Updated: Industry Reacts to Lively's Closure; RRR Was Still Planning Projects

Google announced last night that it would be shutting down Lively in at the end of December, just under half a year after it launched to beta in July. At the time, Google's entry to the virtual worlds space was widely regarded as validation for the industry.

"I think there’s going to be a lot of speculation that ‘If Google couldn’t do it, it’s not a valid space.’ I kind of think that’s bunk," commented Reuben Steiger, CEO, Millions of Us, who had worked with Lively prior to its launch.  "While we invested time and effort and energy into supporting it and making it successful, the takeaway is that building a consumer world and making it a success is harder than it looks.  My guess is that with a longer runway that could have been a success. It was a totally worthy effort and at least in my conception a step in the right conceptual direction. I think they had a lot of visitors early on because of Google’s name, but perhaps repeat visits weren’t as satisfying. They’ve got to be, as a culture, experimental, but also ruthless about what to keep."

At Lively's launch, Millions of Us was one of the preferred developers authorized by Google to add to and develop in Lively. On day one, Millions of Us brought in National Geographic with a branded room to promote its television show ""LA Hardhats."  While traffic for Lively has left some underwhelmed, Steiger said the experience was still worthwhile.

"Absolutely. That’s what innovation is about," he said. "You work with stuff early before there’s a rush on it. You overlook the not-ready-for-prime-time features in exchange for a sneak peek and having those advantages. We had a ball with that."

Since then, though, Millions of Us had been largely uninvolved with Lively and had not been informed of the plan to shut it down until the official announcement hit the Google blog. Rivers Run Red, though, came into Lively later than Millions of Us, but had more plans.

Mimi Browning, Communications Director, Rivers Run Red, said that the company was looking at future projects based on Lively and in the process of starting a major project in the virtual world. Google, accordingly, let Rivers know ahead of time that that would no longer be an option. Rivers Run Red will, instead, continue its Immersive Brandspaces work in Second Life, though Browning recognized Lively's potential.

"The main attraction of Lively was its accessibility, which made it a worthy candidate for major projects looking for wide-audience participation," she noted. "Sure, there is a plug-in to download, but nothing that required the commitment demanded by other platforms. It seemed to us an ideal solution for companies looking to integrate a 3D experience with their current web/digital strategies."

Some observers may be surprised, as I was, that brands were investigating Lively after it had received lukewarm responses from the mainstream media and a drop in traffic. Browning says interest, however, was present for consumer brands even as enterprise users looked elsewhere.

"Because we were so focused on developing Immersive Workspaces for the Second Life platform, we wanted to still provide Brandspaces for clients, and again, Lively presented itself as a very attractive platform," said Browning. "Sure, we did get some interest from companies looking to use Lively for collaboration and e-learning, but those quickly waned as they came to realize the limitation of the platform such as the lack of interactivity, voice, and surprisingly with some, the lack of a Mac client."

For anyone looking at Lively as a sign of doom and gloom for the industry, it might help to compare it to another, similar product. Google initially attempted to acquire IMVU. Afterward, IMVU Co-Founder Mel Guymon left to serve as Head of 3D for Google and work on Lively, which has prompted more than a few comparisons.

IMVU, which recently launched a new music service, says November is on track to be the company's best month ever from a business perspective. As it stands, last month was the second-best ever.

"We regret to hear that Google will be closing Lively. We welcomed them as friendly competitors," IMVU CEO Cary Rosenzweig said in a statement. "Creating a successful virtual world is not easy. You need to build a compelling 3D experience, and you need a viable business model to support that experience.  IMVU has been learning from customers for almost five years, and our product has evolved based on intense customer input over a long time."

For those looking to get into the space, Rivers Run Red's Browning cautions that, as Google has done after the fact, companies should evaluate how launching a virtual world fits into their overall strategy.

"It definitely goes to show that companies that have a number of core products/solutions to their business (in this case Google with search, ads, and apps) are going to find it difficult to justify a venture into the virtual world space if they cannot commit the time and resources it takes to actually foster these ventures," Browning noted. "So companies that are strictly devoted to virtual worlds shouldn't feel the brunt of this - rather it's the companies who are ‘dabbling’ away from their core business that need to look at this and consider how committed they are to virtual worlds and those types of immersive spaces."

It remains unclear what will become of the Lively team and X-Ray Kid, the development and creative team spun off to work on artistic assets. X-Ray Kid's website says that it is working on numerous other projects under NDA, though in September the company was still talking about Lively as a potentially revolutionary games platform.

Neither members of the Lively team nor X-Ray Kid have responded to requests for comment at the time of this writing.

UPDATE: Vivaty launched its own Web-embeddable virtual spaces to open beta the same day as Lively. The timing and surface similarities drew plenty of comparisons--and more than a few jabs at the smaller company's timing and its "9-hour life."

