Christian Renaud's Blog

Lively heads for the giraffe graveyard

Google announced yesterday on their blog that they are shuttering the Lively project.  This is unfortunate for multiple reasons:

1) Google was the first real major player to have a virtual world platform launch, albeit social avatar-chat centric, which in many ways validated the market space to external skeptics.  Terminating the Lively project will reinforce the views of the perpetual doubters due to the press it will receive.  Very public failure.

2) Google had a unique opportunity to tie in Lively with a number of it's other products (GTalk, Chrome, the App suite) and never did so.  This would have made a very strong market position, allowing them to exploit existing GMail/GTalk contacts (as Vivaty does in Facebook) and embed GDocs into collaborative rooms.  No other virtual world company has the horizontal footprint to carry this off, and Google had the resources, the positions staked out on the battlefield, and still miscarried. 

This reminds me of the Persian King Darius III at the battle of Issus against Alexander the Great.  Darius had the overwhelming numbers (in this case, Googles vaunted market capitalization and resources) and somehow still lost to this scrappy upstart (scrappier startups).  It's still to be determined who the Alexander will be in this analogy.

3) There were a number of secondary companies who invested in Lively as a platform for value (Rivers Run Red comes immediately to mind) who are also going to be impacted by the closure.  Startups cannot afford to partner with multiple large company platforms due to the engineering commitment involved. 

At the end of the day, this isn't something as straightforward as Google choosing to 'prioritize our resources and focus more on our core search, ads and apps business', as said in the blog.  The entire Lively team was less than a dozen people in a company with 17,000 employees. They have more than a dozen people somewhere in the depths of their finance department who do nothing but analyze the costs of Google trade show tchockies. Cough, Bullshit, Cough.

What this proves to me is that Google is just as political and functionally inert as other large companies, their propaganda aside about being a fluid startup at heart.  Vibrant large companies encourage risk taking and have longer attention spans than 6 months for new products.  It isn't a matter of Google 'not believing in the 3D Internet/Avatar Chat market', as large companies don't believe ANYTHING other than the composite opinions of a few leaders, so you can't say with certainty that there was a single corporate position on Lively.  What is certain is that the team there didn't achieve the level of support from the rest of the organization that would have insured it's success in this challenging market.  Unfortunate, and yet another reason to sell GOOG if you hold it.

Crosspost from TIG Blog- Current Economy and Virtual Worlds

Originally posted at blog.techintelgroup.com

These are indeed interesting times for businesses, most particularly startups.  I always seem to be in a virtual world presentation or at a virtual world conference as the macro-economic situation worsens and worsens.  In stepping back, this downturn should have some surprising impacts on this stage of development of the virtual worlds industry.

By way of context, in my humble opinion, the virtual world industry is still relatively nascent. There have been companies doing virtual world platforms for fun and profit for decades, however as a technology sector overall, they are just now coming into mainstream adoption numbers.  There is the standard first/second/third technology generation tensions between early entrants (many of which are making money) and new market entrants (who are not) looking to disrupt and capitalize.

The virtual world companies that are in the middle of (or about to seek) fund raising will find their valuations pushed down as a best-case-scenario, with 'no capital availability' as a worst-case scenario.  Typical sources of capital like friends/family/angel investors are all feeling the pain of watching their personal portfolios shrinking on a daily basis, and are therefore less likely to invest in a speculative venture in an increasingly-crowded sector.  The venture community is suffering from a combination of gripping fear, lack of self confidence, and overall paralysis.....but only at a certain altitude.  Large VCs are most impacted, as they have so much more capital to put in to play that they need certain (absurdly large) valuations of the startups they are injecting capital into.  Smaller funds, which invest in smaller denominations/valuations, are going to clean up during this time. 

Bad news for VW startups wanting large valuations about now, good news for smaller VCs with capital on hand and VW startups looking for early smaller rounds.

What about the impact of the economy on the broader value proposition of the industry?  Lets break it down a step at a time....

Symposium 3- Amsterdam. Be there!

On September 23rd, the Eduverse Foundation will be hosting a pre-Picnic event Symposium 3.  Looking at the intersections between Serious Gaming, Virtual Education, Web3D Technology and Social Networking, the event looks certain to be worthy successor to June's Symposium 2 event. 

For those of you who are not familiar with Eduverse, it is a non-profit organization dedicated to promoting virtual spaces for educational uses.  On their blog, they list six over-arching goals of their mission:

[Crosspost from TIG blog] Serious Virtual Worlds '08

Original post here

In beautiful Coventry, England today and tomorrow is the Serious Virtual Worlds '08 conference, as part of the Serious Games Institute of Coventry University.  Hosted by Sara de Freitas and David Wortley, the conference has been at the forefront of mixed-reality events and location-integration between the real and virtual worlds.

