Second Life’s position w.r.t. its industry. Its ecosystem.
Second Life was an online 3D virtual world created by
Linden Labs. It was different from the traditional game and was a user
generated virtual world which involved the players to complete the mission of
connecting everyone to an online world that advances the human condition. It
was launched in 2003 and by 2008 it had earned revenues worth $77 million and had
16.8 million residents. The game had some features that made it stand out like Linden
dollars, intellectual property rights, avatars, built structures and experiences
etc. The sources of revenue were land sales, Land-use fees, Premium memberships
& Linden dollar conversion fees etc. When Second life was launched in 2003,
there was scepticism about demand for a user-generated virtual world as it was
not a traditional game. Growth had strained Linden Lab’s technical
infrastructure. New users found it difficult to master tools that controlled
avatar movement, communication and content creation. Second life has trouble
with antisocial behaviour and fraud. It had problems with disruptive and
illicit activity by residents. Fraud was a natural consequence of the Linden
dollar’s convertibility. It also occurred when vendor sold objects that failed
to work as promised. It was unclear if Second life preferred targeting
mass-market consumers although they attracted a large, loyal base of early
adopters. A more fundamental challenge in accelerating Second Life’s growth was
increasing its appeal for mainstream users.
At the time
of the case, what strategic options are available to Linden Labs?
The strategic options available to Linden Labs, at the
time of the case are:
The first option was to follow a laissez faire path by
providing generic tools for anyone so that anyone wanting to build to build
experiences in Second Life can do so
The second strategy available was more of an activist
approach which would include selectively supporting ecosystem partners who
would develop superior/potent solutions according to user’s needs
The third option was to build up the required
Second Life Cross the Chasm into the mainstream? What could be a likely beachhead
segment? Explain your choice and way forward.
The Chasm is defined as the gap between Early adopters
and Early majority, where the company is not able to convert the initial users
into regular users. For most of the companies, crossing this chasm is the most
important or rather most difficult task. There are a number of example where a
product was well received in its early stages of launch but could not generate
the momentum and thus died and early death. For Second Life to not have a
similar fate, it must do the following:
Targeting a niche segment
Instead of targeting numerous customers, the company
must target a particular niche segment that in turn will play a major
influencing role within their interest group, thus diversifying the use of the
application to newer segments. This particular beachhead segment must be:-
Good networking (like bloggers, content writers etc.)
Must be regular users of the application
Can be content generators who become familiar with the
Develop a whole-product solution
Move from a product to a platform – Currently, users
have to download and install software to use Second Life. Their mission aims at
connecting everyone in the world and to achieve that, Linden Labs should
minimize the entry barriers for a new user. A lighter version of this virtual
world could be released for mobiles and tablets.
Improved UI – What stops new users from making a
repeat visit to the Second Life world is the complexity of the virtual world.
Make it easy enough for users to understand the navigation through the virtual
world very easily.
Intensive Marketing Campaign
Co-marketing virtual world second life with other
Market Second Life as an aspirational game where users
get a sense of achievement by accomplishing tasks through avatars
Advertise in events like Superbowl, Hackathons etc.
targeting our niche segment
Product placement showing the virtual interface to our
Interface demo to the target niche market customers
who are influencers in their segment.
platformization a viable option for Linden Labs?
In our opinion, implementation of a platform strategy
would be a viable option for Linden Lab.
strategy would help the game to evolve and be adaptive to the preferences of
the users. This will help the company in identifying the areas of importance to
its customer base and thus focus on these areas and better the game by takin
It would also
help in rapid and continuous product development, since the platform would have
ecosystem partners that would adapt the game as per consumer insights.
The company in order to achieve the target of 8 million
must be open to new firms coming in and making customized add-ons for the game
thereby increasing the usability of the game. It would also captivate the users
and makes it more interesting for the user.
Since Second Life enjoys a dominant position in the
market place as of now, they have the capability to tie up with well-established
partners to provide the best possible user experience and hence have a dominant
position in the industry.
Bringing in domain expertise from different
selectively supporting firms who are well positioned to develop potent
solutions for users need would enhance the quality of the user application.