Featured News

I wanted to give you an update on several important new Customer and Community Support initiatives currently underway. We have recently added significant resources--of both people and technology--to improve your experience with both Customer Support and community interaction and communication.

On the Customer Support front, we have increased coverage to eliminate our backlog within the next 3 weeks and have already resolved 70% of the outstanding tickets. We are also continuing to work on changes to our Support processes and policies to improve communication about cases and speed up resolution time.

Additionally, we are actively investing in technologies that help you to quickly solve problems, find answers, share insights, and get help from the community.

Powerful New Community Platform To Launch Soon

On March 2nd, we will launch a new, and much improved, self-help community platform--comprised of Forums, Blogs, Answers, and our Knowledge Base. This new fully integrated platform helps you to more efficiently leverage the power and knowledge of the community. Among many architectural and usability improvements, the system also includes:

• Robust Self-Help Functionality: It will be easier and faster to find the answer to your question or the information that you’re looking for. For example, in Answers, when you begin to type a keyword, an intuitive category search will return common matching solution results. And, solutions accepted by the question author are automatically nominated for Linden editorial review and possible inclusion in the Knowledge Base.
• Unified Search: You can find the information that you’re looking for in one federated search field that returns organized results from relevant content in the Forums, Blogs, Answers, and the Knowledge Base.
• Single Sign On: Just as you can in the current system today, you will use your current Second Life username and password to log in to the new platform.
• Contribution-Based Roles: Based on your contributions to the platform, you will be able to earn new capabilities and roles in the community--from a brand new Resident to seasoned and experienced Helper.
• Easier for Experienced Residents to Share Their Wisdom: If you’re an avid Second Life Resident who wants to participate in the community, then it will be much easier for you to update existing articles; comment on published articles; and nominate, review, and include subject matter for the Knowledge Base.
• Industry-Standard Social Media Features: As you can in many other community platforms, with the click of the mouse, it will be easy to Twitter, Facebook, Digg, etc., interesting content that you want to share with your friends in the Social Web.

The Resident testers who were given a sneak peek into the system gave us great feedback and insightful reviews. Big thanks to everyone who participated!

Forums, Blogs, and Answers will be in Read-Only Mode Starting February 21st

We’re in the final roll out stages and wanted to give you notice on what to expect. At 12:01am PDT on February 21st, the Forums, Blogs, and Answers will switch to read-only mode until March 2nd, when we launch the new system. This means that everything housed within the http://blogs.secondlife.com site will still be available for you to read, but you cannot post comments--or contribute content--until March 2nd. Why go dark for over a week? Good question. We need the time to make sure that the data set, housed within our current system, is safely ported into the new platform and that everything is fully operational and ready to go for you on launch day.

Looking forward to sharing more on launch day and to your contributions to the new platform.

As customers, your satisfaction and input is critical to the success of Second Life. However, we know that it has sometimes been confusing and difficult to communicate with us and we can always do a better job of  listening. Toward that end, we’ve taken a hard look at all of our Resident-Linden communication paths and designed, or revamped, a series of new programs and tools to help us all have a more productive dialogue. Our goal is not only to listen and acknowledge your feedback and ideas, but also to work more collaboratively to help build a better Second Life experience for the common good.

In addition to rolling out new Community Participation Guidelines that apply across all communication paths, we also want to make very clear which ones are best to share your ideas about how to improve the experiences, content, and economy in Second Life, which ones are best to communicate with each other, and which ones to use when you want the latest news on Second Life or Linden Lab.

Also, please note that next month we will be rolling out a new community platform--an integrated system that will include SL Blogs, SL Forums, SL Answers, and the Knowledge Base. We will be blogging about that in the coming weeks as we get closer to launch.

First, we would like to explain what we are trying to achieve and how we propose to do it.

NEW COMMUNITY PARTICIPATION GUIDELINES SET THE STAGE FOR CONSTRUCTIVE DIALOGUE

We've updated our guidelines about community participation and they're largely the same, just clarified and streamlined for easy reference. The purpose of these new guidelines is to keep the conversations  constructive, courteous, respectful, and in the spirit of collaboration so that we can have more thoughtful and effective discussions. The new Community Participation Guidelines outline the ground rules, in addition to our Terms of Service,  for all Resident and Linden communications on the blogs, forums, bug  tracker (JIRA), SL Answers, User Groups, and the Knowledge Base.

