Second Life Virtual World Expands 44% in Q2
Tuesday, July 8th, 2008 at 11:58 AM by: Zee LindenLinden Lab is pleased to announce results for Second Life the second Quarter.
Land mass grew over 44%. The total number of regions owned by residents increased 44.2% over Q1 to just over 1.5 billion square meters. Our growth was due to the popularity of our newly launched “Openspace” land product along with a change in pricing to make the purchase of land more accessible to first time buyers. “Openspace” regions are full 65,000 square meter regions with an upfront fee of $250 and a recurring monthly fee of $75. We decreased the price for full regions by 40% to $1000 upfront (the recurring monthly fee remains $295). We also launched a new Land Store that instantly provisions new regions. Pricing changes plus a dramatically improved purchase experience fueled land sales in the quarter. On the other hand, premium subscriptions have remained flat since we decreased the stipend to L$ 300 per week in the second quarter of 2007. Prior to that the premium account essentially provided residents with a way to purchase L$ at a discounted rate. Because land represents nearly 8x more revenue to us than premium accounts, our focus has been on the launching of new land products rather than on enhancing the premium subscription.
User Hours grew by 8.5% while peak concurrency grew modestly. Resident user hours grew approximately 6% from an annualized rate of just under 350 million user hours in Q1 to over 380 million user hours in Q2. Peak concurrent users grew modestly from Q1 to Q2 to just under 67,000 users. Significant outages in April prevented this number from growing as fast as it otherwise might. However, uptime improved dramatically in May and June – see the grid status page – so we’re expecting to see continued growth in Q3.
User-to-User Transactions grew over 14%. Total user-to-user transactions, a measure of the gross domestic product in Second Life, grew 14.3% during the quarter from an annualized rate of $300 million in Q1 to $338 million in Q2. Resident spending remained a healthy $0.87 per user hour.
Volume on the Lindex grew 5%. Volume on the LindeX, our virtual currency exchange where users can buy and sell our inworld currency, grew 5% to an annual rate of $108 million. The total value of all the Linden Dollars in circulation grew 8.6% over Q1 to $19.7 million in Q2 with the exchange rate remaining steady against USD at approximately L$ 267 to one USD.
The number of “profitable” inworld businesses grew by 9%: Taking advantage of the growth in the economy, the number of inworld businesses with Positive Monthly Linden Flow, a measure of profitability, grew to 59,000 in June.
Meta Linden has posted the full data for June in a Google Spreadsheet here. We have made some modifications to the format to make them easier to review.
July 8th, 2008 at 12:07 PM
Interesting numbers. What exactly are the priorities for Secondlife now?
Many of us wish for the glass ceiling on concurrency to be broken. And we place this far far higher than interoperability which holds little or no business value. And the transactions metric would be vastly improved if there were not so many SL Outages (Resident outages are any outages where any aspect of SL is impeded or impaired such as transactions. No transactions = outage and you should reflect these outages in your metrics)
Perhaps you could halt work on optional aspects and get all hands on deck for the rework necessary to set SL up for 1 million concurrency. This work would also result in improved transactions. Good all the way around.
Right now we have not a clue about the direction of Secondlife since there are so many camps and leaders running in all sorts of personal achievement directions at the lab. Or so it appears.
July 8th, 2008 at 12:17 PM
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July 8th, 2008 at 12:22 PM
OMG, can we please have the numbers of private sim owners like me that can’t sell their land anymore? There must be a lot of them! I always had 100 % of my land sold, since the last months it is only going WAY DOWN!! My English is not good enough to express what I feel, but believe me, with 12 sims, that I have payd 1700 USD each for, and 4 openspace sims that I have paid the old price for, you feel RIPPED OFF by Linden Lab. Noone wants to have the land for free now! What did you do to SL? And then you come now with nice looking numbers? Not for me, I am afraid, I will no longer invest in more land or start more business…..
July 8th, 2008 at 12:26 PM
And YES I once liked SL a lot, putting in a lot of hours more then 15 hours a day since 18 months. Even stopped my RL job for it…..I now have almost 2 empty sims, if this land abandoning keeps going on I think I will have to get a RL job soon.
July 8th, 2008 at 12:30 PM
LL’s policy of increasing land surface regardless of economic demand is reckless. The number of empty parcels on private sims has never been so high. Something is very wrong when there are 20000 sims for 60000 concurrent users. That’s 12 users for one server.
July 8th, 2008 at 12:35 PM
2 questions.
Value of customer owned land? With the recent crash in land prices and the lower purchase price and tier for the Openspace sims it seems inappropriate to use square meters as a metric. Especially as land on openspace servers don’t carry as much potential because of their limitations.
Have the numbers for user to user transactions been adjusted for meaningless bot to bot and alt to alt transactions? It would seem that failing to adjust for these transfers would artificially inflate the reported values.
July 8th, 2008 at 12:38 PM
A while ago, this blog would have been almost filled with comments by now. The lack of interest just shows that the majority of paying customers have given up on LL and are just waiting for an alternative to appear. LL and its owners and potential investors are only interested in their personal careers and window-dressing SL for potential investors. Nothing will be done to clear the long list of problems, because this will require major investment in both hardware and software….not something LL will ever do. Theirs is a band-aid strategy. To #3 ……. dont hope it will get better…..look at their blog post…..they make money by flooding the market with cheap land…..its not the initial selling price they want…its the monthly tier…..cashflow is king. Premium accounts are nothing they care about any longer……so they are just trampling on the people who helped make this what is ….. Revenge is Sweet ….. I cant wait.
July 8th, 2008 at 12:39 PM
@1: Ann, the “all hands on deck” mentality might help us to raise the glass ceiling, but it doesn’t break it. Breaking the glass ceiling on concurrency requires the sorts of architectural changes that the Open Grid Protocol (OGP) and the Architecture Working Group (AWG) are contemplating.
