(disclaimer at bottom)
I just received notice today that Linden Lab, makers of Second Life, have acquired two competing third-party virtual goods sales websites. The sites, X-Street (formerly SLExchange until Linden Lab changed their trademark policy) and OnRez (formerly SLBoutique until Electric Sheep Company purchased it and rebranded it.)
Here's the link to the press release.
So what does this mean for the various parties involved? Here's my run-down.
X-Street and OnRez:
Will obviously be merged together at some point.
Linden Lab and Second Life:
1. Linden Lab intends to improve product search, and integrate sales on the merge site into their internal browser.
2. They will likely add features to objects themselves that will allow users to click a checkbox and automatically list them on the merged site.
3. Linden Lab gets another revenue stream in taking a small cut of sales.
4. Linden Lab will exert control of what's being listed, and prevent banned items - griefer tools, gambling games, and, more importantly, copyrighted and trademarked items.
5. Linden Lab will likely integrate their L$ purchasing system into the site so that you can buy items more quickly.
Consumers:
1. You should be able to find stuff to buy easier - and potentially, a lot easier, if Linden Lab makes it as easy to list as clicking a checkbox.
2. Don't expect to find any banned items on the site anymore. Get your griefer bombs elsewhere, find your trademark-violating items somewhere else.
3. Does this mean that Linden Lab may finally get to implement try-before-buy permissions? It could be, and certainly would be wise for selling detailed 3-D items, which pictures do not do justice.
Sellers of virtual goods in Second Life:
1. If you're playing by Linden Lab's rules, expect higher visibility of products.
2. If you're not playing by Linden Lab's rules, expect to have your trademark-violating items banned.
3. Expect that Linden Lab will probably maintain a similar cut of sales as they do for L$ exchange.
4. Now that the marketplace is centralized, it's reasonable to assume that the tax-man may come knocking on Linden Lab's door and expect Linden Lab to force people to charge sales tax.
3rd Party Brands:
1. Linden Lab will probably bend over and kowtow to any of your DMCA / takedown notices on copyrighted and/or trademarked information.
2. Linden Lab will probably negotiate some licensing deal with third parties and then find a third party developer to fill orders.
3. Existing SL-grown brands will have greater control over preventing knock-offs.
Mall Owners in SL:
Say bye-bye to your biz unless you innovate. I believe shops will maintain their headquarter shops in world, but malls that offer little more than collecting different vendors together will get far less traffic. Your best bet is to become a themed attraction, and sell items appropriate to the theme.
Agree? Disagree? I want to hear your thoughts!
Gwneth LLewelyn's take.
Disclaimer: In the interests of 100% transparency, I should mention that I won 10,000 "Linden $" last fall from X-Street in a raffle at SLCC 4, and that I have friends who founded / developed software that went into OnRez. I don't think it's a big deal, but you know how people get. ;)
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I can't hardly disagree, this pretty much summarises what will happen :)
by the time SL lets anyone play by "honest rules" itll be sold off to an educational foundation.
too late. time for flash.
I agree with much of this, but I do not think that this will affect inworld sales hugely - it will a _bit_, because it will increase awareness of web-based remote shopping, particularly if it ever gets into the client, but at the moment people treat SLXstreet/OnRez as "the places you go to find things and then visit their shops inworld" and "the places you go to deliver gifts of no-trans items" and "the places you go when you're really bored at work". Inworld shopping is an activity in itself. (I shall be writing on this at more length.)
As I have said, the DMCA will bite a lot harder now that the advertiser/linker to content is also the host of that content. The "piratebay defence" does not apply any more.
I agree with most of this. I believe that once Linden Lab started to keep stats on what scripts were running on different sims, OnRez and SLX were probably seen as having a large share of scripts taking up resources. (Have you ever counted how many scripts are in each one?) I expect to see a decrease in the number of scripts and resources needed to host a box of items for sale.
Linden Lab doesn't currently take a cut of sales when you sell something inworld (at the point of sale). Maybe they'll take the same stance on web store sales? If I'm not mistaken, OnRez didn't take a cut of sales either - they charged for premium services, or something.
I think it's very much an open question whether it will impact inworld shops, malls, etc, very much (your last item). Sure, non-store shopping will be just a click away, but really it always was (how hard was it to go to OnRez or XS?), and still most buying (I believe?) happened in inworld stores instead. It's just so much more fun!
Dale, note I make a distinction between in-world stores (like a content creator's headquarters location) and an in-world mall, which is almost always an arbitrary collection of satellite stores. I think the prior is very important, the latter ... will fade.
The mall issue does somewhat concern me, that's a land tier issue, the backbone of the Linden Lab business model and to say that's not important, or to suggest it's tough luck is a very dangerous road to go down.
The same of course is happening RL, malls are closing down and the people who own land where malls are located are scratching their heads trying to find ways to make their investment viable. The people in that position in Second Life are ultimately Linden Lab.
Then there's the tax issue. When I was having discussions with the government and the UK tax office over VAT in Second Life they repeatedly told me that transactions that take place entirely within a virtual world are not considered as services for the purposes of VAT.
However, will they take the same view on SLX sales? Especially as you've always been able to sell there for real money, as that grows, yes the tax man is likely to come knocking.
People need to be careful what they wish for.
Regarding the "end of malls" in game, I have to somewhat disagree. When searching for a mall with at least decent traffic to sell my items in all I could find were empty malls and camping bot malls. This was about a year ago. I finally gave up on in game malls because people just don't seem to use them. The only exception to this seems to be, as you mentioned, themed malls where shoppers can browse stores which sell items catered to a specific need (fantasy , rp, furry, etc)
I agree that sellers will be more likely to keep a central store in game and less likely to rent branch stores. HOWEVER I think that renting booths and such will always be a means to catch the eye of someone who otherwise may not have found the seller's items on their own. Not only that, but most shoppers would prefer to go to the main store anyway, because they want to see the seller's full offering. Branch shops and rental booths are really just a way to catch a shopper's eye and hopefully develop a fan base and feed traffic to the main store.
What this really boils down to is that content from SL can not be sold in other virtual worlds as easy. Lindens has just slowed the migration of content.
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