PARTICIPATE IN USER GROUPS AND JIRA

Office Hours Transition into Focused User Groups: The best part about the Office Hours program was direct Linden-Resident communications, but it was often a challenge to find the best Office Hours (or Linden) to give your feedback to. And, the conversations were sometimes not as focused or productive as they could have been. For us, we struggled with the unstructured nature of Office Hours. They were not effective enough in getting the right pieces of feedback to the right people who could act upon it--the Product Managers and teams--or creating a broader, representative sample of what most Residents thought about the topic.

Today, we are announcing a new approach--User Groups. User Groups are product or community focused and each one is led by the Linden responsible for the specific topic. The User Group program is about opening up a more representative and focused dialogue about user needs. Most User Groups are public and may include any or all of the following: inworld meetings, JIRA sections, a Twitter feed, an SL Forum, and/or an SL email list. It’s up to the User Group leader and the core Resident team to determine how they best communicate with one another. The discussions should be open, direct, and be more forward-looking and focus more on how we can improve your user experience.

A complete list of User Groups, and their Linden owners, is available here on the Second Life wiki and there’s also a Google Calendar where you can see all User Group meetings and add them to your calendar. Many User Groups will have several Linden team members participating, in addition to the User Group leader. All User Group leaders will be publicly posting agendas and notes from each meeting that may include an audio recording or a text chat log. So, whether you are a participant in a specific User Group or not, it will be easy to check in and see what’s going on in any area that you’re interested in.

Submit Bug Reports in JIRA: For those that aren’t familiar with JIRA, it is our public bug tracking system and it’s the best place to go to let us know about bugs or suggest new features that are proposed in User Group meetings or outside of those sessions.

Our development teams actively review the bugs that you submit in JIRA and do one of several things: place the item onto a development team backlog to address, ask the submitter to contact Support or provide more information if the developer cannot reproduce the bug, or close it and explain why we aren’t going to tackle this particular bug or idea.

It’s also important to note that we are going to remove the “voting” feature in JIRA in one month. Today, we do not use voting to triage or to make product decisions and the last thing that we want to do is set false expectations. So, when you are interested in what action we will take on a particular JIRA, use the JIRA “Watch” feature so that you will be  immediately updated in email when there are new comments on that particular JIRA issue. We will continue to use the number of Watchers as an indication of the level of interest.

PLACES TO CONNECT WITH ONE ANOTHER

Find Solutions SL Answers: If you haven’t explored SL Answers yet, then you definitely should try it. Second Life Answers is the best place to ask questions and get answers from other  knowledgeable Second Life Residents. It’s a very helpful tool when you  need to have your questions answered quickly. And, if you’re a long time  Resident, you should jump in and help answer questions and help out  your noobie friends.

Participate in SL Forums: SL Forums are a great place to connect with other Residents on specific topics. As I mentioned earlier, we’re going to roll out a new community platform for Forums that is easier to use and more organized. Look for that next month when User Groups will be adding specific areas for lively discussions with our Product Managers on topics relevant to each User Group.

Join the SL Email Lists: Late last year, we cleaned up the old SL email lists and created a few new ones to accommodate discussions happening among smaller communities that may not have any other way of connecting--ranging from the open source community to the educators in Second Life. The lists are a great resource to use when you want to tap into the collective wisdom of a group. Take a look at the current SL email lists that are available and join the ones that most interest you. If you would like to suggest a new list, then just email me (address below) or drop me a note card (SL: Amanda Linden).

GET THE LATEST SECOND LIFE AND LINDEN LAB NEWS

Check out the SL Blogs to Get Second Life and Linden Lab News: The SL Blogs are always the best place to go for news and information about Second Life. As is true with Forums, we’ll be rolling out a new Blog structure next month--and be blogging about it shortly. So, stay tuned!

Follow Us on Twitter: Twitter is a great way to get the latest and greatest information about Linden Lab and Second Life. There are many lists to choose from and we encourage you to follow us and join the conversation. The primary Twitter account to follow, if you want immediate notices of blog posts and other news, is @SecondLife. For a complete list of official Linden Lab/Second Life Twitter feeds, click here. This page will constantly be updated, so check back often. We also actively follow these hashtags: #sl, #secondlife, #slviewer2, #slmarketplace and suggest that you do, too.