Various people at LL are working on these things because as an organization we believe that they are in fact critical to the future of virtual worlds.
I, for one, was excited by seeing the cross-grid teleport demo because it’s the first publicly visible evidence that the new architecture really works. It’s the equivalent of seeing the foundation poured on a new house. You can’t live in it yet, but it’s a good indication that the project is real.
Please participate in the AWG discussions. There’s a lot of thought going into not only the technical aspects, but the social implications of the decisions.
July 8th, 2008 at 12:40 PM
I will feel better when concurrency breaks 70,000. People are correct about too much land and not enough concurrent users.
July 8th, 2008 at 12:41 PM
I think two of the previous posts by Ann Otoole and Antonio Asano raise legitimate concerns and represent the opinions of a large portion of Second Life business owners. Ann, in particular, poses some excellent questions and offers suggestions that I feel Linden Labs should address, and I for one would appreciate a public response to them here. Outrages should be charted next to transactions to reflect the effect that we, as business owners, all feel when the grid is down or too unstable to conduct business. Existing landowners, likewise, should have received a month or more advance notice of significant price changes that would impact business–especially landowners with one or more entire regions. I’m confident the decision to restructure prices was made far in advance of the announcement; if not, then the date of the change should have been delayed long enough to give landowners sufficient notice.
July 8th, 2008 at 12:45 PM
What made SL great has been destroyed by its own creators. With OPEN SIM opensimulator.org making great headway SL will be just a side note in history. These are the move of a company that knows the the ride is about to come to an end.
I really love SL… But I see the creators don’t. WAKE UP LL!! Before it is to late!
July 8th, 2008 at 12:46 PM
@7 …you really think they would do anything that would give a fair repre You aresentation of the real situation? The figures are massaged to give a positive impression. You are correct…land mass is a meaningless figure and whatever happened to the investigation into bots? This has conveniently and quietly disappeared. Bots suit LL and help to boost the metrics that make it look (falsely) good. The best way is for people not to buy any more land and either carry on paying their current tiers or sell land that is empty (maybe it will be at a loss) but at least for every sim you sell, you save the $295 a month in your bank account and LL lose it. Maybe the subsequent loss of revenues will thenhelp focus some minds in SF?
July 8th, 2008 at 12:52 PM
[...] Linden Blog Second Life Virtual World Expands 44% in Q2IBM and Linden Lab Interoperability AnnouncementSL5B Panel Discussions 7/7SL5B: Mitch Kapor’s [...]
July 8th, 2008 at 12:54 PM
The truth is: Within the past 12 months (since the international hype cooled down) LL has not won any premium members, but the numbers are in decline. During the same time the declining number of premium account holders obviously doubled the resident land ownership.
In my opinion the raising online hours numbers only are explainable by the bot and pseudo-traffic favoring system and by the many, many who try it and who finally decide not to join in.
And the notable declining sum of residents to residents transactions only prove that the internal econmy suffers a lot recently.
The hype is over, folks, now face the results of your mediocre service and the annoying demand for customer hardware upgrades. And stop spinning, improve.
It is definately worth it.
July 8th, 2008 at 12:55 PM
How about LL publishing a figure of the number of “avatars” logged in by IP address or giving a percentage of “Real” residents and “Bots” in the concurrency figures? There are lots of Sims where an army of bots are sitting on a sky platform …… falsifying traffic and concurrency numbers. If these were excluded from the metrics it would be a whole different story…..but then again……the figures wouldnt look so good would they?
July 8th, 2008 at 1:01 PM
Today, around 11PM European time, I sat in an Infohub (anzere to be precise) and waited few hours to see how many people will log in compared to the number of bots…
Actually, I saw 6 people and more than 30 bots…
Some of the bots are still stuck there…
You know how it is, some bots must log in in a infohub, then are redirected to the right hole or cave or skybox to generate high traffic…
Sounds like we are “living” in a fake world, with fake avatars and fake numbers…
July 8th, 2008 at 1:07 PM
great, LL, and great, all SL users
July 8th, 2008 at 1:08 PM
Wow, what a grow, but that means the Land aquire will cost less to residents? Still see very expressive to buy and to support (tier) the SIM, I really think that if the price get low second life will grow even more as the company and employees. Good for the costumers good for LL.
I think this new architecture is good, the grid seems stable even with the huge population, congrats.
July 8th, 2008 at 1:08 PM
Now we are looking forward to falling land-tier. So that first-time buyer have a really interest in buying this 44% landmass. So fas, as I can see, the landmass is still kept by the landbarons, because nobody will buy it.
July 8th, 2008 at 1:14 PM
It seems shortsighted to me to focus on “new land products” versus enhancing the premium subscription. With decreasing premium memberships (due, one might assume, to a lack of reasons to have one beyond “land ownership”) and flattening concurrency, one can presume a coming crash in the land market as purchasers, expecting an influx of buyers, end up having to abandon land or take a loss on return. Ultimately, both land enhancements *and* premium enhancements should both be looked at: one for now, and one for the next couple quarters.
July 8th, 2008 at 1:16 PM
Getting the bars on the land mass chart shaded for openspace vs full regions would be nice, Zee.
July 8th, 2008 at 1:19 PM
As a side note, that definition of ‘profitability’ does not wash. It means that there is a positive cash flow in-world for a specific period, where no wages are paid in most cases (or if they are, probably not associated directly with the business) and no accounting is made for the time expended by the principle. Sorry, even with the apostrophes, you shouldn’t use the phrase ‘profitability’.
