Why I've decided to stop creating content in SL

[Dillon Levenque]

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Qie Niangao wrote:

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Dillon Levenque wrote:

Had you not made these points five hours ago I'd be saying much the same. SLM may reduce the number of sellers inworld but of course it reduces the number of buyers inworld not at all, there being no place to use one's purchases other than inworld. What it probably has done is change the inworld behavior of the buyers—less time shopping, more time socializing/building/learning. There are probably opportunities for income because of that.

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Well, I disagree, strongly.  People simply are

not

spending the same amount of time in-world: Concurrency is flat or falling, even as logins increase.

Some of my most enjoyable experiences in SL were what might be called "social shopping."  Exchanging Marketplace links may be more efficient but it's not nearly as much fun.

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I certainly won't disagree with the statement that people are not spending the same amount of time inworld; I just doubted shopping had much to do with that.

We clearly have differing attitudes about shopping and mine no doubt colored my opinion: I don't really enjoy shopping very much and I frequently find myself frustrated by the time it takes away from my slife. You obviously approach the shopping experience from an entirely different direction.

[Rene Erlanger]

I'm pretty much like Qie.....the explorer in me! :matte-motes-smile:

So I enjoy the in-world shopping part and discovering new places, new sims and new gems!

[Dartagan Shepherd]

Posted this elsewhere but it relates to your earlier comment about how much revenue Marketplace might earn and how sinks are real money in real accounting.

Gut feeling says the actual number is twice this or better, no way to tell in a system that publishes fictional economy stats and no numbers suitable for accounting. Also reported earnings, profit and costs never really reconcile, so there's not much basis in fact on that kind of complete earnings picture from LL.

Marketplace commission, like other sinks can be equated to real money, they’re just not thought of as revenue because they’re not a direct income. However, ask an accountant how this works and they’ll tell you that it is income and on what side of the balance sheet it falls in real world accounting.

Money comes in from whatever source (tier, buying $L, premium accounts, etc.). LL puts some of this money into a global pool of L$ we call the economy. The more they take out of that global pool (which was purchased originally with real money), that’s the ammount they get to keep in real dollars.

Take the last published quarterly report, where gross Marketplace sales were published.

Quarterly gross Marketplace sales: L$1,183,000,000

5% quarterly commission in L$: L$59,150,000

Converted to real dollars at a rate of 260 (just because, even though there's no real correlation between what the exchange says a linden dollar is worth and what it's worth on LL books as real cash), it’s roughly $227,500 USD for the quarter.

Roughly $76,000/month USD gross earnings from the Marketplace commission.

This isn’t complete because it doesn’t include advertising sales or purchases in real dollars (PayPal purchases on thr marketplace, which are inflated substantially from items purchased with L$).

Gross marketplace sales keep increasing as LL guides more and more of sales from in-world to the marketplace.

In real life accounting terms, this is money that just never has to go back out of the system, which is the amount LL gets to keep out of their gross income.

Only in terms of the virtual economy does this money bounce around from user to user and act as some sort of balancing equation or “sink”.

So yes, marketplace commission and sinks are real money for LL, just not in the sense of revenue. The money has already been made before the commission and sinks kick in. Nevertheless sinks count as income that doesn’t have to go back out.

So that $76,000/month USD (still an arbitrary although conservative number due to lack of more info) might get you in the ballpark. Nosebleed section. Or maybe into the parking lot of the ballpark.

At this rate, it'd offset tier of 250 sims. No real way to tell though.

[Rene Erlanger]

Thanks for that info Dartagan ....very useful ballpark figures :matte-motes-smile:

It's as i had suspected...that the gains fom Marketplace commissions do not compensate the loss of Tiers from Commercial Lands/ Sims.(not even close!)  This tells me their current strategy of driving shopping off-world is backfiring through accelerated loss of Tier income!