Like Us on Facebook: Facebook is the best place to find out about cool things going on in Second Life, share ideas, and get the inside scoop on inworld events, contests, machinima releases, PR activities, fun discussions, and more. Come join over 111,000 people who have “Liked” our Second Life Facebook page.

Of course, these communication programs are evolving, and we look forward to your feedback on these changes and other suggestions on how we can continue to improve our community communication programs. Feel free to leave comments here or email me at amanda at lindenlab dot com.

2010 ended on a positive note for the Second Life economy, with several key measures growing while others remained stable as compared to Q3 numbers.

Total money supply, LindeX volume, and web merchandise sales volume were all up between 6% and 8%, indicating growth in economic activity. Also, the L$ rebounded strongly from Q3, appreciating 3.7% quarter to quarter.

When comparing 2009 to 2010 measures, average monthly repeat log-ins were up 8%, average monthly economic participants were up 4.3%, annual web merchandise sales volume was up 104%, and the world size grew by 5.8%.

For a definition of the metrics in this post, please see this wiki page. Click on each image below to see a larger version.

AVERAGE MONTHLY REPEAT LOGINS

Repeat logins gained 1% this quarter. Average monthly repeat logins in 2010 rose 8% over the 2009 average.

USER HOURS

User hours were flat this quarter, appearing to stabilize after a gradual decline in the prior four quarters. Total user hours in 2010 fell 10%  from 2009.

AVERAGE MONTHLY ECONOMIC PARTICIPANTS

Economic participants were flat in Q4, remaining in the historical five-quarter range. Year over year, the 2010 average of monthly economic participants was up 4% from 2009’s average.

AVERAGE EXCHANGE RATE

Increasing demand and falling supply on the LindeX caused a 3.7% appreciation in the value of the L$ in Q4.* The average L$ value in 2010 was within 1% of the average value in 2009.

*Note that the exchange rate is expressed in L$/USD, meaning larger numbers represent a lower L$ value and smaller numbers represent a higher L$ value. The average rate is calculated by dividing the total L$ exchanged through the LindeX by the total US$ exchanged through the LindeX in the quarter.

L$ SUPPLY

Money supply grew significantly in Q4 to US$28.4m worth of L$, 8% over Q3. The year end money supply in 2010 was 11.9% over 2009.

LINDEX VOLUME

Mirroring money supply growth, volume on the LindeX grew 8% in Q4, nearing the top end of the historical five-quarter range. Total LindeX volume in 2010 was nearly US$119m, 2.8% over 2009. This means that an additional US$4m traded hands on the LindeX in 2010.

WEB MERCHANDISE SALES VOLUME

Driven by greater merchant adoption and improved shopping features, web merchandise sales volume grew 5.8% in Q4. 2010 web sales volume was up 104% relative to 2009.

WORLD SIZE

World size remained flat in Q4; 2010 year end world size was up 5.8% relative to 2009. Today, Second Life's virtual land mass would be roughly twice the size of Hong Kong.

Hello, everyone!

Firstly, thank you all for your kind words of welcome. It has been an unexpected delight to receive goodwill messages from so many Residents. I also appreciate the many thoughtful comments on BK Linden’s blog post announcing my appointment. I have read them and will be addressing some of your questions as soon as I’m a bit more settled in.

One of my highest priorities, over the last few weeks, was spending as much time as possible exploring inworld (with an alt and now Rodvik Linden) to better understand the product experience, your needs, and the culture of Second Life. I have discovered so much. I am amazed on a daily basis by what you have created. Over the holidays, I enjoyed many winter landscapes and seasonal activities. And, more recently, I have been playing around with vehicles and animals.

On the creation front, I am slowly learning how to build by playing around with the land tool and the building environment. I love trees and plants, so I probably overdid it a bit there

Next, I wanted to see how the scripting system worked. So, I made myself a “mail post” that emailed me. I was very impressed by how easy it was to get up and running.

Having no shelter on my island seemed a bit odd. So, I built myself a shack. It doesn't look like much, but it’s home.

Finally, I like the water so I built myself a simple raft to cruise around in. (OK, it’s very simple. But it works!)

Getting immersed in Second Life is the fun part of the job and I can see why you love the world that you’ve created.

