Business and Technology in Second Life

Linden Lab has just revealed a nifty feature implemented on XStreetSL, the web-based shopping site for Second Life that they acquired a year ago. Following the downtime on March 3, two things were immediately apparent: firstly, a slight tweak on the design elements allows now XStreetSL to have a “fluid” layout, getting rid of the ugly, nasty horizontal scroll bars that were a hallmark of XStreetSL from the very beginning.

The much more interesting announcement, of course, was the ability to directly use your L$ stored in your avatar’s account on XStreetSL, and vice-versa, immediately transferring L$ from XStreetSL to your avatar. It might not seem much (it had been promised since last year), but there is some dramatic magic going on beneath this apparenly simple, yet useful, feature.

Most services that have L$ transactions associated with it — and this is not just XStreetSL; think about web-based rental systems or the many audio/video streaming providers that accept payments in L$, or, of course, the alternate currency exchanges (which offer a far wider range of payment systems beyond LL’s offer of PayPal and credit cards) — have a rather difficult time in swiftly moving L$ between avatars. The main issue is that, although Second Life is by far and large the vastest digital marketplace for virtual goods in the world (yes, it beats Apple’s App Store!), it has a very primitive programming interface to deal with money transactions.

Launched at about the same time as Second Life, There.com used to be seen as “SL’s little brother”. For a long time it used to be compared with Second Life as one of the few serious competitors out there, in the sense that it was a long runner, that outlasted the period of venture capital funding. While the avatars and overall scenario was of inferior quality compared to SL — even in 2004-6 — it had at least three major advantages over SL: vehicles worked quite well; you could have a tighter control over your environment and friends (e.g. “the grieferless utopia”) which made MTV select it over SL for its Virtual Laguna Beach project, alleging that Linden Lab didn’t give MTV the kind of tools to enforce a rigid control over users and content; and it was stupidly simple to use. It also had a way for users to engage with the community and get “ratings” and “goals” to follow doing social activity (something which recently was brought up for SL as well).