Mo Money, Mo Problems?

Prokofy Neva asks

You said LL is a company that is "not yet profitable." Oh? Are you saying you burned through the ebay guy's money on a lot of new servers and it isn't paying off yet...and that explains why all these sudden shocks and changes...1.7 with its wierd forced-45 FPS...this sudden shocking move to p2p and getting rid of telehubs? Is that really what explains it all?

Fast answer:

No, I’m not saying that, and no, that doesn’t explain it. 

Slow answer: 

We are still spending more money than we are making, but we are not in any kind of trouble. We still have a comfortable amount of money in the bank, and we are making enough money that we are not spending it too fast.

Buying a lot of servers is actually pretty low risk. If you check out hardware prices, you can see that we essentially pay the cost of the sim hardware as soon as we auction them off, and we have no problem auctioning them off. Some servers, like the asset server, cost more and do not bring in revenue directly – but they are costs we can eat.

The primary reason we are not profitable is because we keep hiring, but we keep hiring because we are making enough money that we are not increasing our burn rate. We need to scale our manpower along with Second Life – there is a lot of stuff that needs doing, and the userbase is not all early adopters who are as forgiving with bugs and incomplete implementations.

Since we are not hurting for money, what explains the “sudden shocks and changes?”

The forced-45 FPS is a sim performance fix. In 1.6, we realized that we had no limit on how many sim resources scripts could take up. When the script engine was designed, we did put limits on individual script performance so that it would be difficult to crush a sim with a single script, but we didn’t know that people would be using a thousand scripts on a single sim.  Many “laggy” sims were a result of to many scripts running, and taking resources that could have been allocated to Avatars, Physics, etc.

In order to increase overall sim performance, we implemented what we call a script scheduler. When the sim’s resources become scarce – say a big party with lots of avatars, instead of letting all those scripts taking too many resources, we slow them all down. I don’t know the details of the implementation, but the 45 FPS clamp is to facilitate that. In 1.6 (before the limit) 10 percent of the time, sims were at less than 35 FPS – about where performance starts to degrade noticeably. Since the change, they are under 35 FPS about 3% of the time. We still need to make that better – but it is in the right direction.

The move to p2p (was it really that shocking?) happened because of a concentration of attention to the new user experience (which happened mostly because of the new people we hired, thus not becoming profitable). Second Life (as an application) isn’t very friendly to a new user – we’ve known this for a long time – and we have been making incremental progress on it, but mostly we had been concentrating on the Orientation Island and the Welcome area – the places where we have full control. User tests (where we sit behind some poor sap as they use SL for the first time) showed that these worked ok, but when we extended the test a bit – we realized how hard it is for a new user to take the next step and go somewhere.

A typical scenario: I want to go play a game. I open up find and type “games.” I see a lot of casinos – that’s cool though, I like playing gambling games, and they all say free money, and I don’t have much. So I click the teleport button. My expected behavior is that I will go straight there, but I don’t – I’m standing in somewhere completely different than where I thought I was going. I notice an arrow on my screen, and the red beacon. I’m smart enough to realize that I can go that way, so I hit fly and head in that direction. In the meantime, everything is loading around me. Suddenly I stop! What’s going on? Lag? Did I hit the wrong button? I try to fly forward again – this time I notice the collision particles, I must be hitting something! Suddenly a room loads around me – how did I get in here? I can’t see the beacon anymore. How did I get in here?

“At this point I would stop playing.” 

Ouch. How do we fix this? Well, the easiest, cheapest way is to turn on p2p – after all, it is already in the system for gods, with a few changes, we can do it really soon.

To tell the truth, I think there is a bigger problem earlier in the process – “How do I find something that interests me.”  I don’t think p2p should be all that high priority – but all of my objections are that of a game designer – “It will make the world feel smaller.” That is a whole other post though.

So, in conclusion, we have the monies, and while the changes relate to improving user experience, which means more paying users, they are not directly made to save us from some financial bugaboo.

The really slow answer:

... just kidding...