I’m in the process of getting up to speed and working with the team to finalize our plans for 2011. I hope to start sharing more in coming weeks.

Until then, thank you again for such a warm welcome and please follow me on Twitter @rodvik. I look forward to serving you--our customers--in the times ahead.

Rod Humble / Rodvik Linden

I’m happy to announce some very exciting news today: Rod Humble is Linden Lab’s new CEO. Our press release is here. You’ll hear from Rod himself after he starts in mid-January, but in the meantime, we wanted to share a brief introduction.

I’m delighted to announce that today we have released Viewer 2.3 as the main Second Life Viewer and the default download for new Residents. This release includes the full launch of Display Names allowing greater self-expression, improved Event Scheduling, Viewer Hints, and many additional performance and usability enhancements. For more information on the new features, see our Viewer 2.3 Beta blog post.

This is just a few short weeks from when the Viewer 2.3 Beta was made available; a big thanks to those Residents that downloaded the beta and provided feedback.

Download the Viewer 2.3 Release today, try it out, and Twitter your thoughts using the #slviewer2 hashtag.And, if want to learn more about Display Names, then there are plenty of places to find information including some excellent videos by Torley. Check out the helpful links below.

Please note: If you are using an older version of the Viewer (including most 3rd party Viewers) that still has three login fields (first name, last name and password), please read this page for guidance on how Display Names affects logging in.

As we explore ways to make the Second Life experience faster, easier, and more fun, we are testing a number of approaches to bring new users closer to the richness of our virtual world. Yesterday, we quietly launched a beta test of a new technology that opens up Second Life to new users like never before: Second Life on the Web! The SL Web Viewer allows new users to become Second Life “guests” through the Web and enjoy basic SL functionality while exploring exciting destinations in Second Life -- all without downloading a Viewer.

We need your help to test the SL Web Viewer!

Just click http://interest.secondlife.com/beta to check it out. There is a 45-second video that will run while the system loads and then you’ll either be offered an “Explore Now” button -- which means that you have successfully qualified -- or a “Join Now” button -- which means that you do not qualify for the test at this time*.  If you qualify, you’ll be asked to share your email address to create a temporary guest account to use the SL Web Viewer.

We’ll be running tests like this from time to time, and we may ultimately choose to further pursue some or none of these approaches, depending on what we learn from our testing, but we’re very excited to make SL an easier experience for guests and look forward to hearing what you think.

*Note: We’re in the early stages of testing this technology, and not everyone who navigates to the link will be able to access the SL Web Viewer.

The Second Life Discussion Guidelines have moved here.

^ As a friendly reminder, please read the guidelines before commenting on the blogs or posting in the forums so you can be awesome!

This change was done by Torley Linden as part of making help easier to find... because the previous version couldn't be read by non-logged-in Residents and contained numerous formatting glitches and old references (for example, "Xstreet" instead of "Marketplace"). The meat and spirit of the Discussion Guidelines' content remains the same, and been cleaned up on the wiki help pages, where future versions can be updated easier. Please let Torley know if there are further errors to correct.

The Second Life economy continues to be steady, with nearly all key measures staying within a narrow range of just a few percentage points up or down over the last year. The largest changes compared to last year's Q3 were an increase of 7.2% in World Size, a decline of 11% in User Hours, and a 115% increase in Web Merchandise Sales Volume.

Over the last year, the number of people participating in the economy has also been consistent, ranging from 480,000 to 496,000 (currently 486,000), as has L$ Supply, which has ranged from US$25.4 million to US$26.2 million, and was at a 12-month high in Q3.

For a definition of the metrics in this post, please see this wiki page. Click on each image below to see a larger version.

AVERAGE MONTHLY REPEAT LOGINS

Average Monthly Repeat Logins fell 2.1% from Q2 but still rose 5.3% year over year.

USER HOURS

User Hours fell 3.7% from Q2 and 11.0% year over year. The most significant quarter-to-quarter loss of user hours was from the heaviest usage segment (accounts logging over 300 hours per month).

AVERAGE MONTHLY ECONOMIC PARTICIPANTS

Active economic participants fell 1.0% from Q2 and year over year.

AVERAGE EXCHANGE RATE

As expected from the fluctuations in June, the average exchange rate of L$ per US$ rose 1.7% from Q2, or 2.5% year over year. Note that a rise in the L$ exchange rate represents a drop in the value of the L$, as one US$ now buys more L$ than it did last quarter.

