Jump to content

Featured News

  • entries
    669
  • comments
    1,284
  • views
    228,787

Contributors to this blog

The Second Life Economy in Q4 2010

Sign in to follow this  
Nelson Linden

19,501 views

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.

average monthly repeat logins.jpg

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.

user hours.jpg

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 monthly economic participants.jpg

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.

average exchange rate.jpg

*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.

L$ supply.jpg

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.

Lindex volume.jpg

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.

web merchandise sales volume.jpg

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.

world size.jpg

Sign in to follow this  


0 Comments


Recommended Comments

Nelson, I don't think you do yourselves or anyone else favours by removing key figures that used to be transparently available in these tables on a daily basis on the website, and now are pulled.

And that's the number of "positive montly Linden flow" accounts, i.e. accounts that monthly had more Lindens than they spent. This number was tanking, and maybe that's why you wanted to stop showing it, but it's important because it tells us whether large and small businesses still find SL a place to operate.

I'm also asking again whether "economic participation" means "spent $1 or more" or what it means. It used to be reflected in those terms, i.e. whether or not a person had spent more than $1. Thus buying Lindens but not spending them, or getting a stipend on the premium account and not spending it would not count as "economic participation".

You also used to show these figures in terms of expenditure categories, like how many people spent $50 a month, how many spent $2000 or $50,000 a month. And that was also tremendously helpful for merchants to know, in terms of pricing and market size. But now you've hidden this, and needlessly.

Another thing I find confusing abouty your numbers is the question of concurrency. Repeat log-ins is something different. So what is concurrency and how has it ranged over the month?

You also seem to forget that some of us have been around a long time following this, and can compare the figures from past years or even just a few months ago. So a statement like "1 percent growth" in log-ins seems incomplete, when we know, from having seen this figure perched up in the upper right hand corner of our log on screens for years on end, that the figure of repeat log-ons was 1.5 or 1.6 million or more. So it dropped from 1.5 million to 795,000. Ouch. Why? If I had to hazard a guess, I'd say: Viewer 2.x. It's a commerce-killer, it undermines sharing, it hurts.

Share this comment


Link to comment

Thanks for the update. The real question: Is this game making a profit? If not why not....

Share this comment


Link to comment

Would like to see some stats about in world product sales to see if web based product sales are effecting in world sales. As web based sales rise, I'm expecting in world sales to drop. This should in turn effect the shop space rental model, which in turn should cause problems for private island owners who rely on renting out shopping space.  I am expecting world size to start dropping from here on as private islands start being abandoned due to high tier that can't be raised via old system of renting shop space.

Share this comment


Link to comment

I feel you are charging too much for your land and services and it will definitely kill Second Life now that there's open source alternatives that are almost as good and getting better daily.  If you drastically reduce the amount of money you're requesting for setup and monthly fees for land, I feel your bottom line will boom via economies of scale.  Good luck if you don't. 

Share this comment


Link to comment
I'm also asking again whether "economic participation" means "spent $1 or more" or what it means. It used to be reflected in those terms, i.e. whether or not a person had spent more than $1. Thus buying Lindens but not spending them, or getting a stipend on the premium account and not spending it would not count as "economic participation".

Nelson did say these were defined on the wiki page linked in his posting, and that page makes it pretty clear economic participants includes those getting a stipend, or anything else that will cause a non-zero transaction on your Transaction History.

That said, this just means the numbers are so clouded in unrelated counters being merged together that this stat is not useful to anyone.

And as you pointed out, with the other former stats that are now missing, I agree with Torben that it feels like a waste of time to read this one.

Share this comment


Link to comment

The web commerce is rising impressively. So far so good.

Inworld the picture is a whole different story.

Concurrency seems in decline for quite a while, even over the usually strong winter season (in the northern part of the world).

Viewer 2.0 still is a concern, and seems to not find much appreciation.

One bummer of it is still the "keep" and "block" options when people receive things.

Nowhere it is told that "block" would mute the sender forever and how to help this problem in case the person wants to buy or receive items from this sender again without knowing they blocked them. Alot of my customers click a vendor for a demo, and if it takes a bit longer they click a few times more and at some point they get 2 copies and hit "block" on one of them and never get anything from me again and write me angry messages why purchases fail or they can not get the freebies anymore.

Another concern is still that obviously "Friend" shows up first before the rest of profiles load, so that people are getting bombarded with friend offers. And while friends are nice to have, most established residents would  like to know a person before they friend them, and decline the offer of the suspected bad mannered stranger. My suggestion to solve the mess would be to make the "IM" button available before all others, and the friending button should only be available after everything else loaded. That way more conversations have a chance to happen even, and nobody feels surprised by friend requests from strangers. I have often taken the time to ask newbies why they send me a friend offer, and they said all the same: "because i thought i can only contact you after friending" and "all other options were greyed out".

These are surely not the only reasons, but the ones that bug me daily and many times so I thought I would mention it. If I were a new resident with above said problems, my frustration level would not exactly want me to login again where it looks like I get ignored or scammed over. While in fact, it is just a problem of the user interface ;-)

Share this comment


Link to comment

they seemed to reorganise what they chose to show us in Q2 2010 - if you want to see the old stats and see what is now missing see this post.