Cash flow is what it is in the real world and Linden cash flow is a better term in SL. If nothing else, all a person has to do to have positive cash flow is cover tier (and that’s if the tier is associated with the business). So they pay L$ 300,000 in the first month to buy land and have a positive Linden cash flow of, say, L$ 10,000 after that. If all goes well, you should make your money back in 2 1/2 years and still no profit, no pay and no cost of money. That ain’t a profitable business. Won’t get money from the bank on that one. Please don’t make up metrics names that would get a CPA in the RL USA in serious trouble. Speaking as a RL USA CPA.
Admittedly, positive LCF will probably be enough to keep a lot of people playing business in SL. Fine. Just don’t mischaracterize the situation.
July 8th, 2008 at 1:29 PM
[...] SL growth (Q2/8 vs. Q2/7): land +122%, user hours +55%, currency exchanged +29%, user to user -18%; http://is.gd/OwY [...]
July 8th, 2008 at 1:31 PM
I have no idea what these numbers mean, but they look good…
A comment on the teleportation to the Open Source grid (since the other topic is closed). I find it amusing that even Lindens can be ruthed. Some people may call that poetic justice. I just say it’s proof that Lindens are just like the rest of us, just with more responsibilities.
July 8th, 2008 at 1:32 PM
So the overall land mass grew by 44%? Great job, that helped kill the overall land market for many of your longtime residents!! So by doing this how many new residents did that bring into the game? How about new residents that actually spend money? You drive exisiting residents out of the game all the time with your clueless attempts at economic controls, policy changes, and a general lack of caring about your customers. It would seem your only real goal is to increase your monthly revenues to make SL look good to investors for an upcoming IPO. If you banned bots this place would be a graveyard so the overall user hours and concurrency numbers are a joke.
You have been pushing low prim sims like the best thing since sliced bread and still have them defined as “light use”. If they are really only intended for “light use” why are you trying so hard to sell them when you know that the majority of people are not using them for “light use”?? How about getting on the ball and addressing this?
Thank god for the concierge staff and how great they are at making customers feel appreciated cause lord knows the rest of LL doesn’t!!
July 8th, 2008 at 1:44 PM
Thanks for the comments. I’ll address as many of the key subjects as I can:
Bots. Based on a set of behavioral characteristics that we observe bots having, we believe that about 10% to 15% of our user hours are attributable to bots. This has been consistent for some time. The corresponding metric that we think indicates consistent non-bot activity in Second Life are the user to user inworld transactions per hour and the LindeX volume per user hour. Both of these have been consistent certainly since the bad of gambling at about $0.87 and $0.27 to $0.29 per user hour respectively. Our revenue has also been consistent at $0.20 per user hour. If bots were an increasing percentage of our traffic, I think there would be deterioration of these economic metrics.
Mainland: Recently, we posted that we stopped expanding the mainland to allow the market to absorb excess mainland inventory. It appears that the price has stabilized & has started to increase again.
Island pricing: Many existing land owners expressed frustration when we dropped the price from $1650 to $1000 earlier in the quarter. Similarly we frustrated a number of users when we raised the prices to $1650 in the fall of 2006. I would expect the upfront price to continue to decline as the costs of the associated hardware decline. Perhaps not as steeply as we lowered prices this time.
July 8th, 2008 at 1:51 PM
Extremely glad to see this posted, Zee - solid data, and in the right direction for the most part. I think there are a lot of people doing pretty well financially on the grid, and keeping fairly quiet about it - but the LindeX volume tells the story.
It’s not the whole story though - clearly some sectors are hurting bad while others do well.
In specific, I’d love to know is how big the openspace ‘market shift’ was, or even if it can be measured, with regard to people leaving say, 1/4 region on mainland or private estates for openspaces.
I suspect this shift was one of the major factors dropping mainland (and private estate) land value, to the point that mainland rollout was halted recently and we’ve all seen one of the toughest land markets in a long time.
Perhaps it wasn’t so much the lower cost of new full standard region, but the oversupply of land in different markets that caused the problem. Who still wants a 1/4 region parcel when openspaces are available? Yet with new signups kind of flat on the short term, there’s not much benefit to cutting devalued 1/4 region parcels into smaller bits and flooding the new resident market either. Mainland, private estate - same effects.
* * * * *
Controversially, in the ‘big picture’ I actually think the lowering of the new region cost was the right move. While I wasn’t keen on seeing a 40% decrease in resale value, eventually the grid will have to compete with lower cost solutions. We need to be lean and competitive when that time comes.
But one of my biggest concerns would be another comparable market shift someday. For instance, if one day openspace regions would be a possibility for anyone, not just the land barons with a standard region to their name already.
One small policy change, and the burgeoning openspace market enjoyed by land barons today would change overnight, sending shockwaves through the economy. To be honest I’ve been a bit shy to get more openspaces, just so I don’t have a lot of risk exposure in that very situation. I have no idea how important such land policies might be to you, or how casually or carefully they might be changed.
Zee, what might be handy going forward, is as good an ‘economic roadmap’ as it would be possible for you to give; uncertainty is a huge factor in the wavering consumer confidence I’ve seen. If we know the long term goals - even if they aren’t quite met it will be a lot easier for residents to plan intelligently. I’d love to hear what M thinks is important about the economy going forward, too.
All graphs and information you are willing to share are much appreciated.
Desmond Shang
Independent State of Caledon
July 8th, 2008 at 1:53 PM
More appropo, Marianne, would be worries about the world economy and how that will affect inworld matters.
Linden Labs started with a rose colored glasses view of users and thought that giving them rewards and providing perqs for content creators and tier payers would make the Second Life experience more attractive to newcomers.
They allowed gambling, pornography and a host of any and all kinds of experinces the users could come up with expecting the users to be mature adults.
So, we had “traffic”, which paid a reward to those who owned land and had users come and spend some time partaking the experience of that land owners creations.
That quickly got abused by those who, in real life, try and “game” the system for a quick buck. So that got scotched by Linden Labs after much hand wringing.
