Second Life has gotten alot of press for its ground-breaking virtual world which has been touted as a everything from an online sex purveyor, to a merchants dream. While some of it is true, as usual, the truth lies somewhere in-between. Whatever the spin favorable or not, we have to admit Linden Labs has done something very right. If nothing else they have captured the imaginations of thousands of users. Considering the growth rate, there is something compelling in that virtual world.

While there are definitely passive users, people who just visit to play and recreate, there are large numbers of people who are creating items in-world and are trying to sell them. Some have been amazingly successful and have replaced their real world income with the proceeds from the virtual world. Why is this so powerful a draw? Well, to be able to create something for free, then own it is pretty great in itself, but then you can turn around and sell unlimited copies of your creation with no cost to yourself for it’s production.

While I am not an experienced gamer, or resident of other virtual worlds, my understanding is that the other places retain ownership of anything created in their world. Now my first thought about this is that I wouldn’t want to create something that I then had to give away. But in the end I probably would, just because if I could sell the item, I could use the in-world cash to buy things myself and enhance my experience in their world. But what is wrong with that picture is that there would be no incentive for cross-world production. If I create a successful T-Shirt business in SL, I can then turn around and produce them in the real world, or vice-versa. My content has value now. If I gave up ownership of the creations, it only has in-world value in that I could use or sell the item there.  Given a choice, which I have, I will produce somewhere that I can retain the ownership of what I produce.

A recent move by Linden Labs to provide their code as open source has produced quite a bit of controversy and speculation. Why give it away?  We will only know over time of course, but we can guess there was some wisdom to it. They have done too well and put too much into the development to just make a dumb move and give it all away. One utility of this that I can see is that with outside developers, the world will become alot more diverse than LL would have made it, and it can be readily customized to be useful to private enterprise. One recent competitor, VastPark, is working on the concept of people producing their own worlds, which will then interact with other worlds to form basically a world of worlds. LL may have a similar concept in mind. If enough companies adopt the code to their own uses they can then connect up with the main Grid as they wish, and can even sell or license use of their entryway into the SL Grid. Of course LL will maintain the main Grid that these companies will connect up to, and will find a way to profit from it, by charging somehow for connectivity to the main Grid.

LL may also be trying to become the new “language” of web 3.0 and everyone will somehow use or “pass through” SL do go about their daily business and pleasure. Just keeping small percentages of the profit at that stage would still probably be lucrative.

The other possibility is that they are just poising to sell. They want to create bells and whistles, and create a buzz just to attract a buyer. Perhaps a company like Google would buy them up and connect it to Google Earth. Either way, I think LL has alot to gain from allowing the open source availablity.