In that post they said 'We are eager to hear what information and analysis you would like to see  about the Second Life economy that would help your business'.  Since then they have quietly dropped the following figures that would surely prove to be useful indicators:

  • Total value of user-to-user transactions
  • Total L$ held by residents

Maybe these figures could be re-instated to give businesses a better understanding of how the economy is doing.

Share this comment


Link to comment

Another thing I find confusing abouty your numbers is the question of concurrency. Repeat log-ins is something different. So what is concurrency and how has it ranged over the month?

Well, there were 105 million user hours, spread over the 2,208 hours in Q4, so grand average concurrency was 47,554 heads. This doesn't answer the rest of Prok's question, of course, and I would certainly like to see a finer grained look at it.

Share this comment


Link to comment

The big thing to remember about statistics is this ... they can be made to show ANYTHING the creator wants you to see.  Statistics are very subjective and can be manipulated in a myriad of ways to show the desired result as opposed to an undesired reality.

I think also good numbers to see, which I've not found anywhere yet, is the percentages of people using each viewer, for example, how many are using Viewer 2, the old SL viewer, Phoenix, Imprudence, etc.  This information will give a huge heads up on what is worth the time of a creator to focus on in creating.  For example, if it's a very small percentage of people using viewer 2, then is it really worth our time making all these fancy extra layer objects and meshes, etc ... that are only available for viewing/use in Viewer 2 (as is my understanding to date about such things).

I know for a fact that the role play communities have been shrinking CONSIDERABLY.  The Gorean community has HALF the sims (maybe even less) it had just 1.5 to 2 years ago.  The role play community used to be a HUGE spender of lindens on attire and gadgets to use in conducting roleplay.  Huge in making a large quantity of purchases without much prior thought too.  Those sims are hurting because no one really rents market space like they used to and with a prim costing land owners L$5.45 per prim and the best we can charge for it in rental is L$2 on average ... there's really no way to make a profit let alone break even.

There's no statistic they can provide that will change the view of reality that occurs on a daily basis when you live, work and play within SL.  It is a great concern!  But what I'm most interested in is not "what is," but "how can we fix it?"  Us the residents AND the Lindens combined.

Another thought ... has there ever been a concensus taken of the businesses in world, to show values of sales per market segment?  For example, egyptian roleplay attire, high fashion dresses, men's pants suits, boots, high heeled shoes ... etc.  or at the very least more broad groups of "men's clothing" "women's clothing" "accessories" "costumes" "footwear" and so on.  This would be so very useful to plan and project!  No?

Share this comment


Link to comment

they seemed to reorganise what they chose to show us in Q2 2010 - if you want to see the old stats and see what is now missing see this post.

In that post they said 'We are eager to hear what information and analysis you would like to see  about the Second Life economy that would help your business'.  Since then they have quietly dropped the following figures that would surely prove to be useful indicators:

  • Total value of user-to-user transactions
  • Total L$ held by residents

Maybe these figures could be re-instated to give businesses a better understanding of how the economy is doing.

wow, looking at the old report, it seems that the numbers posted here for that same quarter are VERY different ... are they changing numbers? or the forumlas they're using to report data?

About users online ... I remember, in 2006, when we had rolling crashes constantly and we were hourly logging in over and over at least a few times with many complete grid outages for hours on end, none of which we see anymore really ... there were usually (prior to the rolling crashes lol) anywhere from 60,000 to 80,000 people online at any given time at the same time and communities were larger and sales volumes were larger.  Now, we dont get locked out for hours on end and can get back in quickly when an individual crashes, yet at most there's only ever 68,000 people logged in at the same time, usually less and the grid has considerably fewer sims on which to interract.  How is this growth at all?

Share this comment


Link to comment

i have different memorys, more along the line of between 30 and 40 k. i think it went over 50 around the end of 2007.

 

anyway, fact is, the numbers have been higher in the past. around 80 k like you said. but i think it was right before m took over, must have been around the end of 2008 or so.

 

about the new statistics... not realy interesting imo

 

oh one thing is interesting though, the sales went from sl to the web, like ll wanted so bad, and everyone hated when ll announced it ^^

yaaaay commisions

Share this comment


Link to comment

Average repeat logins.... humm... errmmm..

With viewer 2 and all.. new NEW people crashing.. and HAVING to relog.. does this count for that too?

Much less, people using -other- viewers, say, like, 1.23.5, Imprudence, Pheonix, Ascent etc.....

....................... sorry....... i crashed............ relogging.... OMG another LOGIN...

 

Yeah.. I would like to know as well... and agree.. this is a waste of time to even look at anymore. Tells us NOTHING that "WE" "Customers" want to know.

 

Snap snap LL... (wake up, listen, produce facts that customers want to see, please)

Share this comment


Link to comment

There are lies, there are damn lies, and then there are statistics, and then there are those missing statistics from the Lab.