L$ SUPPLY

The equivalent US$ value of all Resident-held L$ grew 1.2% from Q2, or 6.1% year over year. Although there may have been fewer economically active accounts in Q3, this suggests the L$ in those accounts did not exit Second Life.

LINDEX VOLUME

LindeX volume in Q3 fell 3.8% from Q2 and 2.8% from Q3 2009. With fewer economic participants, there was less need to replenish L$ balances from the LindeX.

WEB MERCHANDISE SALES VOLUME

Total sales volume on both Xstreet SL and the new SL Marketplace rose 8.5% from Q2 and grew 115.2% year over year. Note that the SL Marketplace was only in beta during Q3 and makes up less than 10% of total Q3 Web volume.

WORLD SIZE

Total world size fell 1.4% from Q2 and grew 7.2% year over year.

After about four months as interim CEO, working closely with Bob Komin, the management team, and the board, we've decided we are ready to start the search for a new CEO. I'll be leaving day-to-day management of the company and continuing in my role on the board, including helping in the search to find a great CEO. I will also be continuing my work with my new company, LoveMachine. Bob will lead Linden Lab while we conduct the search. It's been an intense few months of transition, and we all feel like we are in a better place now, with a clearer sense of direction and more focus, and are ready to bring someone new into the mix as a leader.

Today, is a bittersweet day. As planned, we have taken down the Avatars United site, as outlined in last week’s blog post. The Avatars United website now points to the main Second Life homepage.

Although many are sad to see Avatars United go, we are very excited that soon we'll be sharing more of our thinking as we explore how to integrate social networking capabilities, powered by Avatars United technology, directly into the Second Life experience. We want to make it even faster, easier, and more fun to find friends, build vibrant communities, and share the richness of Second Life.

For Avatars United members, we hope that you’ve taken advantage of the past week to save any pieces of content that you wanted to keep. And, if you have an account balance, then yesterday you should have received an email regarding your AU Coin refund. Expect another email later this week with more specifics on your individual account.

As I stated before, a big thanks to all Avatars United members and we encourage you to reestablish your connection with friends--and find new ones--in Second Life. See you there soon!

Following on from my previous post, I am delighted to announce that we will begin the Mesh Open Beta on Wednesday, October 13th, allowing all Residents to experiment with our new mesh upload fuctionality. We’re extremely excited about this project; here is what to expect from the beta program:

On October 13th, you will find a new “Mesh Project Viewer” on the Downloads page, which will be available for any Resident to download. This Viewer cannot connect you to the main grid; instead, it will take you to a development grid (called Aditi) where mesh has been enabled. After you download the Mesh Project Viewer and log in to Aditi, you can then experiment with mesh without impacting your regular SL account. The mesh features should be fully functional, so you’ll be able to upload mesh files, define their physical shape, apply them to objects, and link multiple mesh objects together.

Some aspects of mesh are complex, but don’t worry -- we will also provide documentation explaining how to get started with mesh, along with some simple examples to get you started.

The main purpose of the beta is to have as many folks trying out the technology as we can, so that we can improve the quality and iron out any issues early. I’ll blog again on our progress shortly and will also let you know how best to file bugs or give us other feedback. We are still actively working on the user interface for mesh, so you should expect this to look a little rough for a while as we polish it up and make changes based on your feedback.

So, if you’re someone who is comfortable trying out beta software, and you’re interested in creating mesh objects in Second Life -- a whole new level of creativity -- please do put October 13th in your diary!  The more involved you get, the better it will be!

It has been several weeks since we announced that Teen Second Life, our Second Life grid for 13- to 17-year-olds, will be closing at the end of this year, and that we would be admitting 16- and 17-year-olds to the main grid. Today, we are excited to tell you that we will be able to continue serving all of the educational and not-for-profit communities of the Teen Grid, including those that serve 13- to 15-year-olds, without an interruption in service.

Since our announcement, we’ve been speaking with many people from the educational and not-for-profit communities in Teen Second Life to better  understand their needs and determine what measures would be necessary to create a safe, secure, and collaborative environment for their students and faculty. I’m happy to say that we are able to meet these needs, and allow 13- to 15-year-olds access to limited locations on the main grid, with appropriate controls for administrators. We will implement these controls and transfer these rich and exciting projects from Teen Second Life before the end of this year.

