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For the past three weeks, I have been reading a wonderful series of posts on Massively.com about the history of 2nd Life. This series was written by Tateru Nino and is a wonderful retrospective of the virtual world we all know and love (and love to hate…lol). Lots of good information and little known facts here. A lot of research and work went into this series and it shows. Well worth the read and highly recommended!!

The History of 2nd Life:

• Part 1: 1999-2004
• Part 2: 2005-2007
• Part 3: 2008-2010 and beyond

The day I leave for a long weekend vacation on June 24th with no laptop and access to my RSS feeds, I come home to discover the most wonderful news any patron of 2nd Life could get:

Mark Kingdon has stepped down as CEO at Linden Labs and Philip Rosedale is back at the helm.

Long live Philip!! Don’t let the door hit your ass on the way out Mark!!

Linden Labs and 2nd Life have not faired well in the two years of Mark’s tenure as CEO. Many, including myself, feel his greed and desires to move away from Philip’s original founding vision for 2nd Life have cost Linden Labs and the patrons residing and working in-world dearly. Most recently… This was seen directly in the 30% workforce reduction at Linden Labs. Hopefully, Philip’s return will restore the old vision and pull Linden Labs and 2nd Life out of the chaos created by Mark. 

To read more on Philip’s return, here are a few links:

• Another Surprise at Second Life Creator; Founder is CEO Again
• Second Life CEO Walks After Recent Layoffs
• Second Life Founder Returns to CEO Job
• Linden Lab Remove CEO: Rosedale Returns
• Founder Returns to Linden Helm

Not to be a glass is half empty type of person… This really does not seem all that surprising to me. The writing has been on the wall for well over a year. The picture Linden Labs has painted recently does not match the reality in-world or on the grid. Most people that have lived and worked in 2nd Life for any length of time, however, already knew there was trouble in paradise.

Today… Linden Labs cut 30% of their staff and began a restructure. The press release is trying to give this a positive span, but the fact of the matter is this:

1) The numbers of concurrent avatars in 2nd Life peaked two summers ago and those numbers haven’t been seen since. True… Most of those avatars were bots two years ago. Still, there are fewer patrons in-world these days and even fewer long time patrons.

2) The real estate market collapsed and stayed that way thanks to Linden Labs and the ever changing rules and high tier rates. Many full and homestead regions are gone and many private land owners have unloaded their land (yes… I am one of them). In addition, supply of land far exceeds demand. This is especially true on the mainland.

3) Designers and content developers keep leaving 2nd Life for other and better opportunities. Linden Labs forgot that small designers and developers put them on the map in 1st Life to begin with.

4) Other virtual environments have popped up. Linden Labs and 2nd Life are not the only game in town anymore. From the open source grids, to other 3D virtual worlds, to 3D social chat networks, Linden Labs and 2nd Life have real competition finally. This is more than eluded to in the press release with the stated direction Linden Labs seems to want to go… browser-based only 3D client.

5) I personally have seen no real improvement or stability added to 2nd Life in years. New features come while old bugs and limitations remain.

Yes, the writing is on the wall. This 30% staff cut reflects the reality of Linden Labs and their long term stability. If you would like to read more, follow the links below. 

• Linden Lab Restructures to Generate Efficiencies and Support Investment in New Platforms
• Heavy Layoffs Hit Second Life Parent Company
• Linden Lab Laying Off 30% of Staff, Second Life to be Browser-Based in Future
• Second Life Cuts Staff, Promises Web Viewer
• Second Life Virtual World Firm Linden Lab Cuts 30% of Staff
• Second Life Creator Linden Lab Laying Off Staff
• Second Life Owner Linden Lab to Lay Off 30% of Its Workers
• Linden Fires 30% of its Employees
• Second Life Workforce Cut by 30 Percent
• Second Life to Become Browser-Based as Linden Restructures
• Sad Day at Linden Lab
• Second Life Creator Linden Lab Cuts Staff by 30 Percent
• Tech Brief - BBC News
• Second Life Creator Linden Lab Cuts Staff By 30 Percent

Here are links to two interesting articles on virtual economies and 2nd Life specifically. They are worth a read and provide a grounded point of view for anyone wanting to do business in virtual worlds.

• Alice has a dollar. A virtual economic failure.
• The value of virtual economies.