I wrote about Linden Lab laying off 30% of staff here: Linden Lab Layoffs. I wrote that in the next few days we would see more information coming from those with an inside line to Linden Lab (LL). New World Notes (NWN) and Massively are following the layoff story and speculating. NWN’s Au is digging out more facts. I think my favorite SL blogger, Gwyneth Llewelyn, in [Reset] and do a 180º turn gives a vastly different insight than many headlines in the SL-blogosphere suggest.

As usual predicting the future is speculation. However, what Linden Lab is planning is not speculation. Whether they actually get it done… But, a direction is a direction and that can give us perspective. Gwyn’s writing gives us a new insight.

Understand that over the past year LL management has tried to focus on corporate involvement and cater to businesses. M. Linden being corporate friendls tried to make SL more corporate friendly. LL did everything a business might want except address the cost of developing in SL’s virtual world. There are two things that affect cost that LL did not resolve. One of those is the data format of their virtual world. One cannot export a build in SL and take it to, say, Blue Mars. The hope is that SL 2.1 will change that. I usually call what some refer to as SL 2.1 as the addition of freeform meshes. That mesh addition would mean models developed for one world could be moved to another; drastically reducing a business’s cost for virtual world development. So, that change is in progress.

The other is the cost of the regions. Fortune 500 corporations can afford SL and Blue Mars prices. Small entrepreneurs can’t. A $300/month tier is not cheap. Large companies and governments seem to miss the basic idea these small entrepreneurs are the people that make the world go around. If they can’t afford to experiment and gamble, they stay away. If a casino’s minimum bet was a million dollars, how many people would be there gambling? Think about why penny slots exist. Things have to encourage entrepreneurs.

There are ways around the initial region costs for experimentation. Those ways are known to those of us that are experienced in SL. Most new entrepreneurs don’t have that knowledge. LL has never figured out how to communicate the resources they have to entrepreneurs… or to new signups for that matter.

The result is businesses find OpenSim and experiment there. I have 3 regions in OSGrid. In SL I spend about $0/yr because I have a small business that is paying the rent. It is possible for SL to be cheap dollar-wise. The real cost is in the knowledge curve to get there. OpenSim more easily fits the mind set of small business entrepreneurs and presents what appears to be and for the new a practical less costly route.

LL may have a plan and be executing it. The layoffs may signal a completion of one phase of development and a move to the next phase. So, just as the contraction crews leave when a building is completed and office staff moves in, so too LL may be changing. Or they may have just realized they have been chasing the wrong market and are changing directions and cutting cost.

Either way, there is a change in LL. I think Gwyn’s take on the LL change is likely the more accurate of those I have read. May be LL will focus more on existing residents and the things that could encourage new sign ups to stay.

There is no doubt they are going to focus on having a web browser based viewer in the near future. Whether they will go with existing technology or try to develop their own remains unclear to me. There is no doubt the players involved are interested in making Internet 3 a 3D experience and supporting virtual worlds. The pieces are coming together. How quickly is hard to say.

There appears to be a group that is moving toward having the Mozilla based browsers support 3D virtual worlds. This for now means Firefox, Safari, Chrome and Opera. We know Google has been working with 3D worlds and ways to turn their Google Earth into a better 3D platform. Unity3D seems to be leading the way and to have figured out what businesses want.

Unity3D is getting more market share by promising a render as good as SL’s but available to Windows, Linux, and Mac and without the viewer download. Plus the protocol would be basic HTTP. Much of SL’s networking is proprietary or at least unique. Unity3D will work on desktops, laptops (cheap ones in the $300-$400 dollar range) as well as iPhone, iPad, and smart phones (Driod(soon).

I believe the Blue Mars competitive threat moved LL to respond and added a sense of urgency about upgrading graphics quality and the addition of freeform meshes. I think Unity3D is presenting the same competitive pressure for more compatible network protocols and browser support.

Whether LL is making a tragic Wang like change of direction or just realized what isn’t working and doing more of what is working, it’s hard to say. But moving to have web browser support is likely to help SL’s popularity. But is not likely to make a big difference if the basic problems existing residents complain about and turn off new sign ups are not addressed, not much will change.

So, the layoff may be a smart planned move at the completion of a development phase or they could just be an admission of a plan not working and a change in direction and reallocation of resources. Time is going to tell.

I don’t see the layoffs as something to cause panic nor do I see it as a clear statement of the state of SL. I do think LL is continuing to move ahead. After reading Gwyn’s article I am less inclined to think the changes are from financial pressure forcing a change as much as it is the return on investment is disappointing and LL is moving on, in which case the layoffs and cost cutting moves are more of a healthy thing.