As pointed out by Qie, the lack of In-World traffic,  also effect Clubs, Roleplay sims, Art Galleries, other social places (like Lost Gardens of Apollo) who rely on Merchants renting out Vendor spaces to subsidise their Tier/ Rent payments. I would presume a decent chunk of those 1500 sims handed back...had some sort of commercial activities on them.

[leliel Mirihi]

I'm shure some of those sims were closed due to the market place. But I have a feeling the majority of them left because of LL dragging there feet and ignoring bugs for years, support denying there's ever a problem, sudden and erratic policy changes, ridiculously high prices, etc.

That is to say I don't think now is the best time to draw conclusions on what the market place is doing to inworld locations. There are way too many other reason people are leaving.

[Rene Erlanger]

Nope,...a lot of Merchants have given up their Sims.

Owning a couple of Malls, i've gotten to know a lot of Designers over the years.. I can tell you from just that sample....many many have given up their Sims or downsize their lands......in the last year. Some have closed up shop completely...and ventured over to InWorldz or Avination Grids.

Marketplace has had a huge impact on In-world traffic....most Merchants will tell you that! (and therefore sales). I have unique visitor counters in all of my Stores (26) around the Grid....and have records on Excel Spreadsheets  going back more than 4 years!

Bugs and bad customer service has always existed.

Tier prices have not changed for Full sims since 2007, Mainland has never changed....only Homestead sims changed from their initial offering of $75 to $125 p/mth in 2009

[Deltango Vale]

"Well, I disagree, strongly.  People simply are not spending the same amount of time in-world: Concurrency is flat or falling, even as logins increase."

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I agree with the effect, but not the cause. You are absolutely correct to say that inworld activity has fallen. The quantity of estate sims is plummeting. The value of mainland has collapsed.

I am open minded about the possible contribution of SLM to that decline (although I believe SLM has helped SL), but to lay all the problems of SL at the door of SLM seems a bit exclusive.There are big problems at Linden Lab: problems of purpose and vision, problems of strategy and planning, problems of management and customer relations. In truth, there are so many problems at Linden Lab that I'm amazed SL has survived at all.

[Rene Erlanger]

That might be so Deltango...but they are the same problems that have been around since it's inception......the only difference is that Merchants were able to ignore all the glitches as they were still getting decent traffic.....and therefore decent sales.

To give you an idea how it has effected "unique visitor counts".....if i optimised my lands and got a no.1 spot for the most popular keyword in that sector...that shop would have gotten between 150 -200 unique visitors in a day (as far back as 2010)....now with that same high ranking position, it will only yield between 40-50 !! That's is a huge drop-off

Concurrency has declined since 2010.....but it's only by a small amount each year and not the cause of such a large fall in visitor counts. The goal posts have moved............to Marketplace!

[leliel Mirihi]

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Rene Erlanger wrote:

Nope,...a lot of Merchants have given up their Sims.

Owning a couple of Malls, i've gotten to know a lot of Designers over the years.. I can tell you from just that sample....many many have given up their Sims or downsize their lands......in the last year. Some have closed up shop completely...and ventured over to InWorldz or Avination Grids.

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You're telling me these people quit sl and went to other grids just because of the market place? That sounds a little fishy to me.

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Marketplace has had a huge impact on In-world traffic....most Merchants will tell you that! (and therefore sales). I have unique visitor counters in all of my Stores (26) around the Grid....and have records on Excel Spreadsheets  going back more than 4 years!

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I never doubted that the MP had an effect on inworld traffic and has thus caused some places to close down. But does it really matter that much to a merchant if the sale is inworld or on the MP? A sale is a sale after all.

My point is I don't think the MP is the main reason SL is in a decline. I think people are leaving more so for other reasons.

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Bugs and bad customer service has always existed.

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Customer service wasn't nearly as bad 5+ years ago. There's a limit to how much people can take and for how long.

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Tier prices have not changed for Full sims since 2007, Mainland has never changed....only Homestead sims changed from their initial offering of $75 to $125 p/mth in 2009

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I know, I was here. Doesn't mean the prices aren't too high now.

