The Megabucks of Metaversal Minions
by prokofy on 31/10/06 at 4:31 am
By Prokofy Neva, Desk of Outrageous Excess
If you were pinching your pennies and slaving all night over a hot PSP in Second Life trying to generate enough cash to buy an island under the old tier scheme, and your hopes have been sadly dashed by the new prices, maybe you’re in the wrong line of work.
Take a look-see at the cash the newly-minted metaversal consulting companies like Electric Sheep, Millions of Us, and Aimee Weber Studios are pulling down in the latest article in Business Week — $10,000 to $1,000,000 just by wrangling islands that might cost $200,000 Linden inworld to terraform and build — and then launching media campaigns.
What a faint, distant memory that cover on BW in April featuring Anshe and her paltry $250,000 in Second Life, eh?
To be sure, making these kinds of millions might involve donning identical company overalls or t-shirts or having to change your last name, and the work may not remain steady. You may have to accept the canons of the Soviet Union of Concrete Workers’ School of Auditorium Seating. But it’s sure to buy your employers and you many islands in the synthetic sun.
It would be great if companies would turn to the Developers’ Directory and spread the wealth around.
Moopf Murray
Oct 31st, 2006
Companies are using the developer directory to a certain extent – mass mailing many of the developers, generally looking to farm ideas for their projects. I’ve blogged about it and it’s become such a problem for some of us, that we’re not engaging with such companies as the ideas are being boiled down and taken elsewhere. You can pretty much see them coming now
Fortuantely the odd one or two are approaching through the directory that are worthwhile in engaging with but it is slightly disheartening when you see some of what’s being produced by the larger developers, especially at the prices these companies appear to be charging. But then, it’s all about capitalising on the blossoming interest, and the relatively few companies able to offer such opportunities in a “new” market almost have a captive audience that they can charge whatever they wish to, and take advantage of a position where competition is very light. Their time is ripe for squeezing as much as they can before this situation changes.
That doesn’t mean to say that what they’re producing is any good though and much of what I’ve seen has been pretty dissapointing.
It would be good to see more of the larger companies looking to get into Second Life come through the developer directory but those that haven’t contacted one of these agencies directly are coming through Linden Lab who are then putting them in touch directly. Such companies never actually seem to be pushed towards the developer directory at all.
Urizenus
Oct 31st, 2006
“Soviet Union of Concrete Workers School of Auditorium Seating”. ROTFLMAO Prok, you know I couldn’t help thinking of that too. The space used at the crayon launch reminded me of the auditorium where I spoke at Novosibirsk State University, in Siberia: http://www.nsu.ru/english/
Orlie Omegamu
Oct 31st, 2006
The article says they charge their customers between $10,000 and $1,000,000. That says nothing about any potential profit. I would guess the more costly projects have a significant marketing budget. Any discussion of profit should take into account opportunity cost. If someone who is “making money in SL” could be making more money by spending the same time on a real-world endeavor, then the SL project isn’t really a gain, except to the extent that it is an investment for the future and possibly more fun than RL work.
Prokofy Neva
Oct 31st, 2006
Orlie, as a consultant myself in RL, I surely know that when you bill for a job, even a figure that seems like some huge amount to those just tuning in, of course you’re going to have all kinds of costs. There’s your regular office costs, or perhaps meeting space/communication costs, or hiring sub-contractors. And of course the figure doesn’t reflect the fact that you make yourself available 24/7 to that client, but then the next month, you may have no work.
That’s not the point, however. It’s about the disparity of two different economies where the gulf is widening between those working inworld for Lindens and those working outworld for dollars. The figure of $10,000 or even a million means the pricing of work to outworlders that is often done inworld by those at the next tier at a fraction of the price. For example, an indigenous builder doing a routine job of terraforming and building out an island might charge $500 or $1000 US in Lindens; but these companies charge and get many times that amount, in part because outworld companies haven’t figured out the differential yet.
Perhaps metaversal consultants could be charging the same on a RL marketing project, but RL costs aren’t involved in SL — that’s the whole point. There’s nothing like the comparable cost of office rent or printing. Buying ad space? But these marketers *aren’t* buying ad space, mainstream media is covering them for free.
What is the marketing budget of SL? It’s primarily labour. And I suspect if we peered at a lot of these budgets we’d find some pretty low wages for some of the lesser-known slave builders on the projects.
Let anyone make as much as they can get away with from this “business platform” — this story merely illustrates why the Lindens can suddenly charge as much as they do for private islands now — because of the vast sums changing hands.
urizenus
Oct 31st, 2006
Yeah, I don’t see why these development companies would have significant overhead costs. They don’t need an office (they presumably meet in in SL), and all the employees need is a laptop with a good graphics card, which, one supposes, they already have.