I had the good fortune to keynote the conference last year and again this year.  Below is a link to a swf (flash) file of my slides, which I will annotate with audio (or link to the show video recorded) when I get back to my home base next week.

Download coventry_svw08.swf

Riddle me this......

More than one vendor I spoke with at the Virtual Worlds Expo last week mentioned that they were working through 'scaling' problems with regards to their datacenters.  These were not only children or tween worlds for playing games, but also 'business virtual world' advocates.

I began to think about this a bit more on my ample airplane confinement last/this week and the thought occurred to me that this could present an Achilles heel to the growing use of virtual worlds within the enterprise.  Bear with me, I am jet lagged as all hell and 1.5 intimidating-German-machine-espressos into my morning, so feel free to point out any blatant miscalculations or misconceptions I may write forthwith.

Look at Warcraft.  They have nearly twenty datacenters worldwide.  Why?  Because they don't want people having a degraded game experience due to cross-ocean latency on the Internet, especially when that latency isn't manifested as just a dropped voice or YouTube packet or two, but the difference between a live level 70 elf and a dead one.

Now, Warcraft comes as a big-fat-DVD of pre-loaded code, little user-created-content to speak of (within a limited palette), and so they are sending coordinate data (what we used to call 'telemetry data') to players to pull down assets from their pre-loaded library.  From a traffic perspective, pretty lightweight, albeit latency sensitive.  In this regard, it is analagous to the old TN3270 Mainframe emulation code that we used to ship around indescriminately in 1992. 

Fast forward to the office of the future, the virtual office version.  You have packetized spatial audio.  You have user created content.  You have streaming video and powerpoints and presence information.  You have ever-changing mixes of synchronous and asynchronous traffic types all over walls and tables of your virtual headquarters.  This is much more bandwidth intensive than Warcraft, and if you are having a staff or funding meeting, the voice/video latency is arguably more critical than simple 'the dragon killed you before you hit it with your sword' telemetry data.  The PowerPoints can be a little delayed without anyone complaining, admittedly.

So, given that you can't 'shard off' the different offices (you are trying to facilitate the 'death of distance', right?) and  you need to have a single virtual office where people can intermingle and interact richly, how are you going to accomodate the insane bandwidth and latency requirements of a fully-annotated virtual environment?  Or, are the geographically remote participants going to have to suffer the latency inherent in such a rich environment as the cost of global collaboration?

I don't know the answer yet, just the question.  I will be doing some more thinking about this this week in Coventry England where I have the honor of being the keynote presenter for the second  year running at the Serious Virtual Worlds conference.  I will bring up this issue to the virtual world vendors and customers present and see if any of them can quickly dispell my concerns.  Else, feel free to suggest solutions or disabuse me of any misconceptions in the comments.

[Crosspost from TIG Blog] Virtual Worlds Innovation Awards- Call for Nominations

Concurrent with the Virtual Worlds Expo in Los Angeles, they will be announcing the first annual Virtual Worlds Innovation Awards.  These awards are to recognize key contributions to the development of the industry, and are broken down into the categories of:

Overall Innovator Award
Best Innovation in a Consumer Market
Best Innovation in the Enterprise Market
Best Innovation in the Youth Market

There may be multiple awards depending on the space and players, we're (thankfully) staying flexible.

Joey Seiler at Virtual Worlds News, Steve Prentice at Gartner, Nic Mitham at KZero, Erica Driver at ThinkBalm, Robert Bloomfield at Cornell, and I are the judges for this year's awards.  I have already received a number of suggestions from the community, and now it's time to open up the nominations.  Who would you like to see get an award?  Speak up now as we are nearing the decision point. Rationales and reasons welcome. 

Dusting off the Crystal Ball

A little over a year ago, I wrote a number of industry and technology forecasts within a blog post entitled Look into the ball and tell me what you see.  In the post, I predicted changes and announcements in the Virtual Worlds industry, and I'd be a poor futurist and technologist if I didn't revisit that blogpost and see how my predictions fared.  Most futurists are loathe to do this sort of thing, as rear-view mirrors are usually not very flattering. There was a humorous anecdote I once read in one futurist tome about a professional forecasting study done in England where the most accurate forecasters of future events were actually plumbers.

So, with the prescient-plumbers in mind, lets revisit my prediction of June of 2007 for June of 2008 and see how I fared:

Prediction: "T= This time next year.  Three or Four major 'verses competing for customers with status/infrastructure innovation ("Transfer your avatar and property to our world for free from Second Life when you join, no charge!" (American and United regularly do this with frequent travelers)).  Voice is common, and the 'verse developers have finally figured out that the utility of their 'verse is directly effected by the amount of other data sources they can integrate into their environment (Note: RSS is a fine start, but it's a .0001 on a 10 scale).  Worldwide adoption of virtual environments as a dominant Internet tool is still <1%."