 

 

 

[Rene Erlanger]

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leliel Mirihi wrote:

You're telling me these people quit sl and went to other grids just because of the market place? That sounds a little fishy to me.

Nope, not only Marketplace...just the general climate of the economy...including copybotting too.(LL not effectivel dealing with it)

I never doubted that the MP had an effect on inworld traffic and has thus caused some places to close down. But does it really matter that much to a merchant if the sale is inworld or on the MP? A sale is a sale after all.

You don't get it ....and i explained it, in another post,  the difference in the potential sizes of regular income to be made from a well marketed In-World store compared to Marketplace with it's very limited Marketing options

 

My point is I don't think the MP is the main reason SL is in a decline. I think people are leaving more so for other reasons.

If it's due to a number of reasons, traffic moving away from In-World to Marketplace would certainly be near the top...if not the top reason.

 

Customer service wasn't nearly as bad 5+ years ago. There's a limit to how much people can take and for how long.

I agree it was better when Linden employees were manning "Live Chat" support

 

I know, I was here. Doesn't mean the prices aren't too high now.

The Sim prices were always too high, for what you actually get.

Open Sim grids have proven it can be done at a heavily discounted price, but they don't carry the same amount of overhead or staffing levels as LL. Yet saying that, I've always felt that Sims should have been priced around the $150 USD range and not $295.

 

[Ann Otoole]

Clear the smoke out. The day SL goes below a certain line revenue wise LL will simply cease to exist. Bill Gurley will cut LL to bits and sell it off to get whatever he can. He has said as much as a general business principle on his blog over a year ago.

LL is working on non SL stuff now. So am I.

[leliel Mirihi]

Rene Erlanger wrote:

Nope, not only Marketplace...just the general climate of the economy...including copybotting too.(LL not effectivel dealing with it)

But the other grids have significantly smaller markets. Are these people making the same amount of money in the other grids as they were in SL prior to the introduction of the MP? That's the part that sounds fishy to me and why I think they left for a lot more than just the MP.

You don't get it ....and i explained it, in another post,  the difference in the potential sizes of regular income to be made from a well marketed In-World store compared to Marketplace with it's very limited Marketing options

But all else being equal there should still be the same number of people wanting to buy things, so where are they? I think the decline in the user base and concurrency is what's really causing the reduction in sales and these people are leaving due to LL's bad track record over the last few years. Also the new, and worse, inworld search was introduced at the same time as the MP. Really you could explain this trend as a series of unrelated coincidences that interacted together.

[Deltango Vale]

"That might be so Deltango...but they are the same problems that have been around since it's inception"

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@ everyone

A company must upgrade its product. It must stay on the leading edge. Nokia had a great product in 2006. iPhone came out in 2007. Nokia had momentum. iPhone had growing pains. Nokia did not go out of business overnight; it started bleeding.

Second Life was an amazing product in 2006 (yes, there were technical problems), but Second Life is still a 2006 product (worse in many ways). The technology is aging. Bad policies accumulated, building on each other. Second Life has been bleeding since 2008, but there was a loyal following and no serious competition. Such bleeding, even under ideal conditions, is not sustainable. Eventually, a tipping point is reached and a company goes into its death spiral.

For over 10 years, Apple struggled, bleeding, bleeding, bleeding, until it finally went into its death spiral. Imagine if Apple had been broken up for scrap in 1998. What Apple needed was a large capital injection, new leadership, new strategies, new management and new technology. Second Life is Apple 1997, Nokia 2009, Kodak 2010. The company needs to wake up!

Sadly, the company is out cold on Valium. That means it needs to be sold to someone willing to turn things around. It means a large capital injection to rebuild the technological infrastructure - to make SL much more realistic - to make it run fast - to make it robust and flexible. Residents are craving more realism with fewer hassles. Then there needs to be a complete revision of previous policies. Second Life is an escape from RL. That's why people (grown-ups) came here in droves. Residents don't want a bland version of RL; they don't want Disney II or WoW II or Facebook 3D. They want to socialize in an information-rich, alternative reality. Merchants was a clean and robust property-rights structure. Linden Lab is currently satisfying nobody. Die-hard fans are finally throwing in the towel.