They had allowed gambling in Second Life for ages and expected the users to be adult about this as well.
Then users started abusing and being abused by gambling establishments. Gambling was banned after much discussion and legal study in the end.
What I am trying to make a point about is that Second Life and Linden Labs are more than “just a (fill in the blank) platform”. Besides the technology, there is also the social, geopolitical, legal and corporate aspects to deal with.
All of these aspects require individuals with skillsets for each aspect, and not others. You don;t hire a secretary and ask her to debug PHP or C++ code. You don;t ask the programmer working on the Asset Server database to try and defuse a situation on region X versus people of a different and antagonistic nationality on region Y.
As Q pointed out, SL and LL have gotten where they are in how they reponded to us and also in how they did *not* respond to us over the years. The choices thay have made have not always worked, users have not always been mature and adult in how they dealt with each other and LL. But, LL is looking to the future.
In the final analysis, the mere fact SL and LL are still here, and we, the users, are still able to make *something* of our time here, is a F*CENSORED*G miracle!
I would ask, if any of you out there are programmers who work on any kind of PC based games, graphics or are just red hot tamales as C++ programmers, go apply for a job at LL. In fact, look over their list of job openings. There are plenty and many, as you might note, Anne, are for just the fields you’d need to do what you have asked LL to do (and Q says he’d like to do).
Hell, I have skills I think LL could use, but I’m stuck here in PA or I’d be at their doors, resume in hand
July 8th, 2008 at 1:55 PM
Thanks for your clarification, Zee!
July 8th, 2008 at 1:57 PM
Its really misleading to use advertising to convince people they can make money here, then dump land on the market to destroy the value of their investments. In the securities world, that is described as a “pump and dump” which is illegal.
July 8th, 2008 at 2:03 PM
The posted metrics are abridged - will we get the full metrics, too?
July 8th, 2008 at 2:09 PM
Are the age band stats correct? If so, there has been a big shift toward adult residents.
April
18-24 23%
25-34 35%
35-45 40%
July
18-24 15%
25-34 35%
35-45 49%
July 8th, 2008 at 2:15 PM
Well I assume this is good news for someone presumably Lindens as theres such a fanfare…so how about some return for your customers… a cut in tier charges or an increase in land allowances…. even a few more ‘rungs’ on the tier ladder.
And if you can keep increasing the surface area of linden world how about an increase in the number of prims per plot - more fun to play on the land building and more opportunity to build better looking constructs and possibly even giving a more ‘finished’ look to sl.
Lets see some return for loyalty to the Linden world brand if its doing so well
July 8th, 2008 at 2:26 PM
Interesting comments from LL on the bots - it seems that as always they for some reason favor the bots over real people - everything from helping inflate the user hours, to screwing over people trying to run legit businesses.
No mention of how now that they have just bot friendlied land sales at the expense of all the human users (nice job on the cache of land searches in world so real users get 10 minute old results while bots can hammer the databases every five seconds 24/7), hopefully this means that LL will start providing all users with bots so everyone can join in the bot madness . As for land prices and the metrics that LL uses, or says they use, looking at the previous metrics, they have changed how they figure things from month to month, or massaged the figures somehow - one month we are told the average L$/m is very high, the next it is actually below cost or very close to it. There is no moderation in the supply or demand. As someone else stated here, it is obvious that the increase in new users has soured, so the smart thing to do would be to make sure the ones that are here now are happy, and then maybe, just maybe they will once again bring in their friends etc.
July 8th, 2008 at 2:30 PM
@Deltango Vale : I believe you are referencing the User Counts by Age from the April stats at http://spreadsheets.google.com/pub?key=pxbDc4B2FH95zGGq34Qn9EA&gid=9 instead of the User Hours (on the right-hand side of that same page), which is what we have consolidated to use as a single measure for simplicity and accuracy. Carrying two separate sets of percentags for the counts vs. hours has been confusing for many people.
So the change from April to June (we have not published July data yet, heh) is:
April
18-24 15.36%
25-34 34.80%
35-45 28.42%
June
18-24 15.42%
25-34 34.76%
35-45 28.31%
which is not very statistically significant.
I hope this clarifies, thanks for noticing. If anyone has any questions about this or any of our other public metrics, please IM me directly inworld and/or come to my Office Hours this Friday at 10 AM in Beaumont. See you then!
July 8th, 2008 at 2:32 PM
thats a lot of bots !
July 8th, 2008 at 2:33 PM
It’s easy to make numbers lie…
When I look at those graphs, I simply see that the growth of SL is reaching a plateau: if you exclude the sqm virtual space graph (for which the growth in last quarter is simply the result of the huge drop in islands price), you can notice that they are all looking like the left half of a gaussian curve and that we are now at the plateau level.
One, WAY more relevant number that you took great care not to make a graph for, is the number of active users (reflected by the “Logged in last 60 days” number on the login screen of the viewer): this number has been stable and always around 1.200.000 “residents” (actually avatars, i.e. alts are included in those logins as well) for months, while it used to grow fast in the past.
This simply means that SL’s growth came to a stop, and that the number of new “residents” (or are their just new alts ?… The fact that you can now create alts for free certainly encouraged residents to create more of them) is barely compensating the loss of users who are leaving SL.
I see this stop of SL’s growth as the direct result of three facts (classed by importance):
1.- the totally autistic behaviour of LL regarding its users’ feedback (for example I fear that despite all the negative feedback already received by LL from its merchants, the search engine will keep degrading as it moves more and more to the web-based engine: something which already halved my revenues as a SL merchant when the “All” tab was converted to the new web-like one).
2.- the poor level of stability and reliability of the grid (and I am not only speaking about the outages, but also about all the transaction problems when we reach 60-65k concurrent users online, as well as the horrible lack of reliability in the groups communications, groups which have been broken for almost one year and a half now, while they used to work just fine before).
