Case | HBS Case Collection | March 2008 (Revised August 2009)

Linden Lab: Opening Second Life

by Thomas R. Eisenmann and Alison Berkley Wagonfeld

Abstract

In early 2008, managers in Linden Lab, creator of the virtual world Second Life, faced decisions about the company's strategy. Despite profound initial skepticism about demand for a user-generated virtual world that was not a traditional game, Second Life had achieved profitability and strong growth. However, growth had strained the company's infrastructure, resulting in frequent software crashes. Software ease-of-use was also a serious problem. As a result, 90% of new users abandoned Second Life after only a brief trial. Management was considering whether marketing partnerships and open sourcing its software might relieve strains and facilitate future growth. Linden Lab was also debating whether and how to allow interoperability between Second Life and other virtual worlds.

Keywords: Business Growth and Maturation; Decision Choices and Conditions; Entrepreneurship; Growth and Development Strategy; Open Source Distribution; Partners and Partnerships; Software;

Citation:

Eisenmann, Thomas R., and Alison Berkley Wagonfeld. "Linden Lab: Opening Second Life." Harvard Business School Case 808-114, March 2008. (Revised August 2009.)