[Pussycat Catnap]

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leliel Mirihi wrote:

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Marketplace has had a huge impact on In-world traffic....most Merchants will tell you that! (and therefore sales). I have unique visitor counters in all of my Stores (26) around the Grid....and have records on Excel Spreadsheets  going back more than 4 years!

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I never doubted that the MP had an effect on inworld traffic and has thus caused some places to close down. But does it really matter that much to a merchant if the sale is inworld or on the MP? A sale is a sale after all.

My point is I don't think the MP is the main reason SL is in a decline. I think people are leaving more so for other reasons.

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Not to the merchants.

But merchants are -NOT- the life of SL.

Entertainment and social venues are venues are.

 

If merchants dried up, SL would survive. It'd look like Open Sim but it would survive.

If places to go dried up, SL would be dead.

 

Now sk what keeps places you visit alive?

Mostly renting to merchants - who no longer need it... thanks to MP.

- Thus MP is killing SL.

 

[Qie Niangao]

Sure, Marketplace isn't the only thing contributing to SL's decline.

In fact, a changed Marketplace could play some role in revitalizing the platform.  I've ranted about it before: unify in-world and Marketplace search, with commission-free sale of in-world items on Marketplace and commissions on Marketplace-only listings set to 30%.

If they can't devise or enforce policy details to prevent gaming of which items are in-world, then just raise all commissions to 30% (or drop tier by 80%), remove the rule that merchants can't charge more on Markeplace than in-world, and let the invisible hand sort it out.

[Shimmy Shemesh]

I am really surprised at the approach they have taken to make more money by competing with the very people who built SL as it was a couple a years ago. You can not expect a club to compete anymore, when sales on their mall has declined.. Or did they expect this and want this? It makes you wonder what other venues they own in world as alts lol?

Insider trading at its best

[Shimmy Shemesh]

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Pussycat Catnap wrote

Not to the merchants.

But merchants are -NOT- the life of SL.

Entertainment and social venues are venues are.

 

If merchants dried up, SL would survive. It'd look like Open Sim but it would survive.

If places to go dried up, SL would be dead.

 

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Merchants are a solid part of a popular places survival. Entertainment venues rely on merchant rentals to pay tier. Without it. They would not be able to afford the cost. . People do not donate and tip enough to cover employee wages (which is a vital part of a thriving economy) and tier at the same time. . Removing the money from circulation only leaves you holding a bag of money and people standing around saying : "thats the trickle up affect"

On average, just in wages, a popular place pays out to their hosts, over 100,000 lindens a month,  (not including the tips they make). Those hosts in turn, spend that money in world, either by rent, or clothing. If the company you pay puts up a net to catch all the money, and doesn't put it back into circulation then you will slowly see your economy decline, and in this case, the market place is that net

It is hurting businesses as we speak, and already showing its adverse affects

[Rene Erlanger]

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Ann Otoole wrote:

Clear the smoke out.

The day SL goes below a certain line revenue wise LL will simply cease to exist

. Bill Gurley will cut LL to bits and sell it off to get whatever he can. He has said as much as a general business principle on his blog over a year ago.

LL is working on non SL stuff now. So am I.

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Well at least you're the only one here along with Dartagan...that can see the danger signals if SL continues to lose Estate Sims at the rate of knots....in that it will wipe away their remaining profits and eventually reach their break-even point.

Without proper insight to the full Financials it's not easy to determine what that figure might be....but we know 1500 sims will yield a annual loss of around $4 Mill usd income.....so I reckon if another 3000 -4000 Estate Sims were handed back, that would probably pretty much do it. That wouldn't necessarily end LL or SL....as they'll probably do another round of staff cuts to lower overhead.

