing campaign for Daikatana 2?
    • Hmm, party like it's 1995...uh not exactly. But it does seem that the venture capital tends to follow whatever is hot at the moment. And for better or worse, the success of WoW has probably raised the profile of virtual worlds, hence the VC interest in things like Second Life. Now obviously, SL and WoW are quite different, but the social networking aspect of SL and an above board real money trade for virtual items probably makes SL particularly attractive.

      I don't know if SL has profit potential or not, but
    • Did I miss something? Is it 1995 again? Is money falling from the sky for any unprofitable business which is somehow related to the Internet? Will Ion Storm be opening its doors again?

      Well one thing to consider is the business model and goals behind a business. Yes in the late 90s, if you had a .com in your name you got money.

      Linden labs is trying to bring more business into the SL world. For about 1 yr now, some schools have used private game sessions to teach physics. I know of one college that used SL

  • why pay someone... (Score:5, Funny)

    by Chimera512 ( 910750 ) on Tuesday March 28, 2006 @02:46PM (#15012232) Homepage
    for a second life when i have a hard enough time paying for the first one?

  • Linden's Money Tree (Score:3, Interesting)

    by Wanderer1 ( 47145 ) <wanderer1@p o b o x . c om> on Tuesday March 28, 2006 @02:46PM (#15012234)
    I strongly believe that Linden will become profitable soon by reaping money from what amounts to a foreign money exchange tax. What I'm not sure about is whether they'll be able to balance what makes Second Life compelling against the requirements of external shareholders.

    SL is very much an idealist playground. Even without external forces calling for profitability, there will be many challenges to maintaining a thriving community.

    However, whether SL ultimately becomes profitable without losing appeal - or whether it sinks, the lessons learned will be worth it.
    • As should have been pointed out multiple times already:
      Second Life's main grid (adults only) is already turning a profit, but LindenLab isn't profitable as a whole (yet ?).
    • There's the rub. In almost all games, there's a clear objective: save the kingdom, kill the space mutants, escape the zombie island, become the best warrior in the whole land. With Second Life having such a super-wide set of options, it can become underwhelming. I remember creating my character, flying around for a bit, then just realizing: "OK, what now?"

      There was nothing for me to do except explore, which I did for about 10-15 minutes before I got bored. What do I "do"? Do I need to get a job? By which m
      • I think you went into it with the wrong expectations, which may be due to Linden Labs' marketing, or perhaps simply because there aren't any other multi-user environments quite like it.

        It's not an MMORPG in any sense of the world. It's basically just a virtual environment, that provides tools and a world to use them in. The only 'goals' are the ones the users feel like setting themselves.

        You don't NEED to own land to build, as there are public areas provided to do so, but in order to keep items in-world o
  • Sounds like they just got a second life!

  • From the Money-Down-The-Rathole dept. (Score:5, Insightful)

    by KimiDalamori ( 579444 ) on Tuesday March 28, 2006 @02:53PM (#15012287)
    Has second life ever made any profit, ever? Granted that the people who invested think that there is money to be made in 2nd life, but I see 12-year olds running virtual brothels ( http://www.alphavilleherald.com/archives/000049.ht ml [alphavilleherald.com] ) as the game's only economic vehicle for making any sort of US currency. I suggest that if they want to blow money, I have a bridge in a MUD that I can sell them.
    • ...but I see 12-year olds running virtual brothels...

      That link was worth reading, if only for:

      I can't believe this got linked from another site, **let alone** one of semi-respectibility, like Penny Arcade.
      Somebody thought this was worth dropping $11 million on?!?!?
    • The link is about TSO, by Maxis. TFA is about Second Life, by LindenLab.
    • Only in foolish venture capital world does this logic make sense:

      "Right now we're losing money on every user, since we don't charge most users for access and and our operation is EXTREMELY bandwidth and server-side intensive. But, not to worry. We're going to fix this by attracting more users."

