The Second Life economy: calm before the storm?

Linden Lab today released the Second Life economy statistics of the third quarter of 2008 and it shows some healthy growth in some areas:

  • hours spent by users in Second Life passed the 100 million mark
  • the total land mass continued to grow significantly to just under 2 billion square meters
  • the monetary value of user-to-user transactions in-world hit 102 million US dollars – identical to Q2 2007, the last period before the gambling ban which saw a large drop
  • There continues to be a decline in premium subscriptions althugh no specific data is given. Linden Lab claim this isn’t of great concern to them:

    ..a decline in premium subscriptions does not mean we have a reduction in the number of land owners. Therefore it should not be used as a measure of the health of the land market, of the Second Life economy or the health of Linden Lab. We are currently in the process of evaluating ways to make premium subscriptions more valuable to Residents and less dependent on Linden dollar stipends.

    If it’s of no concern, I don’t understand why the same graphing prowess couldn’t have been applied as it is to the other measures. At the very least it’s a rough measure of Second Life mainland health.

    The results overall are very positive but Linden Lab themselves admit the Openspaces issue will impact the next quarter’s performance. Add to that the real-world economic climate and we may see a very different picture come January 2009.

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    • http://www.virtualworld.sl 3D Virtual Worlds

      There seems to become no end on the every growing world made by Linden Lab.

    • little puppet

      too bad nobody wants to buy all that empty land.

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    • Neo Citizen

      The decline in premium accounts should, in fact, be used as a measure of how things are going in Second Life. It may not be having an immediate affect on their bottom line, but it does measure customer loyalty – or in this case customer frustration.

      Linden Lab has displayed attitudes toward their own user base ranging from indifference to open hostility, as evidenced by the latest ill-considered attempt to gouge their users in a glaringly obvious bait and switch price hike for sims in their lower price tier. The United States' Better Business Bureau is in communications with great numbers of residents of Second Life regarding the possibility of this price hike having violated consumer protection laws in that country.

    • http://aboutland.wordpress.com/ Linda

      What i see is that ( keeping monthly records since Jan. 2007 ) the growth of new accounts is a strong down trend since Dec. 2007. At this moment it's only 50% of Dec. 07.
      It seems that a certain core of older accounts have expanded user hours. It's my experience too, although my intrest in sl suddenly has fallen. The reason is that it is very addictive like alcohol indeed.
      Where alcohol is bad for health so is SL, is my experience.
      US studies show that virtuality can cause damage in the balance of the connection between the 2 brain halfs through time. This is my experience too. My sensitivity has grown is what i have clearly noticed. And my creativity has fallen. Could it be that i was not a balanced persona in the first place?
      Research has always confirmed me otherwise, so what has SL done to me? It has made me out of balance; and it's exactly how i feel.
      It could very well be that the SL's impact on our emotional life is too much. Experiences in SL can be extreemly negative where the positive experiences are average.
      More than ones the media talks bad about virtual worlds, and not with a reason.

      All of that said, today we have more virtual worlds.
      I think that the market is spread over them now and SL simply has lost market share. Meanwhile a core of players have expanded user time. This looks like a dead track to me.
      What i still don't understand is that we see no advertising about SL where WOW had a word wide campaign (for example). I stayed loyal to SL, but no marketing campaigns has always wondered me.

      Will the RL economy have an impact in SL's economy?
      Difficult to say, it could very well be that SL is experienced as a more safe haven ( of heaven for some ) where people can still consume and can do big things.
      Studies show that many users of SL are well educated professionals in RL. These types often are sensitive to status and big things. Doing big things is 'sexy'.
      If they have less possibilities in RL, maybe a certain part of people will find an escape in SL.

    • http://aboutland.wordpress.com/ Linda

      Thank you for your kind reply in my e-mail Lowel.

      “Hi Linda,
      Thanks so much for your thoughtful response – you make some great points!”

      It is my unique experience and i could go on, however;
      Basic line ( i think ): SL is beyond its hype, and it is also on retour of its product life cicle.
      The inworld economy could show an analog trend, however pauzed due to my studies above.
      In that respect 2010 i would see a serious critical year for SL.

      Communication in and the likebility of SL needs to be severly addressed at this point.

      At that position in the cicle and having that knowledge, 2 scenario's i would tend to see:
      1 A serious significant innovation in depth that needs to be financially activated as well as managed.
      Within that innovation, create acceptable communication possibilities and reduce negative individual social risks.
      2. Phase out SL and redesign a virtual world aligned to new insights of modern studies/developmenets on both fields of technical and social psychology.

    • Chad

      Following the ongoing Openspace/Homeatead scam, it will be interesting to see if LL experience a 'decline in land growth', as they predict, or a reduction in the land figures. I strongly suspect Q4 will be bad for LL, though I am sure they will find something else to blame rather than their incompetence.

    • Chad

      Following the ongoing Openspace/Homeatead scam, it will be interesting to see if LL experience a 'decline in land growth', as they predict, or a reduction in the land figures. I strongly suspect Q4 will be bad for LL, though I am sure they will find something else to blame rather than their incompetence.