Rumors of the layoffs emerged a few days ago, and paint a more detailed picture of the reductions. The report says Linden Lab closed their UK and Singapore offices, cut the head count of the Seattle office by half, let the enterprise group go, and made staff reductions at their Mountain View and San Francisco offices. The shuttering of the enterprise group, which creates a customized version of the virtual world that sits behind a firewall, would make sense considering the new move for Second Life to be completely browser-based.
An HTML 5 version of Second Life would be more compelling indeed, but I don’t think the idea has much potential left. People are increasingly comfortable with sticking to their primary real-world identity even when they are interacting online. That reduces one of the major motivations of many users of Second Life. But more intrinsically to the software itself is that I don’t think directly translating real life movements into a virtual world is the best way for the user to interface in a 3D environment with the content. A new metaphor is needed.