Verdict: Fast forward to June 2008.  Google Lively launched in July, IBM was demo-ing multiple internal virtual world efforts and announcing interoperability but did not officially ship any product as part of their collaboration suites, Microsoft was mum, and Sony Home slipped not once but twice from their Beta in 2007.  So, from the enumerated vendors in the blogpost, I missed launch by a few months, batting a big zero for timing. On the other hand, each platform prides itself on data integration, specifically video or slides, from the outside world.  No one is really interested in 'transfer your property' yet.

Revisionist history verdict:  Sun (a major player) shipped Wonderland code for public download.  Lively shipped one month later than I predicted.  IBM is working on private label products using multiple virtual worlds for hand-picked customers.  A slew of startups have shipped,  like Rivers Run Red and Electric Sheep, in addition to the major technology players.

Final verdict:  I under-estimated the timing of the launches. They are all walled gardens as predicted (no interoperability other than the proof-of-concept demonstration by IBM with SecondLife and OpenSim).  Feature functionality for the most part is better than SL (or is SL++ like RRR's offerings) with the notable exception of Lively.

The predictions and prognostications regarding virtual world interoperability are proving less and less relevant as we see disruptive players enter the market with web-based solutions (Electric Sheep, 3DExplorer, etc.) that do not require a fat download or special browser software.  As these environments begin to leverage the vast array of social networking APIs,  other micro-blogging technologies such as Twitter and Pownce, and communications technologies such as AIM or Skype for VoIP, the relevance of walled-garden-interoperability seems rather outdated.  It never has made sense to walk your avatar between World of Warcraft and Second Life, and it seems even less relevant to do so now between Lively and Second Life other than to make it simpler to have your avatar look consistent between tools.  However, this is putting lipstick on the pig if we don't address the broader concern of compartmentalization of these environments, essentially replicating the Instant Messaging market instead of the Email market, where we can use interoperable systems and different clients for the same end result.

There have also been a number of platforms launched in the intervening year for virtual environments  (Electric Sheep, Multiverse retreaded, VastPark, others) that will be interesting experiments in toolkit vs. finished product.

A sad casualty of the last year was Transmutable/Ogoglio, Trevor Smith's efforts towards building 3D spaces as a web service that could be leveraged.  I hope someone is able to take the gauntlet from Trevor's efforts and carry them forward, because I predict that this approach has the most promise of any of the models currently deployed.  Make it a feature, not a product, or (heaven forbid) industry.  That's when you'll see real market penetration numbers and ROI.

In my (new) formal day job, I'm putting the finishing touches on the Technology Intelligence Group's Virtual World Industry Outlook for 2008-2009, with some specific focus on not only activity in the last year but also leading indicators like VC money-flow, new major market entrants and potential standards emerging from surprising places.  This will dive into much greater detail about predictions for the coming year beyond this post or last year's crystal ball.  Stay tuned, it'll be one of our first publications as soon as the main site goes live.

Catch me if you can- August and September edition [Crosspost from TIG blog]

Over the next two months, I will be doing a fair bit of  speaking regarding the future of the virtual workforce and workspaces, which will coincide with the release of Technology Intelligence Group's Industry Outlook 2008-2009.

Tomorrow, I am virtually participating on the "Future of Virtual Worlds" panel as part of the vBusinessExpo in Forterra OLIVE, organized by Clever Zebra.  I will be joining Bruce Joy of VastPark, Nicole Yankelovich of Sun's Project Wonderland, Darius Lahoutifard of 3DXplorer, Corey Bridges of Multiverse, and John Swords of the Electric Sheep Company.  I guess I am the only non-platform person there.  :-)

Next week, I am traveling to Los Angeles (and bringing my children to the House of Mouse) to speak on Rita Turkowski's panel at the Web3D conference attached to SIGGRAPH.  The panel, on Sunday August 10th, is entitled "I see Web3D's Future in..." and will have panelists from diverse parts of industry so it should be an interesting cocktail.

Shortly thereafter, I return to the City of Angels (fulfilling the curse laid upon me when I moved from there in 1996 warning that people can never actually escape) to speak at the Virtual Worlds Expo 2008, where I will be participating on the September 3rd "Technical Visionaries Discuss and Debate The Future of Virtual World Technologies" panel with an august group of visionaries including John Swords, Ian Hughes (epredator), and Mark Wallace.  This one should be fun to watch, and if it wasn't so early in the morning, I'd bring a bottle of Tequila to get things rolling properly.

To round out September, I will be returning to beautiful Coventry England to keynote the Serious Virtual Worlds conference held by David Wortley of the Coventry University Serious Games Institute.  If  you haven't followed the work they are doing there, and those that are working closely with SGI, you should take the time to do so.

The good news is that all of my other engagements during August and September are virtual in nature and will not be emitting the carbon of actual air travel.  Now, I'm off to go plant a forest in my backyard to offset these trips.