3.- the emergence of some competition (even if for now, the alternative grids are still in a very basic and even pre-alpha stage when compared to SL’s).
I could risk a prediction: if nothing changes in LL’s way to deal with its users (and I could also add the very poor response to tickets) and grid stability/reliability, the pretty graphs will soon look like a full gaussian curve, meaning LL will experience the down slope.
Yet, there is _some_ hope… It looks like LL is starting to learn its lesson, and the example of the “Dazzle” viewer which will finally be delayed till it allows to revert to the classical skin so many users were afraid to loose and begged for, shows that, at last, the residents were listened to.
I really, truly hope LL will continue on this path and will stop imposing changes to the residents without regard for what they actually want.
Come on, LL, let SL become _again_ “Our World, Our Imagination”, instead of what you clumsily tried to make it in the last months (i.e. The Virtual World As LL Wants It).
Regards,
Henri.
July 8th, 2008 at 2:41 PM
@35
The different ways of measuring age bands was not at all confusing. This change is.
July 8th, 2008 at 3:03 PM
You’re playing an extremely dangerous game here, devaluing assets, increasing land mass with regions that are by official Linden blurb not designed to be used for the purposes they are being used for and mainland is not recovering at the rate at which it decreased.
Lots of semi filled islands and mainland parcels is likely to lead to the mother of all crashes.
However thanks for the heads up that islands are likely to devalue again, there’s a lead balloon around somewhere.
July 8th, 2008 at 3:12 PM
@25
I agree with JR Unknown. By failing to implement a rational land management strategy, LL is sacrificing existing residents/customers for new ones. At best, it gives the appearance of incompetence; at worst, it smacks of a pyramid scheme.
The island pricing model could have been handled professionally by compensating existing owners with a ‘tier holiday’ of, say, three months (or, at the very least, one month) as a gesture of goodwill to secure resident (investor) loyalty. Dismissing resident complaints with the suggestion that they complain regardless of increases or decreases in land pricing shows that LL has not grasped the strategic business concepts necessary to survive in a rapidly evolving industry within a global market.
July 8th, 2008 at 3:16 PM
In the interest of ’starting out small’, I purchased one of two small islands on a private estate a few months ago before taking the plunge into sim ownership - how ironic that Linden Labs Q2 announcement arrives the very same day that I was informed that the sim I’m living on (along with the other 2 sims the estate owner holds) is closing… simply with the explanation that Linden Labs refuses to address land issues. Basically, my estate owner is cutting his loses and is ‘leaving town’.
Unfortunately, I also have a friend who recently purchased a private island and an openspace 2 months ago who is comtemplating the closing of those sims also.
Here’s your new trend, Linden Labs. =/
July 8th, 2008 at 3:19 PM
well congratulations on a strategy that means after a year of successful land sales i can no longer sell any land at a sensible price anymore, enjoy the growth whilst you can linden, its all going to go pop!
July 8th, 2008 at 3:31 PM
Lowering up front costs wont save LL in the long run. Unless tier is made more affordable the economy is going to force many current landowners to bail. Its hard to justify making a car payment to a game when energy, food and everything else is rising at exponential rates
July 8th, 2008 at 3:35 PM
[...] Lab announced its economic statistics today with bold, beautiful bar graphs. Among the [...]
July 8th, 2008 at 3:37 PM
my land is doing well, thank you Linden for the opportunity
July 8th, 2008 at 3:39 PM
I, for one, am happy for all of us as, well as LL. This expansion report is strong positive news to me.
Of course, I’m not surprised to see most of the comments posted here on the negative side. I read comments on many SL Blog posts and I have the impression that the more or less the same tiny minority of vehement naysayers and negativists can be found blasting their boat whistles at LL on any topic.
I’ve been in-world for 20 months and own some land on which I have placed multiple large-scale operations. During that time, I have seen ups and downs, good happenings and bad occurrences. I remember the overload of exhibitionists and griefers in 2006 and 2007, the worst lag of all time at that LL Valentines Day bash in 2007, the maddening outages in April 2008. There was a time more than a year ago when it seemed SL was crashing out from under me all the time.
But then I also remember when LL recognized the problem, admitted it, and set about fixing it. Truthfully, omitting this past April, I can’t remember the last time SL malfunctioned around me.
I’ve never been more excited in my life. I’m having a lot of fun and hopefully helping others experience the future. I’m pretty sure I contributed mightily this year to that new peak in resident user hours.
However, I am continually amazed to hear the string of gripes over SL server and client performance. I haven’t lost anything from my inventory in an age. Almost never. It’s holding nicely at about 27,000 objects. I’m involved in lots of transactions and have found few failures beyond operator failure on the part of ill-advised or inexperienced avatars. Weak personal computers account for many miscarriages that come to be blamed on LL servers.
Somebody wondered about Linden goals and objectives. I see clues all over this expansion report about the direction in which LL is headed. The Lab is a business, same as the perpetual gripers claim to be. Here’s a quote that I think explains it, “Because land represents nearly 8x more revenue to us than premium accounts, our focus has been on the launching of new land products rather than on enhancing the premium subscription.”
As for the griping business people, some others must be happy. “The number of ‘profitable’ in-world businesses grew by 9%. Taking advantage of the growth in the economy, the number of in-world businesses with Positive Monthly Linden Flow, a measure of profitability, grew to 59,000 in June. ”
I wonder just how much impact the premium subscriber stipend actually has on those landowners who are concierge members? Surely those residents who own and operate businesses of any size at all on their own land must be concierge members. If you are paying US$125, US$500 or even more every month in tier, how much impact does receiving a stipend of L$300-L$500 have on you? While it once may have been a big consideration in the era of First Land, I don’t think the premium subscriber stipend is a factor in this discussion.
