David Kaye, one of my business partners, has a fun post on his blog, the Razor, about the difference between media interest and consumer interest, using Second Life and Runescape as his examples. Media interest essentially represents hype and consumer interest represents substance (at least from a business point of view). Media interest/hype is useful if it gets you consumer interest/substance, but otherwise, it’s mainly useless hot air.
Dave points to two salient facts that are pretty interesting side-by-side.
- A Google news search of Runescape turns up 23 articles, and most are by minor publications.
- A similar search for Second Life turns up well over 150 articles about it.
This shouldn’t be a surprise though. Linden Labs’ PR machine is really, really good and Runescape isn’t particularly interesting except as a major consumer phenomenon. Almost everyone in the virtual worlds space could learn from Linden’s PR efforts in any case.
Now let’s look at the Google trends data for Runescape vs. Second Life. Runescape, which, as Dave mentions in his post, is supposedly the 7th stickiest site in the world, has many, many times the amount of consumer interest SL has, and continues to grow quickly (though SL is also growing). Heck, Runescape was the 3rd most searched term on Lycos for the week ending June 3rd.
What can you say about this kind of graph? It says to me that direct marketing rather than brand-building exercises are the way you build what is, fundamentally, a consumer-oriented business: running virtual worlds. It says to me that Linden might want to consider focusing a little more on the consumer and a little less on getting its name in the media. I talk to people in the games industry that haven’t even heard of Runescape, and that hasn’t stopped it from becoming the second most popular MMORPG in the world. Just last month I was hellping a fellow at an investment bank whose job it is to monitor the games industry for opportunities, and he had never heard of Runescape (though he knew all about Second Life).
Now, the Linden folk are not dumb people by any means. Quite the contrary. They’re also backed up by some very savvy investors, like Amazon’s Jeff Bezos. I can’t help but wondering what I’m missing, or if they’ve become collectively starstruck/drank too much of their own Kool-aid. Let’s accept Philip’s claim that Second Life is essentially infinitely scalable from a server perspective. I’ve no way to evaluate that statement so I may as well believe it. Assuming that, what is there to be gained by taking such a non-consumer strategy in their marketing efforts? Why spend so much effort getting into press when a consumer-facing marketing drive (court your customers!) is likely to be so much more effective? It often smacks of press whoring for its own sake, to me, but Linden doesn’t strike me as that kind of company and their financial backers definitely don’t strike me as types looking to throw away money to get an ego-boost. So what am I missing? Fill me in!
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June 30th, 2006 at 9:39 pm
Psychochild
I always thought SL/Linden Lab’s strategy was to appeal to investors. Getting lots of users is a nice way to get attention, but focusing on PR gets your information into the mind of investment bankers (as you point out in your article), and that makes it easier to shake the tree and get some people interested in giving you some money.
I’ll also point out that SL’s PR pointed out their growth rate for a few months earlier this year. It’s easier to claim double-digit growth when it doesn’t take many new signups to achieve that.
My gut feeling is that they’re doing the right thing. If they truly want to be “The Metaverse”, then it’s going to take a lot of work and money to make that happen. By focusing on PR and getting their name in front of investors instead of just customers, they’re ensuring they have access to some of that money. Also, having fewer players at this point is a good thing, since it can reduce the negative word-of-mouth that sometimes comes from having large groups of people, as well as other benefits like I described above.
My analysis,
July 1st, 2006 at 11:12 am
Matt
Wow, I’m not sure I could disagree more, Brian.
Landing investors isn’t a goal. It’s a means to an end. Further, Jagex has managed to land far more investment, with far less media hype, because they have an actual, (highly) profitable company. They’ve received fat buy-out offers from major media conglomerates and can afford to just turn them down.
Also, having fewer players at this point is a good thing, since it can reduce the negative word-of-mouth that sometimes comes from having large groups of people, as well as other benefits like I described above.
Three years after release, it’s good to have relatively few players (compared to the amount that’s been spent on SL)? I’m not even sure how to respond to this.
The point I was trying to make in my post was that when you put SL and Runescape side by side you get a pretty interesting comparison. One has focused almost entirely on media hype and has failed, despite initial, large VC backing, to make a single dollar in profit, at least as far as I’m aware of. Runescape, started with no VC backing, has managed to become one of the largest virtual worlds in existence, has attracted more VC backing than SL, is extremely profitable, appears to STILL be growing more quickly than SL, and has done it all without spending its efforts on hype.
Sure, there are differences in the products themselves that make this a matter of not quite comparing apples to apples, but I think the differences in methodology and the respective results say quite a bit.
–matt
July 1st, 2006 at 8:06 pm
Mike Rozak
Random comments:
- In the late 1990’s, when various trendy internet stocks like Amazon.com and Netscape were all the rage, people didn’t get my cyncism/humor when I stated that most mom-and-pop grocery stores made more money than Amazon.com/Netscape… which was true, because both were hemmoraging money. Furthermore, based on ROI, mom-and-pop grocery stores are (probably) still more profitable than Amazon, Netscape being deceased.
- Another interesting division between virtual worlds is to look at those that start out small (and obscure) and ramp up, while those that start out with a wad of marketing cash, get lots of users, and then die away over the next few years. The small & obscure approach allows the world to iron out the bugs and perfect the game, such as with Runscape, SL, or Eve Online. The big bang approach usually results in hit-based games and large numbers of frustrated players.
Note: In a sense, WoW managed to start out “small & obscure” since their initial population was 200K, but has gradually ramped up to 6M(?).
July 3rd, 2006 at 10:12 am
Matt
I understand what you’re saying, Mike, but the difference between Amazon in 1999 and a mom-and-pop grocery store was that the m&p grocery store produced far less revenue than the big hyped up dot coms. The Dot Coms’ hopes were that once they overcame fixed costs, they’d turn profitable, bigtime (which has happened for a few of them). If you want to compare the two, SL comes much much closer to an m&p store than Runescape, keeping in mind that Runescape has at least 20x more users than SL.
–matt
July 11th, 2006 at 12:12 pm
Korben
Mike Pondsmith of R. Talsorian Games once said (about tabletop RPGs), ‘Our games spread by infection.’ In other words, their success relied heavily on word-of-mouth advertisement and on each generation of players helping the next one with the learning curve.
Virtual worlds may work in a similar way.