Vivaty is apparently still going strong, though. CEO Keith McCurdy offered his thoughts from vacation on Lively's closure:

I don't think Google's decision to end their Lively experiment really means anything for the rest of the players in virtual worlds. That goes for Vivaty and for thick client application download products like Second Life and others. Google is the biggest internet company in the world. As a business they have very specific goals and priorities. I think Google made it very clear, and many if not all other companies
have also made it clear, that these are economic times of focus and making sure all spending is spent on near-term goals and concrete strategic objectives. I believe (but I am not at Google) that Lively was
truly an experiment for Google. They have, or maybe now had, a culture or rampant experimentation that everyone had a lot respect for. The harsh reality of economic downturns is that this type of approach is a luxury, and I am sure every project not core to their key revenue streams and proven to throw off economic benefits in the near term are being scrutinized, heavily. So that is the simple economic truth to the story.

The second part is that Google at its core is a technology company. Virtual worlds are part technology, part creativity, part entertainment, and part community. I think Google admits that they are only master of one of those four. And even in the fourth area, Lively was not fully built on Google technology. They licensed the key technology piece from a 3rd party. So in light of the fact that they are not proven to be good at 3 of the 4 components of the project, and the fourth part was not their technology, I think they decided this was just way to far astray from who Google is as a company.

So all in all, I don't believe that Google's approach of experimenting, it's extremely short period of effort, and its relative lack of success in the key areas needed for success in virtual worlds meant that
this was something they should have succeeded at. The deck seems stacked against them. Google is a great company. But if it was not for Brazil, their experiment in social networking, Orkut, would have been shut down a long time ago. Would that mean that social networking is something Facebook and MySpace and Bebo and others should have given up on? I don't think so.

Electric Sheep Company CEO Sibley Verbeck has also written up his thoughts and reactions to Livey's announcement on his blog, which I'd recommend checking out.

Comments

[mimi browning]

Joey, for the record, it's Mimi Browning now :)

[Richard Trigaux]

I am sad to see Lively closing, but not surprised at all of its lack of success, which led Google to this decision.

Seems that nobody yet understands what made the success of Second Life: the ability to build OUR dream, not a pre-masticated dream, not a new Disney world. This requires tools, which are still unique to Second Life: easy in world build, land tools, group tools, communication tools, search, teleport, etc. Lively offered only a little part of this. Success for a virtual world also, and first of all, requires a full freedom of style, philosophy and occupation, which Lively did not offered at all, with its ugly pre-designed caricatural avatars. I just fled when I saw this.

So the closure of Lively is in no way a bad new for the whole virtual world business, it is just a confirmation of the millenia-old rule that a product which don't fit somebody needs just don't sell, even with a prestigious label on it, even offered for free. If Lively had be good, we would have seen a massive exodus from the expensive Second Life to the free Lively.

If anybody wants to compete seriously with Second Life, it is still possible right now (especially with its suicidal management by Linden labs). But for this, one need to offer in one package all the line of services and tools which made the success of Second Life, and even more (bug free viewer, no griefing), at a cheaper price, and in full freedom of philosophy, religion, race, style, purpose, activity, etc.

I hoped it was what Google was doing. But seems that they just did not understood.

[Joey Seiler]

Right. Oops. Corrected--and congrats again!

[tagami]

Joey - great article. Quick correction: What we launched when I was @ Millions of Us was "LA Hardhats", not "Deadliest Catch" for National Geographic.

[KosmiK Guru]

First article I have seen on this topic that provides a good analysis and insight into the possible reasons for Google's decision. Thank you.

While the business decision in these economic times may seem to make sense, as a lively user, I am disappointed by this abrupt decision to shutdown a beta product
without giving it the right ingredients to succeed. I see the following as failings of google:

a) Not advertising for it adequately to excite and attract a user base
b) Not opening content development so that users could truly experiment with this beta product and enrich it with content
c) Not providing a mechanism for users to save their content who now stand to lose long hours of work they put in to make creative things with Lively.
d) Not incorporating an ad based revenue model through the virtual rooms. This is the core strength of google and one would think this would have been an obvious step for them in a 3D world. hmmm...
e) Not doing a survey of the users about the tool before deciding to pull the plug
f) Not recognizing the development of a dynamic and close knit community on lively that is willing to do whatever it takes to sustain lively - from staring at ads in their virtual rooms to opting for a paid membership.

The last point is particularly noteworthy in that the Lively users are willing to stand up for a beta product so strongly. This is because there is no equivalent in the virtual world to the aesthetics that Lively provides. The ease of use by embedding on web pages is another big strength of this product.

The Livelyzens (lively users) have come together to appeal to Google to stall the shutdown. (http://livelyzens.com). While time is short, we are hoping to showcase the capabilities of Lively through a Machinima video contest using Google Lively and other initiatives.

Google should consider continuing the product or open-sourcing it (is that even possible? since lively apparently uses a modified version of gamebryo which is licensed?). It is short sighted to shutdown Lively at such an early stage.

Visit http://livelyzens for details about our campaign.

We request netizens and supporters of virtual worlds to evaluate Lively for its potential and support us in our appeal by signing the petition at http://www.petitiononline.com/golively/petition.html

A petition signee hit the nail on the head with this comment "I love Lively, who loves gmail?"

KEEP LIVELY ACTIVE!

[Joey Seiler]

Thanks, Ted. It's corrected.