Some business adages I have collected over the years in RL: Small business owners always complain about the state of their businesses. They never make as much money as they would like. Things never are going to get better. The sky is falling.
Some newspaper adages: People with a gripe write letters to the editor. They tend to be a small noisy minority of everyone involved with whatever the subject is. The vast majority of satisfied people never write.
Have you noticed that the exhibitionists and griefers are less evident now? Doesn’t it seem that lag is greatly reduced except where people overstuff a sim or try to get by with insufficient computer power? Did you see that after April’s downtime, uptime improved dramatically in May and June? Almost 12 percent of our active residents are those people running the 59,000 profitable businesses? I think there’s a lot to be happy about nowadays.
–Stone Semyorka
July 8th, 2008 at 3:43 PM
“Because land represents nearly 8x more revenue to us than premium accounts, our focus has been on the launching of new land products rather than on enhancing the premium subscription.”
In which case get rid of premium accounts and let everyone own land.
July 8th, 2008 at 3:58 PM
I just see like others see ….. as long if ya see the facts and dont look at the figures (just being objective realistic);
*empty/abandonned private sims everywhere
*people giving away free land (cause landpricing to go down)
*some of the best sl creators leaving or closing there operations
*clear to see that a big amount of avatars are youngers <18
*frustration is taking control on the grid and not the creativity
anyhow, this trend will shut/kill LL slowly …. never forget that the success of a company is determinated by its customers, not the opposite !
therefore the figures are subjective in my eyes and only manipulated to tell the RL world that everything is ’sunshine’ … but it isnt.
At the other side the performance of SL is much better than it was before, this to give a positive note, but again LL if you really want to be professional then you will have to start supportingrespecting your fix customer base and restrategy your future operations with those segment in your plan… OR U WILL SINK WITH THE LL SHIP !
cosa
July 8th, 2008 at 4:01 PM
This is exactly the same size as Greater London!
July 8th, 2008 at 4:02 PM
Stone. for Linden Lab everyone who earns 10 lindens and spends 9 on freebies runs a “profitable business” here. That´s what i call spin.
In fact the real in-world transactions, which indicate the real state of the in-world economy, dropped by almost 50 % within the span June 07 - December 07 and slowly recovered to 75 % by now.
It is not really “growth” when a declining number of premium account holders buy more land while land prices drop significantly.
SL is not really growing anymore, and if it ever will grow again in the future it will grow very slow. Hardware demands are way too high by now to guarantee fluent access and a fluent, enjoyable experience to more than 20 percent high end equipped among the 80-90,000 hardcore users who are willing to support the Lab by paying significant amounts of money and are creating the content (which is what attracts new customers and keeps old ones, not the buggy LL software and LL lag).
There is nothing really positive to read there, only that SL still exists and does not seem to decline as dramatically as some have prophecised. Which is great. But growth??? Spin.
July 8th, 2008 at 4:05 PM
Thanks Zee for these stats and for being so forthright and useful in your responses to some of the questions. The bot issue of course is on a lot of minds. I’d try to make office hours as I’m curious about a few things, but can’t this week. In any case, I’ll check the transcripts and hope you have some insight into the following:
- Would a bot be a successful in world business? If it only receives Lindens but doesn’t outlay, then I assume it’s a “profitable” business?
- Does Second Life have access to any data, anecdotal or otherwise, indicating whether there has been a shift in the economy outside SL? I imagine things like purchases on onRez etc. are in a sense covered by the number of Lindens purchased, but any sense or plan to canvas or poll other businesses who accept things like PayPal for land rental costs?
- Regarding premium accounts, I’m under the impression that many people rent land. Is there any way of gauging whether land ownership has ceased to be an incentive to upgrading to a premium account when there are other ways to have a home? Do you poll non-premium accounts at all (I assume those surveys that pop up KNOW I’m a premium account, do different surveys pop up for non-premium members?)
- I agree on the need to parse the data between open and regular sims, although I understand your need for a modicum of confidentiality, (although if you could publish M’s salary that would be great!
) I’d be EXTREMELY curious to see over time whether buyers abandon open sims because of performance. I’m under the impression that there are a lot of open sim owners out there (anecdotal) who don’t understand why their sims lag.
- And finally, this is a pet request really more than anything, and the stats would be meaningless, but I’ve always been curious what the size of the “gift” economy might be - you know, give your best friend a shirt you made or whatever. I know there’s almost no way to meaningfully track it, but I’d love to know, even on a year to year basis, whether the number of objects exchanged where there was a 0L transaction have increased or decreased on an average basis per user.
Thanks Meta and Zee, and keep up the bold bright colors, they make me giddy.
July 8th, 2008 at 4:08 PM
About bots again and answering Mr Zee Linden:
dixit Mr Zee Linden: “[...]The corresponding metric that we think indicates consistent non-bot activity in Second Life are the user to user inworld transactions per hour and the LindeX volume per user hour.”
Actually Mr Zee, bots do a lot of “user to user” transactions:
- Bots buy lot of land
- Bots camp!! (many camping have few “real” campers, and many of their own bots (so they get back their money).
These two user to user activities show that this way of “counting bots” is not effective.
There are maybe other ways (in bots behavior) to consider for counting them…
July 8th, 2008 at 4:14 PM
Nice graphs. Makes digesting the data easier. Encouraging numbers. Thanks.
July 8th, 2008 at 4:21 PM
I have been a sl addict since 2005/2006 and i have seen the platform grow it has been a real eyeopener on this type of technolgy and the backbone of the virtual economy and making stuff is the main draw for me it was very easy to get a positive cashflow going usually a few hours work would pay the teir fees trading on the mainland market. But as the company is now expanding the platform ie land mass it is more like 2 weeks work to cover teir. Just a shame that the new users find it so hard now to get on the cashflow ladder.. Anyone remember even camping for 8ls per 2 mins lol before bots came along. Them where the days. Maybe bring back first land or even do first sims
July 8th, 2008 at 4:21 PM
@53 encouraging for who exactly ?
