Walled gardens are opening their gates: Linden acquires Avatars United, Habbo on Facebook

In December, the world’s biggest teenager virtual world Habbo plugged into Facebook Connect. This week Linden, the operator of Second Life, announced the acquisition of Avatars United. Avatars United can be described as a sort of “Facebook for avatars”, complete with a third-party applications ecosystem.

What does this mean? It’s a sign of walled gardens opening up. Virtual worlds and MMOs are traditionally silos where users and data are locked in. Through Avatars United, Second Life users will be better able to link their SL profiles with the outside world: the whole universe of existing social media services, feeds and applications. It will also enable new kinds of third-party innovation in the way SL integrates with other services. All this will increase the value of having an SL account to a user. This is assuming that SL opens up some interfaces to Avatars United: as of yet there is next to no data flowing.

On the other hand, by opening up their walls, operators also take the risk of users escaping to greener pastures. As teenagers start to access Habbo through Facebook as opposed to navigating directly to the Habbo home page, they are exposed to a huge variety of competing offerings. Suddenly Habbo is just one among hundreds of avatar-based hangouts. Competition for users becomes much more intense. Fortunately for Sulake, Habbo’s production values are above anything I have seen among native Facebook apps.

Perhaps the silo operators don’t have much choice. Sulake was downsizing its staff last year, while Second Life’s growth is not what it used to be. Neither platform has anything like the user base of the leading social gaming apps. But given an opportunity to compete head-on against the likes of Zynga and Playfish, both probably believe they could do well. The silo operators are traditionally much better at monetising their user base, so it’s worth a try.

Scholars and commentators have been speculating about interoperability between virtual environments for a long time. It is usually thought that this will be achieved through virtual environments adopting some sort of common standards when it comes to representing objects and avatars. In light of these news, I think the future looks different: what integration there will be between major online hangouts will take place through open but proprietary interfaces coming together at nodes such as Facebook and Avatars United. One could imagine, for example, an achievements metagame spanning multiple MMOs. This could be implemented today in Avatars United.

Full disclosure: I consulted for the Avatars United team on monetisation strategy and was a minor shareholder in the company when the purchase took place. At the time of writing this post I no longer have any financial motive to talk them up.

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