The 13- to 15-year-old students affiliated with these organizations will be unable to visit any regions except those of their hosting organization, and those accounts will not have the ability to search the Grid or to purchase items from the Marketplace. Unlike on Teen Second Life, adults that work with these students will now be a part of the broader Second Life experience, allowing them to bring rich educational content to their students. The ability to invite organization-approved guest speakers and other approved members of the community to safely interact these students will further enhance their learning experience. For more details, see the Teen Second Life transition wiki page.

We are happy to provide this support for the educational community in Second Life, and we look forward to the community continuing to create  innovative and exciting projects!

In January of this year, Linden Lab purchased Avatars United as part of our social strategy and a larger ambition to integrate powerful social networking capabilities into the Second Life experience -- to make it even faster, easier, and more fun to find friends, build vibrant communities, and share the richness of Second Life with fellow Residents inworld and friends outside of Second Life. We purchased Avatars United for its underlying social technology -- the ability to create social networks, communities and groups.

During Philip’s keynote at the 2010 SLCC, we committed to bringing Mesh import to Second Life. This functionality would allow content created in the mainstream 3D creation tools, such as Maya or Blender, to be imported directly into Second Life, in much the same way that animations and textures can be uploaded today. In this case, we would provide support for the Collada file format. We see this as an important step to empower content creators to make the inworld experience an even richer and more creative one than it is today.

Find Out What Our Mesh Import Beta Testers Think

As you know, we have been working on Mesh import for some time and have had an awesome group of Resident beta testers helping us to iron out the kinks. Those testers have been under NDA, but today we will be lifting that NDA so that those folks in the closed beta can talk publicly about their experiences with Mesh in Second Life. This is in line with our desire to be ever more open about what we are working on. Look for other videos, blog posts, and Tweets (#slviewer2) shortly.

In fact, I encourage you to view the Second Life Youtube channel where we already have six videos showcasing Mesh Import technology, contributed by beta testers Draxtor Depres, Timmi Allen, and Matrice Laville.

And, big thanks to all of our Mesh Import beta testers. Your dedication, creativity, feedback, encouragement, and patience has been invaluable. We couldn’t have gotten here without you.

Open Beta Coming Soon
We’re also getting ready to move from the current closed beta, to an open beta so that any Resident interested in helping us to test the Mesh toolset, or just curious about the technology, can get involved. Mesh Import has some incredibly exciting implications for inworld content creators, so we’re very keen to get as much feedback as we can; and of course, the more people that use it, the better the feature will be when we go live gridwide.

The plan is to blog again in two weeks, when we’ll announce when the open beta will be available and talk more about the development process and the remaining work to be done. As you’re starting to see on other projects, there will be a specific Project Viewer for the open beta for Mesh Import that will take Residents to a development grid where Mesh is enabled. The open beta will be a ‘technology demo’ rather than being a complete product -- so you should expect that the user interface will change significantly as we receive your feedback and continue to work on it. The technology for Mesh Import is complex, so making sure that it is not only easy to use, but also a powerful tool for content creators, is part of the challenge. We’re looking forward to getting your help.

The L$/US$ exchange rate briefly experienced fluctuations for approximately one week in June. At the time, we interpreted this as being due to a number of factors, including uncertainty over our recent reorganization. Further research has shown  this was also caused by the effect of merging Residents’ inworld and XStreet SL account balances in late March. Previously, Residents had two separate balances: one for inworld transactions, and one for XStreet SL transactions. Merging those balances provided a more convenient, efficient way for Residents to maintain and spend their L$ balance. Residents are no longer keeping a higher than historical average L$ balance across their two accounts and this process of reducing their  total balances caused new L$ purchases to temporarily be lower while  these “extra” L$ were used and/or added to the selling volume if the L$ were taken out of the economy. At this time, total Resident L$ balances have stabilized and are no longer falling.

Despite this temporary uncertainty and related market impact that caused sell volumes to briefly spike beyond purchase demand during one week, trading activity and the exchange rate have since returned to near historical levels.