LETS SEE SOME POSITIVE RETURN FOR CUSTOMERS IF SL IS DOING THEAT WELL !!!!
July 8th, 2008 at 4:23 PM
Stone - Halleluia! Finally someone is singing my tune!
Stone wrote, “People with a gripe write letters to the editor. They tend to be a small noisy minority of everyone involved with whatever the subject is. The vast majority of satisfied people never write.”
That’s why I stick up for LL and SL when I can.
Cosa wrote, “clear to see that a big amount of avatars are youngers <18″
Cosa, I think you may be confusing _avatars_ with _residents_. An avatar represents the resident, it is not the residen him- or herself. You may see lots of child avatars running around, but that doesn’t mean the residents are children. Am I a dragon when my avatar is a dragon? No - I remain a human being. The residentss inside the child avatar are adults unless you encounter them on the Teen grid. And then I have to ask what you are doing there?
July 8th, 2008 at 4:27 PM
Fawning to lindens gets no one anywhere. Im a consumer I want more for my cash. Im english but I thought that sort of materialistic way of thinking was the accepted american way. Lindens want more…they wouldnt keep selling more and more and more land. So why shouldnt customers expect more for their money too ?
Im amazed there aren’t more crying out for more.
Everywhere I go the so called ’silent majority’ are complaining about missing inventory items and lag.
July 8th, 2008 at 4:33 PM
This is all to interesting. As a land owner I cant give my land away, The openspace sims are selling lots for a buck. their monthly teir charge is the same as LL. So what is the point of being a full member aside from being stuck with a bunch of land you hope to sell. Its A sad day when you spend 200k for land and cant even sell it for 50k. But the reports show land sales improving thats a fibb.
I hope LL sees the wrighting on the wall because Open source sims are taking off. I know of one grid that is like SL was +/- a year ago and they already have 20k plus members, you dont need to be a full member to buy a sim and there sim prices are so low its crazy. Yes they still have groth to do but then again SL is constantly doing server upgrades etc so whats the diference. I know for me once my land is sold, if i just dont abandon it and cut my losses. My full membership is cancelled why should a person keep paying LL for a membership when its not really needed to own land in sl when island land is almost free to purchase and the monthly teir is the same. Personally id rather give away my $ to someone else and hope they dont screw me then throw it to LL and get meanial support when its needed.
July 8th, 2008 at 4:42 PM
Land mass might have grown, but that accounts to nothing. Counthing ‘converts’ in here is close to cheating the numbers.
4 voids = 1 server
and a void is a whole less of prims and possibilities then a normal island
so it’s artificially boosting the numbers, and the 44% growth is a - nicely illustrated by the way, luv the graphs - scam
July 8th, 2008 at 4:49 PM
I ‘own’ a small amount of land, and would be more than willing to pay upfront fees if the tier amounts were not so large. I would much rather have a decrease in recurring costs than upfront costs. By dropping the price of land $600 Linden recovers it in only two months of fees.
Cut the monthly land fees and make owning and keeping land easier.
July 8th, 2008 at 4:55 PM
[...] Bots = 10-15% of active users In the blog comments on Zee’s recent metrics post, he just directly addressed bots and indicated LL’s revenues per user hour: [...]
July 8th, 2008 at 5:16 PM
The real problem is many think this is the only venue for complaining since the SL Forums were deprecated. Hasn’t worked for ages in that regard, but people keep complaining here. The Lindens whose shell like ears complaints need to get shouted into rarely peruse this blog. They *do*, however, read publications like SLInsider and a few others. Perhaps, if people really want to have the Lindens pay attention to a consistant and unified voice with a large number of users behind it, some kind soul will post places here we can go to and voice our opinions that we know the Lindens read.
It *is* refreshing seeing the many here on this particular blog entry rationally discussing what the metrics mean. Won’t solve or influence any efforts to get rid of bots, however.
July 8th, 2008 at 5:23 PM
Earm, 59,000 positive businesses? I understand smudging the truth and numbers a little but this is a total BS figure. over 30,000 of those are for transactions that are $10 or less, and for all you know it’s just people cashing out their stappend. It’s misleading at best. From your stats I would say on the conservative side you have a maximum of 4000 businesses in second life that could come close to being called successful under the PLMF stats.
Also, iterating that LL lowers the price of sims when the hardware cost lowers is also a flat out lie. Any time you raise or lower the price of sims there is always a scheme to boost your profits without regard for your users. If you were truly transparent you would show what your costs are and when and how they changed. I think we would both agree that one has nothing to do with the other in light of the actual numbers. I’m also confidant that those numbers and dates will never be disclosed publicly.
I do like SL and LL, but it is a bit out of sorts to see you being deceptive and expect anyone with half a brain to buy it. Kind of insulting actually.
July 8th, 2008 at 5:30 PM
Nice one fiddling the Key Metrics. You’ve cut out all the decreasing numbers and just left in the ones that have gone up: land due to disastrous decision making, and hours, because of bots.
Well, you do show Premiums dropping again, but where are all the active users counts by country? They have been dropping for months. It’s people that push growth, not the artificially massaged numbers you give. And I see you just print the consolidated exchange, not the LL and external exchanges, which showed Lindex losing market share.
June Key Metrics are a joke, Bring back the old numbers so we can properly compare the falling of SL. This is worse smoke and mirrors than a politician.
You can also see by the comments. Just one fan boy this time. And yes, people can’t be bothered to post because LL never listens to us anyway. Carry on destroying the world and fixating on worthless shinies.
Whilst you have almost doubled the land over the last year, active users have been static since May 2007, despite a doubling in registrations. That should tell you something: people want stability and less lag not more useless shinies.