Comments

[Oz Spade]

Nice response. :)

I think it's neat that LL is taking into consideration the new user experience. I had a friend, who had EXACTLY the same problem you describe, she wanted to go shopping, so she would try and teleport, but for some reason she either didn't see the red beacon, or didn't understand to follow it, so she would teleport me, and make me find it for her.

So yes I believe this will solve a great deal of problems.

I think somewhat the greater problem is travel in SL itself sucks total ass. Crossing sim lines in vehicles sucks, lag sucks with buildings around you, theres alot of issues with traveling. The only really safe way to travel in SL, is to walk, and believe me... it's a very slow way to get somewhere (but can be nice when you have the time).

So while P2PT is a great fix in the short-term for travel, in the long run improvements to the overal travel experience will be needed. Even if those changes are made, I'd still like P2PT, so I can have a choice how to get somewhere.

[Ice Brodie]

This sounds very true, my first experience in SL was... well, rather green, I walked, or was directly teleported to a few places my first day (yes spoiled) and did not have the misfortune of ending up in a room for a good week... it did happen... more after the week, but ehe.

I do want to hear the really long answer though.
-Ice

[Kazuma]

I think my first experience in SL went pretty well, though it was over 1 1/2 years ago. Then, the telehubs were great because SL was much smaller and much MUCH less laggy. So I enjoyed not arriving at my "final destination" because it meant I could explore a bit on the way...see the scenery, interesting places, etc. However, now...if I want to get somewhere I have to use a flight assist, fly up high to reduce the very painful lag just about everywhere, and jet across a few sims, missing all that I used to enjoy simply because with all the many builds and thousands of scripts, slow rezzing of objects and textures...its impossible to move or even type sometimes.

I know its a bit off subject, but I feel that v1.7 has brought more pain then user friendly experience to SL. I can't even goto some of the places I once loved simply because I'm so laggy things won't rez, can't move, or even type...with framerates as low as 0.4 that becomes impossible.

Now don't get me wrong...I do love change, but not when it comes at the expense of my SL experience. I'm only on SL maybe 10 percent of the time I used to be because of that reason...its not fun to be there if its soooo laggy you can't really do much of anything.

There's my 2 cents =~.^=

[Prokofy Neva]

Very interesting response, but guess what, you're in deep delusion about this "we have no problem auctioning them off". You are facing a land glut and heading toward a huge land crash, bro'. You're mistakenly thinking that because you auction them off like hot-cakes *now*, and all kinds of baby barons buy them, and oldbie baron junkies keep hitting the lever, it will stay like that. It won't. The story of the rich girl who clicked around the auctions and whoops won 5 sims and didn't even know what to do with them and then whoops sold them off at a profit is not the typical story.

What I'm seeing are a lot of parceled sims sitting out there baking in the sun...they are not selling...30 days...tier hits...60 days...some of the baby barons bail and the oldbie barons mark down or chop up...there is a LOT of unsold stock out there. There's this silly idea that there is "market demand" driving the auctions. Not so. What's driving is psy-wars of chicken where Lindens dump out 20 sims and old barons like Anshe, fearing to lose market share, bid just in case (even to return later) and newbies get into a frenzy. This has no relationship whatsoever to the pool of people (a fairly small one in game population terms) willing to be endusers of land and buy it to keep even 90 days. When they see $10 or $12 a meter on waterfront they are going to let it bake some more. I don't mind, because then they rent. But it's not good for the world, trust me. I think this is going to bottom out big-time by February.

I don't know why you Lindens never notice when people like me tier down 2 sims or 10 sims or just pull out of the game, something that is happening quite a bit in the last six months

I realize you are tremendously cocky about your ability to get by without us and our "investments" because you have all kinds of giddy newbies buying on the auctions and even some successful baby barons already. Great! Except that traditionally, the old barons are the ones who are available to liquidate out failed baby baron experiments and you've expected them to do this service for you for way, way too long with insufficient gratitude. Like borking events, GOM, telehubs would be an example of "insufficient gratitude".