It's a race against the clock Ann......they need to develop non-SL products that will sell and become popular. No guarantees on that score.

 

PS The bleeding has stopped this week! The Estate sims total actually grew by 1 Sim !

.

[Rene Erlanger]

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leliel Mirihi wrote:

 

But the other grids have significantly smaller markets. Are these people making the same amount of money in the other grids as they were in SL prior to the introduction of the MP? That's the part that sounds fishy to me and why I think they left for a lot more than just the MP.

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Nothing fishy about it.....it's making losses here in SL and paying $295 Tiers due to a lack of sales (& traffic).....versus making very small profits (or break-even) on another platform with much cheaper & affordable land. There's no denying that was helped along by bad polices & strategies....and a sense of neglect from LL

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leliel Mirihi wrote:

 

But all else being equal there should still be the same number of people wanting to buy things, so where are they? I think the decline in the user base and concurrency is what's really causing the reduction in sales and these people are leaving due to LL's bad track record over the last few years. Also the new, and worse, unworldly search was introduced at the same time as the MP. Really you could explain this trend as a series of unrelated coincidences that interacted together.

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Nope....your products on Marketplace are pooled into one big basket of SL goods! One is more or less powerless for those products to be seen....it can be the best thing since slice bread, but if it sits at the bottom of the pile in keyword searches....you're not going to be making many sales!

For MP searches, .you can only rely on 3 things - effective keywords, Enhancements and attractive photo & description.....then you're left to the power of the Gods....the MP Search engine! No one is certain on what algorithms it searches on....we can all make guesses!

In-world with a main-store, we have more control over our own marketing....we don't have to solely rely on ALL Search engine, there many other marketing methods that can bring in traffic and ultimately sales. That's a critical difference. One doesn't feel lke we're competing against others and dependent on one Search facility.......much much greater flexibility for In-world marketing.

 

The concurrency hasn't dropped off that much in the last 2 years....look at the 3rd graph.

The average daily concurrency is a slow gradual decline.....it is no way proportionate to the drop-off in In-world shopping traffic and In-world sales. I have been recording in-world data for over 4 years...like unique visitor accounts or Classified advert click-throughs......these are not pie-in-the-sky theories!! There's a good reason for recording such data.....i.e existing and future trends!

 

[Rene Erlanger]

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Deltango Vale wrote:

"That might be so Deltango...but they are the same problems that have been around since it's inception"

--------------------------------------------------------------------

@ everyone

Sadly, the company is out cold on Valium. That means it needs to be sold to someone willing to turn things around. It means a large capital injection to rebuild the technological infrastructure - to make SL much more realistic - to make it run fast - to make it robust and flexible. Residents are craving more realism with fewer hassles. Then there needs to be a complete revision of previous policies. Second Life is an escape from RL. That's why people (grown-ups) came here in droves. Residents don't want a bland version of RL; they don't want Disney II or WoW II or Facebook 3D. They want to socialize in an information-rich, alternative reality. Merchants was a clean and robust property-rights structure. Linden Lab is currently satisfying nobody. Die-hard fans are finally throwing in the towel.

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If LL had a CEO like Cary Rosenzweig  (IMVU)....Second Life would be flying right now, we'd have at least double the concurrency if not triple (that's if we solved the scaling issues...or created a 2nd Grid and linked via Interportablility to orginial grid i.e Aditi linked to Agni)

I think SL needs to be sold to a company that has some sort of vision of what SL could be. Sadly although the SL concept was revolutionary...its platform archictecture needs to be changed and re-created from scratch with a more robust SL ver 2.0

SL is becoming old tech......Mesh is not the saviour (most other MMOG already use Mesh)

[ROB34466IIIa]

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Rene Erlanger wrote:

The concurrency hasn't dropped off that much in the last 2 years....look at the 3rd graph.

 

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I dunno ... I see  a drop there in the long run of about 20% (rough estimate).