The L$ exchange rate is a floating rate that can change based on supply and demand. Although Linden Lab employs a variety of methods including  sinks, sources, and selling L$ from time to time, and tries to maintain a relatively stable money supply and exchange rate, we are committed to allowing the economy to fluctuate based on its own market forces. As in the real-world economy, these market forces can sometimes result in changes that can affect businesses positively or negatively in Second Life.

For more information on the Second Life economy in the second quarter, read today’s blog post.

The Second Life economy remained stable in the second quarter of 2010, despite one-time events that affected a number of metrics. The most notable economic event of the second quarter was a temporary decrease in the exchange rate of the L$ vs. the US dollar in mid-June that has since returned to typical levels. Our research in the weeks since this occurred indicates this change was due in large part to our merge of Residents’ inworld and XStreetSL L$ balances.This had the temporary effect of reducing L$ purchase volume as Residents lowered the total amount of L$’s they were holding because they now had one combined account.  Previously, Residents held a higher combined L$ balance in two separate accounts and purchased L$’s more frequently when they were keeping a minimum balance in each.  You can read more details in our quarterly economic spotlight post.

Changes in Reporting

From time to time we will change our reporting in order to provide the most relevant and accurate summary information for the use of merchants, landowners, content creators, and other participants in the Second Life economy. Our goal is to provide those who participate in the economy and run inworld businesses with the data they need to make informed business decisions.  We are making a change from the recent past by reducing the relatively large set of metrics we have provided--many where causality is complex or unclear--and we will instead provide a more focused data set with a briefer description about each quarter’s activity.  We believe the indicators below are the key items to focus on, and we are adding a page describing the content and methodology behind each figure.

In addition, we will be phasing out the data feeds at http://secondlife.com/statistics/economy-data.php. We’ll have more updates on this shortly, but because this data currently bears little relationship to the health or strength of the Second Life economy, we feel it’s appropriate to discontinue these feeds.

Resident-to-Resident Transactions

At least for the time being, one figure we will no longer publish in our historical charts is the Resident-to-Resident transaction data. As we’ve analyzed this data we believe that it is not as accurate a measure of the inworld economy as we would like. We are currently working to develop a more accurate metric with which to replace this number. For the near term, we will continue to publish a comparable Resident-to-Resident transaction figure for historical comparison. In Q2 2010, Resident-to-Resident transactions totalled approximately L$40 billion, or US$152 million.

RESIDENT USAGE INDICATORS

MONTHLY REPEAT LOGINS

Monthly Repeat Logins indicated improved retention and engagement over recent quarters:

• Q2 2010 averaged 805 thousand monthly repeat logins, a rise of 8.6 percent vs. the Q2 2009 average of 742 thousand.
• Levels are flat with Q1 2010.

USER HOURS

User Hours were slightly lower, at 108 million for the quarter.

• The Q2 2009 User Hours figure of 126 million includes substantial usage attributable to “bots” and other scripted agents. Bot policy changes took place in mid-Q2 2009, making it difficult to make accurate comparisons with the year-ago period.
• User Hours in Q1 2010 totaled 116 million.

MONTHLY ECONOMIC PARTICIPANTS

Monthly Economic Participants (those accounts that receive or distribute L$ in a given month) are the most active and engaged participants in Second Life and the economy. Economic participation in the second quarter, on average, was flat against the previous quarter, and rose against the same period a year ago.

LINDEN DOLLAR RATES AND RELATED METRICS

EXCHANGE RATE

The average Linden dollar exchange rate moved from approximately L$261 per US dollar at the beginning of the quarter, to just under L$269 per US$ at the end and fluctuated across a larger range for two weeks during June (see second chart below), as we noted at the time. Average exchange rates, however, remain largely unchanged. As noted above, our research indicates this change was due to our merge of Residents’ inworld and XStreet SL L$ balances and temporary market uncertainty immediately after the announcements of our restructuring and changes in senior management. Read more details in our quarterly economic spotlight post.

L$ SUPPLY

We are also improving and changing how we report the L$ Supply figure with this quarter’s post. Previously, this metric did not include individual XStreet SL account balances, and misclassified some administrative accounts as Resident accounts. For this quarter we have updated the calculation to include only Resident accounts, and have summed their balances across both XStreet SL and inworld. This number now more accurately represents the total purchasing power of all Residents in Second Life. Note that we have shown both calculation methods in the charts.