The SL is becoming more and more unplayable by the day. Still, that’s what you get when you decided to totally ignore the Open Letter of more than a year ago. I see M. Linden has made absolutely zero difference.
Ah well, it was fun for a while at least. Now I’m looking forward to the growth of Twinity.
July 8th, 2008 at 5:33 PM
/me is not so pleased to announce that the cranky, shaky, just barely usable - but rapidly expanding - system just ate 20 no-copy dance animations.
Glad to hear things are going so well for LL. Best wishes for continued growth!
July 8th, 2008 at 5:36 PM
I have all the old Key Metrics, so I’ll work up some graphs on user numbers and stuff. They show a very different picture to your “growth” lol. How about average avatars per sim? That’s dropped to almost below 3 now, at peak hours. Not of course that you can get 80 avs on a sim now, more like 15 before it lags to death.
July 8th, 2008 at 5:38 PM
One thing that has bothered me for a very long time is a certain stat on the Economic Statistics page. The Total Customers Spending Money In-World metirc never really has changed much or grown much. What exactly is this stat based on. Is this number closer to the real number of unique, active resident accounts?
July 8th, 2008 at 5:42 PM
@ 26 Zee Linden: “Mainland: Recently, we posted that we stopped expanding the mainland to allow the market to absorb excess mainland inventory. It appears that the price has stabilized & has started to increase again. ”
So just where is LL getting the figures that say the price has stabilized and started to increase again? This statement doesn’t jibe with the published metrics which say as of yesterday that the Avg L$ Paid Per Square Meter was 2.5704 for July MTD compared to 2.8191 for the month of June (which incidently is well below the minimum auction price for a new sim of 3.14 (figures taken from the published metrics: http://secondlife.com/whatis/economy_stats.php)???
July 8th, 2008 at 5:44 PM
Well, I guess you guys got me at the gate: I was predicting the gambling ban would nearly cripple the Second Life economy for a while.
It made a clear dent in your figures, but it turned out that the effects weren’t as far reaching as I thought they would be. That and people seem to have quickly come up with alternatives to perpetuate cash flow.
Good Job guys.
July 8th, 2008 at 6:06 PM
[...] launch of a virtual world, on the heels of today’s posting of positive economic data for Second Life, may but a sudden twist to the future outlook for [...]
July 8th, 2008 at 6:31 PM
I wonder what the average sale price of 16 square meter parcels is.
July 8th, 2008 at 6:49 PM
1.5 Billion meters? 1 AU is about 150 M km - or 1.5 B m.
That means if you stretched out SL 1m wide it would reach from here to the Sun.
July 8th, 2008 at 6:50 PM
Ann, the thing is, that the new interop protocols are the core of truly breaking the concurrency ceiling. As part of making the SL grid one of many, the server architecture is being redesigned at the most fundamental level. Even the first pass at deploying a meta-grid should result in some increase in concurrency, perhaps a drastic increase, even without trying to change things specifically towards that end.
July 8th, 2008 at 7:04 PM
I’m not sure why people keep harping on the number of Premium users. LL clearly stated above they aren’t their key focus or profit center. LL doesn’t care about premiums, why does everyone else? There’s nothing in SL that requires being premium, so there is no incentive. (unless you count owning mainland, but thats a decentive.)
July 8th, 2008 at 7:15 PM
Non Secondlife Grids are not part of Secondlife. They do not have intellectual Property Rights nor do they have any economy. They are and will remain irrelevant to the success of Secondlife and are utterly irrelevant to the revenue stream of Linden Lab. I personally have never seen any company hand their revenue stream away like Linden Lab has placed it’s first priority on doing. I would really love to know what the plans for Secondlife are. Is there an exit strategy in place for Linden Lab to lay off it’s staff and shutter the existing Secondlife Grid? Or will Linden Lab hire the expertise required and invest in the architecture required to make Secondlife the preeminent place to be in the metaverse? By this I mean a totally revamped user interface with hot bars and ergonomic controls and the database run on Oracle with a 24*7 serious DBA staff. Isn’t going to get anywhere on the same trajectory it is on today. “Oh we can’t so let’s give it away.” Is that the strategic vision motto of Linden Lab? If so then I feel a small bit of empathy for the staff that bet on LL. I feel a lot of pity for all of us that bet on Secondlife just to watch it wallow in the quagmire of lack of appropriate architecture, and technology.
Twinity? Montana you can’t be serious. Twinity is an utter joke. Twinity is so bad it is funny.
July 8th, 2008 at 7:27 PM
Land speculation has its risks, virtual and real. The opening of the Oklahoma territories, the statehood of Texas, and the annexation of the West made land cheap and removed potential buyers from East Coast markets. Sl speculators may be glad there is no SL equivalent of the transcontinental railroad to further destabilize their investments. As in other more glamorous forms of gambling, the old adage that one should never risk more than they are prepared to lose applies to SL as well. HooRah to SL for making land cheaper, it may well be the strategy that leads to population increase, just as it did in the USA of old.
July 8th, 2008 at 8:08 PM
Virtual World expands 44%
Land Values Drop 50%
The virtual world expands, yeah that’s great if you are in the market of Selling Tier.
Land values are plummeting with no end in sight.
I understand the risks involved with free market investments and I am willing to except these risk.
I do however expect LL to be an active and responsive moderator in providing a degree of regulation in order to sustain the system.
Recovery and sale of abandoned lands by LL should be temporarily suspended.
Increase the cost to advertise land sales to help slow the land dump.
Increase the percentage given to group owned Land. What is it? Like 10%?
July 8th, 2008 at 8:23 PM
@77 The biggest risk in the land market is LL deciding to crash it to make profits for themselves. You make it sound as if it has anything to do with anything else. It doesn’t.