The companies are paying way too much at the moment because they made the idiotic move of going to the Lindens first to get help, and the Linden’s steared them into an artificially small pool of vetted developers. On the one hand that makes sense, because it avoids disasters and crappy builds, but on the other hand, it relies on the absolutely false assumption that Linden Lab knows what is going on inside their game.
Outside investors need to understand that Linden Lab has only the faintest sense of what is happening inside their world, and that was true back when there were only 100K subscribers. It has also been true for every MMORPG that has ever existed. These places are different. The social aspects aren’t controlled or understood by the platform owners. Going to them first is not the way into this wild and crazy new world.
Orlie Omegamu
Oct 31st, 2006
I read the article differently. I see people fudging the numbers to try to justify their investment and lost opportunity costs.
Prokofy Neva
Oct 31st, 2006
We can’t be sure they are reporting their numbers accurately to Business Week, either; they may be deliberately over-reporting or inflating in order to position themselves as hot marketing agencies playing with the big boys who spend this on RL mainstream media campaigns.
I found it interesting that these same people who wouldn’t give you their gross annual income in Second Life as miniature content providers getting micropayments were so open with Business Week about their RL money from outworld contracts.
Only the Lindens know the truth about inworld revenues given their voluminous server statistics, and they aren’t talking.
Prokofy Neva
Oct 31st, 2006
Moopf, you’ve written on your own blog very interestingly about how some of these companies are coming to you now asking you to clean up other hasty jobs that essentially half-assed or not thought through. And that’s a natural — and interesting — development.
And yes, sure, LL steers to those they like best and are comfortable with like ESC, Aimee Weber, and MOU, there’s clear evidence of that. They blatantly mention only these few each time there is media coverage and they steer every chance they get in a media inquiry. And they and those who benefit from this steerage are beligerently defensive of this practice because they believe their work and their performance demonstrably outshines others.
But it doesn’t, always, and there is no reason why a tiny cadre of studios should grab the lion’s share of contracts, do them badly, and sour big companies and the media in general on the metaverse just because they were greedy for quick hits.
The Developers’ Directory is somewhat of a fiction, put out there under pressure of people like Cocoanut Koala who urged the Lindens to create a more transparent system for bidding. In theory, anyone with the chops can register and get on this directory here:
http://secondlife.com/developers/registration.php
Many more should. I know some very good people nervously waited way to long to get included in this directory after applying, and didn’t dare publicize the fact of their long and nervous wait for fear of alienating either the Lindens or the big guns on the list or for fearing to be sour grapes.
The process should be way more registrational and far less discretionary than it is. People should even be able to simply have a template and *buy* the space for an ad in a yellow pages sort of directory if they wish without having to be vetted and filtered by Lindens. This is how an open market and open society works — which they keep resisting. So don’t depend on them to provide it — like any unaccountable government in power without elections or a free media, they do what they want and help their friends, not you.
Our expectations for them to be open and transparent and accountable come from a set of expectations appropriate to governments or entities like RL businesses or non-profits or universities. Yet there’s always a hardcore vocal cadre of both Linden lifers and beta-tester fanboyz to tell us that these expectations are all wet; that it’s just a very special and precocious software company with its uber-talented and kewl designers’ studios and we should shut up, because we have no lives and are just jealous gits.
I obviously reject that characterization of the process, because I don’t think RL works this way even with very specialized high-end design studios that still advertise openly. And I think if they are still touting a “world” product as a distinct from a “business platform” product they need to do the minimum to make it a world, which means being just and accountable.
Still, there has to be made a kind of freelancers.org or Craig’s list of SL that does an end-run around Linden and FIC filtering, and that awaits the entrepreneur who understands both the public interest value and the profit-making potential for such a gigs type of site.
And people who want to reach companies with the news of their experience and skills have to paper them with resumes in the old-fashioned way, I suppose and try to show up and get noticed as they would in RL.
We’ll probably be waiting in vain for the Lindens ever to get off their well-worn rolladex cards.
Cocoanut Koala
Oct 31st, 2006
That’s a good idea, to make individual end-runs around the Developer’s Directory, if people haven’t already been doing so.
And one thing you have to bear in mind: For all we know, half the people IN Millions of Us, Electric Sheep, and others of the developer companies, are actually Lindens in disguise.
As we know, LL now allows their employees to also run profitable personal businesses on the side, on secret alts, in the very world they also rule.
coco
Prokofy Neva
Nov 1st, 2006
Coco, that could well be, yes. We only know of one former Linden, Reuben Linden who is Reuben Steiger in Millions of Us.
I don’t really see any Lindens or former Lindens or Lindesidents in ESC, MOU, RRR, or AW. But, would I be told? No lol.
Marketing & Strategy Innovation Blog
Nov 4th, 2006
How to Advertise in Second Life, Part 2
By: Ilya Vedrashko It looks like a fairly heated and a long overdue discussion on virtual world marketing is unfolding across SL-related blogs, so here’s a a quick follow-up to yesterday’s post with more links. (Brace for more SL news…