• L$ Supply in Q2 was US$25.9 million vs US$26.2 in Q1

LINDEX VOLUME

Historically, LindeX volume has been very stable, and the slight decline from Q1 is within past ranges. This metric is traditionally less volatile than many other indicators we report, and we expect this behavior to continue.    

• LindeX trading volume of US$29.4 million in Q2 2010 was up slightly against the year-ago Q2 volume of US$29.1 million, but off from Q1’s US$30.7 million

XSTREET SL MERCHANDISE SALES VOLUME

Q2 2010 saw 39% growth in sales over Q1 2010 and 124% growth over the same quarter a year earlier. The primary driver of this growth was the merging of users’ Xstreet SL and Second Life Linden dollar balances. This simplified the purchase process on Xstreet, producing an immediate jump in sales volume. In addition to the benefits of the balance merge, we continue to show healthy growth from the acquisition of new users paired with the development of new creative products from our merchants. Q2 continued the trend of setting record sales volume and this quarter in particular contained an important milestone, as Xstreet SL had it’s first month with over US$1 million worth of sales.

LAND

WORLD SIZE

World Size grew to 2,110 square kilometers at the end of Q2, from 2,070 at the end of the previous quarter, and 1,900 for the year-ago period. Private regions accounted for the largest portion of inworld land (44 percent), and private homesteads the next largest (36 percent). Mainland regions accounted for 19 percent of the total inworld land mass.

As of 10am PT Wednesday, September 8, the Emerald Viewer will be blocked from logging in to Second Life as a result of violations of our Policy on Third Party Viewers. Residents who have been using any version of the Emerald Viewer will need to use a different Viewer to access Second Life. You can download the official Second Life Viewer, developed by Linden Lab, here. Or you can learn more about alternative Viewers, developed by third parties, here. There are several new Viewers listed in the TPV Directory, so there are many alternatives available to you.

We take Residents’ privacy, safety, and security very seriously and will take action to enforce the policies that help protect it. As our CEO, Philip Rosedale, has blogged about, we recently removed the Emerald Viewer from our Third-Party Viewer Directory due to violations of our Policy on Third-Party Viewers.

Since then, we have been in communication with the Emerald development team and have requested several changes in order to remedy violations of our policy, including changes necessary to meet our privacy requirements, and to address GPL license violations. Unfortunately, the team was unable to comply within a stipulated time frame. As a result, we have decided to block logins from the Emerald Viewer in order to protect our Residents. All versions of the Emerald Viewer will be blocked from logging in to Second Life as of tomorrow at 10am. Please be aware that attempting to circumvent our blocking to access Second Life with a banned Viewer is a violation of the Policy on Third-Party Viewers and may result in the loss of one's account.

Linden Lab recently welcomed a new addition to its executive ranks: Kim Salzer, who became our Vice President of Marketing, at the beginning of August. Kim (known as Kim Linden inworld) joins us from Activision Blizzard, where she was Vice President of Global Brand Management for properties like Guitar Hero and Call of Duty 2, among others. Kim brings a deep background in gaming (including experience at Electronic Arts working on massively multiplayer online games and hit sports franchises), and in online learning, and we’re excited to have her as part of the team. As an introduction to Residents, I asked Kim to tell us a bit about herself in her own words:

Q: What’s the one thing you bring from the gaming world that will be most useful to you in your position at Linden Lab?

A: Working in gaming taught me a lot about just how creative and  passionate that audience can be, and I think the same is true for the  Residents of Second Life. And SL provides so many great tools to enhance  and bring out that creativity, I’m really looking forward to helping foster that as we move into the next phase of the platform’s growth. I  want to see if we can make the range of what’s possible in Second Life  even broader.

Q: What are your goals for your new position as VP Marketing at Linden Lab?

A:  What I really want to do here is help the Lab figure out what the “X  Factor” is going to be for Second Life. When I was working on games, I  always tried to choose a single idea to focus on and bring out, an X  Factor that helped people get into the game and helped them discover all  the rest of the possibilities there. If I can help bring that kind of  focus to Second Life, I’ll be happy about how I’m doing my job.

Q: What excites you most about working on a product like Second Life?

A: I’m excited about the prospect of helping to build a product that  really empowers people to express what they’re about, and that can make a real difference in their lives. I think we’ve only just started to see  what can be done here, and I can’t wait to see where we and our  Residents can take things from here.