Like Jim said to me, "Geez, Prokofy, you're no game dev." But I have run organizations and budgets and boy, do I know what cash burn and burn rate mean and how things like 9/11 can happen and you have to bail water really fast. I can only say that you have a hidden burn rate that you are not willing to acknowledge. That burn rate is absorbed by people like Anshe, to a huge extent, or people like me, to a smaller extent, in the land business who absorb all your shocks, land gluts (by keeping an active baron-to-baron liquidation market going), technical problems, newbie retention problems, and keep on logging on.

How long, Oh, Lord?

How long do you think you can go on expecting that from us?

Look, dude, I know all about what the forced-45-FPS thingie is all about, it's been explained. Now let me explain to you the short end of this stick -- which is the end that I get poked in my face. I'll be the first to say that you need a way to guard sims from script-kiddies who lag sims down all to hell like 37 FPS by scripting nuclear submarines and exploding them all over their neighbours' waterfronts on lovely residential sims. Those script kiddies should have their toys in a sandbox, or be forced to have their toy simply work less well on their dinky 1024 m2 plot so that I, on my 16k plot next door, can enjoy some of the FPS fresh oxygen to breathe.

Except...life isn't like that. What your forced-FPS thingie actually does is force all scripts, even those you need to live, to inexplicably slow down and become useless. Example. I have an apartment building with teleporter scripts. Some newbies coming in, without good settings or less than optimal computers, cannot even get the script to teleport them because it seems it is lagged down to hell in order to ensure all of us our forced-45 viewing pleasure. Yes, you take it out of one end, it's going to come back and bite you on the other.

What you should have done was a) charged for those who use the most scripts and most CPU resources on sims -- tier for scripts just like tier for square meters of land or 2) do a little more lite zoning to get script-eaters sorted away from more quiet activites.

I'm astounded at how short-sighted people are. They blame telehubs for buildings rezzing up in their face. Now they'll see that they rez up in their face and lag them out in the boonies they just instantly p2p'd to as well. Duh.

You will never, ever get me to believe your user test data because it was for a short period, with a pre-cooked outcome (you all wanted to switch to p2p), with no OTHER user feedback, midbie or oldbie, and with no real social survey weighting technique evidently to remove bias. You've got a big factor of "steerage" with that phalanx of greeters and meeters and mentors and instructors that filter and massage newbie impressions and help them to loathe telehubs and malls and go on landmarks to boutique stores owned by those mentors, etc.

I've spend months camping telehubs to see how they work. Newbies constantly shoot up out of them. They click, they go to them, they shop, the meet each other, they rez stuff. This is all the free normal market of SL. You are killing it off in the name of some utopian dream. I feel for this world...

It's especially unfair to be pre-cooking this test AFTER 1.7 when you considerable de-rezzed the world on us, making all of us having to have this really annoying experience of traveling somewhere and not being able to see WTF is going on around us.

The idea that newbies can't click and find a red vector is completely at odds with all the new experience we ourselves had as newbies, and with the hundreds of newbies we ourselves help outside the enclaves of OI and HI and WA and all the rest where you manage and filter.

Your answer is a fascinating study for me about corporate culture, group-think, core-think, and everything else. I really don't want you to fail. I want you to succeed. To do that you need to break out of this magic circle you are in and come live in the world with the rest of us and see there are many, many impressions and facts on the ground that run completely counter to your received wisdom.

Put aside all that stuff about p2p -- the real issue is that people can't find the people that interest them, and can't find the things to do that interest them, because you don't have enough packaged, pre-set, manageable modules that give people a sense of accomplishment when they land.

For example, if you could get of your ideological aversion to land (and stop listen to the forum FIC), you'd have newbies land and face a billboard that gives them options: "click here to homestead on your own 512!" and "click here for some prefab hoomes" and get many many more of the premiums buying and building quickly.

I still feel that the *haste* with which you are putting in a new transportation system when only in August you said you had no plans to do it belies some pressure from investors or the marketplace somewhere.

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