      -Eric

    • If you want to believe the post above, I have a bridge in FUD to sell you.

      You seem to be mushing (har har) all virtual world games into one with your comment. Alphaville for example has nothing to do with Second Life. Alphaville is in the Sims Online - which is not Second Life.

      There IS an economy in Second Life, and it's based on "Linden Dollars". Players have to pay REAL dollars to Linden Labs for an account, but only if they choose to own land.

      You might want to read up on Second Life's economic system

  • Cool (Score:1, Insightful)

    by Anonymous Coward
    Second Life is a great concept, and playing it one cannot help but think of the amount of potential it has. Large amounts of that potential are only being held back by logistics issues-- one wonders if they had just slightly more resources to work on the clumsiness and poor documentation of their scripting interface, or the application performance issues, how much better (and potentially more mainstream-friendly) Second Life could be.

    Hopefully this new cash inflow will be used to bring Second Life toward it
    • Linden is a company of great talk and promises and terrible at delivery. I still log in every month or two to see if they've fixed some of the problems, but they haven't. If anything it's gotten worse as they pile on new and useless features. It does suck, because making stuff is a lot of fun when the lag and bugs aren't destroying the experience.
      • Comment removed based on user account deletion
        • I consider lag going into a sim and having it take two minutes to finish drawing. Your latency may be 200ms, but that really doesn't have anything to do with how laggy the game is.

          There are definitely more bugs than an issue with the mute list. The physics engine in the game is implemented terribly. They've been saying the upgrade to Havok 2 is just around the corner since I started logging in, which was a while ago.

          Look at the issue resolution voting area. People vote and vote and nothing gets done. Well,
  • I struggled with Second Life for a few days before becoming tired with the hideously bad performance. In addition to the player models looking ugly and out of date the game was slow as molasses even with alot of the settings turned down to nubs.

    Oblivion runs fine on my machine with medium settings so there's no excuse for a game as ugly as Second Life to run so poorly.
    • Comment removed based on user account deletion
      • You've said this a couple of times, can I ask you to explain this? What exactly is 'pre-rendering' in this context, that Oblivion can utilise, but SL cannot? The only prerendering I've heard about is in FMVs and cutscenes, but Oblivion is a full 3D game.

        (Not a flame, just curious).
        • All the content of second life is stored on the Linden Labs server and has to be pushed across the internet to you in real time (hence the biggest limiting factor in SL isn't your computer power, it's your bandwidth). Oblivion and even most MMORPGs store most of their textures, sounds, graphics, etc. on your local machine with only minimal information going back and forth on from their server to you, and vice versa.

          So, odds are, it's not your system that's the problem--it's either your bandwidth or Linden

  • yes it fun (Score:2, Informative)

    by objwiz ( 166131 )
    I've been playing SL for aboug 2 1/2 yrs now. I dont play every day but I am active. I used to buy land lots, build homes on them and then sell the lots for $. Recently I converted most of my linden dollars (game $) into USD. Ive made enought to pretty much cover my last 2 yrs of costs. It has a huge social network, much of what goes on there centers on social events.

    The entire SL universe is the result of player creativity. Everything there (except the land itself) consists of creations by players.

  • Second Life is kinda neat. (Score:3, Interesting)

    by ZorinLynx ( 31751 ) on Tuesday March 28, 2006 @07:13PM (#15014268) Homepage
    Been there a week myself. Not sure how long I'll be there before I get bored, but one of my favorite things is seeing what folks have come up with.

    Some of the neatest avatars can be found in Luskwood, for instance. I saw a very finely detailed, beautifully animated dragon there just a couple days ago. Sure, the environment has limitations, but it's pretty astounding what folks have come up with despite those limits!

    -Z (Zorin Frobozz in SL)
  • I hope this means they will get back to work on the Linux client they've been promising for the past 3 years. Well...maybe I hope it doesn't. I've got enough addictions as it is.

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