 

You have a statistic too about in-world traffic / sales like that ?

 

 

 

[Rene Erlanger]

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Shimmy Shemesh wrote:

Merchants are a solid part of a popular places survival. Entertainment venues rely on merchant rentals to pay tier. Without it. They would not be able to afford the cost. . People do not donate and tip enough to cover employee wages (which is a vital part of a thriving economy) and tier at the same time. . Removing the money from circulation only leaves you holding a bag of money and people standing around saying : "thats the trickle up affect"

On average, just in wages, a popular place pays out to their hosts, over 100,000 lindens a month,  (not including the tips they make). Those hosts in turn, spend that money in world, either by rent, or clothing. If the company you pay puts up a net to catch all the money, and doesn't put it back into circulation then you will slowly see your economy decline, and in this case, the market place is that net

It is hurting businesses as we speak, and already showing its adverse affects

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Very good post Shimmy....a cause & effect that both Pussynap & Qie alluded to previously.

Banning of Avatar camping (not the traffic Bots)....had a similar effect on the economy back in 2009. Decreased the fluid movement of money supply

[Rene Erlanger]

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ROB34466IIIa wrote:

 

I dunno ... I see  a drop there in the long run of about 20% (rough estimate).

 

You have a statistic too about in-world traffic / sales like that ?

 

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Its about 16% drop. 58k Jan 2010, about 48/ 49k nowadays  (drop of 9-10k)....but that graph is over 2 years, so about 8% drop per annum.

 

I have statistics for my own shops - i.e Unique visitor counts and sales for 4-5 years.....traffic dropped like a stone around Spring 2011...it no longer had any correlation to concurrency graph.

[leliel Mirihi]

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Rene Erlanger wrote:

Well at least you're the only one here along with Dartagan...that can see the danger signals if SL continues to lose Estate Sims at the rate of knots....in that it will wipe away their remaining profits and eventually reach their break-even point.

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Um...There's a lot more than just two people that can see the warning signs, we just disagree on what the cause is.

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The concurrency hasn't dropped off that much in the last 2 years....look at the 3rd graph.

The average daily concurrency is a slow gradual decline.....it is no way proportionate to the drop-off in In-world shopping traffic and In-world sales. I have been recording in-world data for over 4 years...like unique visitor accounts or Classified advert click-throughs......these are not pie-in-the-sky theories!! There's a good reason for recording such data.....i.e existing and future trends!

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That just reinforces my first question. If the people are still here but they aren't buying inworld and they aren't buying on the market place then where are they?

Either they're not buying, their purchasing is spread out more evenly among merchants due the the market place, or they're not here.

[Rene Erlanger]

 

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leliel Mirihi wrote:

That just reinforces my first question. If the people are still here but they aren't buying inworld and they aren't buying on the market place then where are they?

Either they're not buying,

their purchasing is spread out more evenly among merchants due the the market place,

or they're not here.

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You''ve answered your own question (bolded text) ...spread out across more Merchants. MP is great of lazy Merchants or ones not knowing how to market their own products in-world......MP does it for them more or less.

In-world you have to work in bringing your own traffic. You cannot just plonk a shop in a middle of the sim and adopt "If you build it, they will come." approach...it's not going to work!

The problem, it's no longer a level playing field....we've had Shopping websites since 2005 that's not the issue ----> Onrez, SLEX later XStreet and now Marketplace. The key difference is the way LL have promoted Marketplace to the forefront of purchasing SL goods.....that's a racket and unfair to in-world Merchants who pay them Tiers for their land!

Within the official LL Viewers....there's a "Shop" button with a nice shopping cart right next to your BUY $ and Linden $Balance. You hit that button and it opens up Marketplace...yet we're in-world where most of the Merchant's shops are located!!!. Meanwhile the Viewer Search facility for everything related to finding in-world locations is nicely tucked away on the left-hand side of screen with a "Looking glass icon"

As a Noob, which button are you going to hit first....if you want to shop for SL products?