Share this comment


Link to comment

Nelson, if you are going to inform us of the income, will you please also inform us of the expenses?

As you know, most of us suspect we are paying too much for the services Linden Lab provides.  It would go a long way toward promoting good will among your customers if Linden Lab can offer a reasonable explanation of why land prices are so high.

Share this comment


Link to comment

Very well put and thank you! The shift of commerce from in-world to web has been accelerating for the past year and already having the effect you mentioned above. Smart businesses also have moved strongly away from renting satellite stores to producing affiliates which has pushed common rentals down even further. This was a known and planned outcome by Linden Lab who does not benefit directly from in-world sales but does take a percentage of all web sales. If you add the introduction of Linden free housing to the mix the impact on rental business is huge, so much that it has been driving the large increase in abandoned land. That may contradict what Linden Lab says about the 'size' of the world growing but then again they did not provide information about the amount of abandoned land or how the inclusion of the teen grid impacted land growth. Remember that Linden Lab can maintain as much unused land as they like so 'land growth' by itself is a useless statistic.

Due to these issues, my stand on commerce opportunities in SL has changed dramatically since 2006. When asked now, I tell potential business people the best thing to do is produce and sell product only, hold the minimum amount of land needed to get products listed on the web marketplace, and invest in affiliate vendors. Setting up direct sale in-world stores is simply a waste of money. The ONLY reason anyone should hold land in SL now is for their own personal use and without expectation of breaking even under any circumstances. As harsh as that sounds, it is good business practice in SL which is vastly different than RL. Linden Lab banks on people forgetting that simple fact!

As always, remember the first rule in Second Life is to have fun, NOT make money! Stick with that and you will be just fine! Peace and love everyone!

Share this comment


Link to comment

Can anyone explain to me how Linden Lab can state there was “…falling supply on the LindeX….” under Average Exchange Rate and then say, “Money supply grew significantly…” under L$ Supply?  Either the supply of L$ increased or decreased but I can’t figure out how it can do both. Can any professional finance or account person shed light on this?

Share this comment


Link to comment

User hours down since the introduction of viewer 2? Who would have thought.

But Marketplace volume up... Maybe because there's no easily accessible search function in viewer 2.

World size stagnant? Blame viewer 2 again. Not only is it hard to search, there's no place to search for retail land. That is, if you want to buy 2k of mainland somewhere, you're SOL. You only get a link to the LL Land Store, which wants to sell you a sim.

Basically, viewer 2 creates the stagnant numbers you see here, by offering a terrible user interface that neither newbie nor oldbie wants to use, and which seem to prevent economic activity other than poking around the Marketplace.

Share this comment


Link to comment

Web merchandise sales volume grew 5.8% in Q4 = in world sales down by at least that much!

In world sales support tier --- your primary revenue stream. Replacing stores with magic boxes is a loosing strategy for everyone!

Share this comment


Link to comment

Yea well you all let the bot situation get out of control again . So of course repeat logins will be up 1 % and user hours steady. Doesn't reflect true accurate numbers if you cant control Bots infesting regions once again

Share this comment


Link to comment

Although all stats above are positive I cant help to feel I did a good  thing reducing my land holding from 70+k sqm to less than 3k sqm.

Its pretty obvious LL decided to go with the "If you don't have anything nice to say, just don't say nothing at all" motto. Which is a nice motto, however when it comes to economy stats I rather see LL use "the truth, the whole truth and nothing but the whole truth (so help me god)" motto.

These stats are an insult to our intellect. Most of us would understand you had to break some bad news and would appreciate the honesty, esspecially if you would follow up with a report how to solve the decline in certain areas for the future.

So far all the replies are negative. So perhaps your customers are smarter than you give them credit for. We are inWorld every day and we notice a decline in our sales, price for mainland is going downhill, abandoned land is popping up every where, tenants leave, blogs about SL are not updated or closed down, hardly ever meet people who joined recently. So bogus economy stats can't fool us.

So please release an update for the economy stats that tells the whole truth and nothing but the whole truth.

Share this comment


Link to comment

SL is a bit flat and you should seriously consider allowing small entrepeneurs to develop, by cutting down costs on land price and tier - That may only show benefits on the long term but I assure you it will really be worth cause right now small people with great and inovative ideas will stay out, even if they try, land price and tiers is to heavy for a single person investment, we all know it takes 4 to 6 months of tiers to start sghowing positive economic resultsafter setting up a Sim, when we speak about a single sim and a single person

 

Help the small fish and have a biodiversity ocean later - competition will arrive soon !!!

 

cheers

Share this comment


Link to comment

Absolutely agree with Prokofy !

The economy stats is uncompleted. No stats on LL marketplace performance, no stats on LL support performance to residence. No residence stats joining/leaving.


I do not know if its just me but one of my support ticket waiting replay for 2 month and the other one is  2 weeks without replay.

Back 2 years before support was much better I believe.

 

And as many if you said I see no real improvements in new viewer 2.xx vs old viewer.

Share this comment


Link to comment
×
×
  • Create New...