January 19, 2007

Games People Play : Making Money from SecondLife

I am often asked a question on whether it is possible for SecondLife to be a source of revenue and my answers is simple : depends on what you do there.

Like the Web, SL is a platform and a platform does not make money. There are websites that are a source of revenue and there are websites that are purely informational or educative and SL is no different.

I believe that one of the biggest sources of revenue in SL could be online games. Games are a worldwide industry that draws billions of dollars of revenue and the popularity of this industry lies in the fact that Microsoft, with XBOX, Sony with PS3 and Nintendo have developed specialist hardware devices for people to access these games.

If you look closely, the fundamental architecture of the games that run on these platforms is very similar to the 3D Virtual Universe technology that is the backbone of SecondLife. It is all a matter of positioning and moving 'solid' artifacts through a virtual space and making them interact with each other -- whether it is a gun shooting a man or a man driving a car through the streets.

Now that the SL client has gone into Open Source, it should be very easy (relatively easy) for each of these games to be 'ported' from their proprietory platforms to the common SL platform. The initial versions of these games will be less sophisticated than their proprietory counterparts but the benefits of open-ness will outweigh the drawbacks.

In traditional client server architecture, proprietory frontends like PowerBuilder, Oracle Dev2k, Visual Basic etc were always more sophisticated when they were used to build applications that were connecting to a RDBMS, but today, the browser front end has become the de-facto front end for all client server applications.

Games could follow the same trajectory.

Newer versions of the games could be developed for use on the SL client or a modified version of the SL client. Perhaps there will be clients developed for the major gamestations like XBOX, PS3 and Nintendo and when this happens the traditional games will move from their respective servers to the SL servers.

This means that we do not have to reinvent the wheel again. The IP (and revenue streams ) attached to these popular games can move to the SL platform and bring in a generational jump to existing SL applications.

Taking things a step further, the Movie Industry can contemplate the creation of movies that are set in SecondLife ... and these could movies that one does not merely watch but one that people can participate in.

Would these be movies ? or would these be classified as games ? Or are looking at the convergence of the world of movies and that of 'games' ...

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