Group 1 analyzed Second Life, an online virtual world. They found that while it had over 16 million users in 2008, high dropout rates were a challenge. To increase retention and appeal to mainstream users, they recommended simplifying the interface, improving onboarding, incentivizing new users, adding starter packs, and collaborating with other platforms. Moving from a closed system to an open platform could generate more content and opportunities to solve Second Life's user retention problems.

1. GROUP 1
Ankur Mukherjee 2014007
Ehrlich Pereira 2014013
Mark Gonsalves 2014027
Mayank Kalia 2014029
Varun Sharma 2014124
Dianna Godiwalla 2014142
Akarsha Kadam 2014192
Kshitij Mishra 2015213

2. Second life by Linden Lab
• Online 3D virtual world created by Linden Labs
• User-generated virtual world and not a traditional game
• Mission-”Connect everyone to an online world that advances the human
condition”
• Launched in 2003 (Revenues $77 mn & 16.8 mn residents in 2008)
• Features-Linden dollars, intellectual property rights, avatars, built structures and
experiences etc.
• Source of revenue- land sales, Land-use fees, Premium memberships & Linden
dollar conversion fees

3. Challenges
• What market to target? –
• Enterprise customers,
• Educators,
• Adult consumers, or
• Teens
• Identify mass market demand?
• Is the positioning as ‘NOT A GAME’ correct?
• Ways to combat antisocial behaviour/fraud?
• Technical crashes due to limited processing power
• How to ensure that wealthy players don’t have an
upper hand?
• New strategy required – chasm between start up
to a larger competitive market with higher stakes
• Need of a referral and viral growth strategy
• Ways to boost in game purchases and increase
revenue per usage hours
• Incentives for migration required as majority of target
users are MMOG players too
• Is a change in advertising/promotion strategy
required? (from the current – WOM strategy)
• 90% new users abandoned after a brief trial
• Rate of new user registrations had slowed down
• Increasing competition (There.com, Kaneva, HiPiHi,
Home, OpenSim etc.)
• Internal management - Adjusting to managing style of
Kingdon after charismatic leadership of Philip (anti-
management style)
• Strategy to make the orientation time more user
friendly and increase customer retention

4. Virtual World Industry
Supplier’s power: Low
Didn’t involve high end technology and was
imitable
Buyers Power: Low
With increasing membership power of Linden will be high
Threat of new entrant: Moderate
Huge untapped market, Low investment but high switching cost
Threat of substitutes: High
Many MMOGs, social networking sites & messengers
Competitors: Moderate
MMOGs, There.com, Kaneva, HiPiHi,Home
Mostly teen focussed

5. Technology Adoption Cycle
• Innovators-Builders , scripters, developers & code hackers, high
financial lucidity, probably competitors & tech experts in case of SL
• Early adopters-Keen to try new technology, probably MMOGs
enthusiasts & highly socially active people who find value out of the
product in case of SL
• Early majority-Come because of influencers, probably consists of
people who would try SL because all their friends seem to be there
• Late majority-Come because everyone seems to be a part of SL but
not because they seem to find personal benefit from the experience
• Laggards- Aged people, not highly social or outgoing in case of SL

6. Observations
• User segmentation
• Social gamers (40%)
• Fashionistas (20%)
• Role Players (20%)
• Innovators (10%)
• Capitalists (10%)
• Revenue sources
• Land sales (11%)
• Land-use fee (68%)
• Premium membership (10%)
• Dollar conversion fee (11%)
• Mass customers are reluctant to enter as a tools/coding/design element is
attached to content creation
• Comparison to MMOG’s with established characters and a storyline
• Steep learning curve - Time taken to reach peak-involvement with Second Life
is high

7. Crossing the chasm
• Target adults and educators
• Focus on retention
• Simplify user interface
• Enhance orientation experience
• Incentivise initial stages. E.g. free costumes, etc.
• Introduce Starter-packs (demos, trials, walk throughs) for new users
• Collaborate with APIs for new features
• CRM
• Referral program for rewards as in-game add on’s
• Marketing campaign
• WOM not enough
• Remove nerd-image/stereotype
• Ads on social networking websites
• In 2009, Second Life had 16.8 million users, out of which –
• 941,000 logged in the past 30 days
• 522,000 logged in the past 7 days
• A virtual world like Second life is extremely immersive and
assuming that an average ‘loyal’ user, checks in/plays at least
once a week – There is an efflux of more than 400,000 users.

8. Platformization
• Ascend to a platform
• Franchise to solution providers
• Testing and setting standards
• Will increase content generators
• Provide new dimensions and opportunities
• Excellent marketing opportunity for Second life as well as for
partnering firm

9. Thank You