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  ‘Second Life’ Economy Booms  
 
 
Posted 2005-07-22 by Tony Walsh
 
 
     
 
During a virtual-world "townhall" meeting yesterday, developer Linden Lab revealed that economic growth of its multi-user domain Second Life outstrips user base growth. According to official spokesperson Tbone Linden, Second Life's population now exceeds 35,000 residents, and user-to-user transactions now surpass $1.5M USD monthly--transactions per hour have tripled since last year, and sales of objects have jumped 500%, which Linden Labs attributes to an increase in the quality and diversity of user-created goods. "SL is growing just like a developing nation," said Tbone Linden, whose real-life background is in corporate debt funding and finance management. Tbone assured residents that Linden Lab is being careful "not to take excessive actions to curtail the growth in this economy, and that the company's general rule is to "change things as little as possible and allow the economy to self-regulate."
 
     
 
   
 
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Comment posted by Prokofy Neva
July 27, 2005 @ 11:58 am
     
 
Ok, but I have a LOT of questions about this. How long does this population, especially its newer portion, *stay*? And...how many oldbies *leave*?

Do they buy first land and do they tier up within 30 days to larger parcels than 1024 (there are only some 6000 land owners out of that 36000 or so, I'm estimating, based on Philip's figures of a month ago or so of only 5000 out of 32000 -- I just don't see them and I fly over a lot of sims).

Next, WHICH accounts are getting those 500 percent increase of transactions? Is this just Zeppi Schlegel, i.e. the GOM? So that new people go buy the game currency on the GOM then spend it in world for 30 days...but then...do they stay? If it's all new non-creators buying GOM from GOM objects inworld to pay old creators, then we don't have a booming economy, but just a FIC-controlled economy LOL.

And how many out of the existing monopolistic leader list are capturing that 500 percent? We have no way of reliably getting this information since an investigative free journalism and press is discouraged both within SL in subtle ways and of course on the forums in obvious ways. More and more, I suspect, dollar transactions happen completely outside of the game, unseen by Linden number crunchers.

The Lindens just made a MAJOR change to the land auction which has essentially changed the auction from opening bidding on a variety of sizes of parcels to a kind of add-to-my-shopping-cart of full-size sims opening at $1000 (server access) -- so it works out to be just $1000 a pop, because few people will bid (except for barons). This could well be the kind of major change glutting the market and devaluing the land that Tbone said they weren't going to do.

Adding the feature "Bid on this now!" so that only a resident could trigger the demand for a sim, instead of a timed-out auctioned sim, might slow the pace but there is a bit of suspicion that Lindens or shills or something are triggering these instantly because they appear and get triggered in minutes...then sit there....

Is it REALLY the quality and diversity of user-created goods, i.e. the old FIC at it again? Is it old FIC or new FIC? I think there's more new FIC than old FIC want to admit lol. How can we CHECK? We don't know TO WHOM and FROM WHOM all that $1.5m goes. We don't know whether it's Anshe or Chip or whatever. They don't have public sales reports, and really, who could compel them to? Honestly, we don't know what's going on in this world.

Only the Lindens know who is lying about their sales because only they have the information about who pays for GOM and who gets income from other residents that might exceed expenses that only they (and the individual resident) can see on the "account history" function).

These awesome aggregate numbers don't tell me anything about the health of this world and its civilization if I can't tell whether it's content or land that makes more money, and which content, and by whom, and where, i.e. there's a conventional wisdom that it's at telehubs, and a CW that it's really at boutiques and I think both aren't the full story.

How much do third-party sites get out of the economy? We need details, details!
 
     
 
     
   
 
Comment posted by Tony Walsh
July 27, 2005 @ 12:12 pm
     
 
I'm interested in the details as well. Unfortunately, the Lindens haven't responded to my request for info. Their PR department seems to be broken, or no longer exists. Several newsworthy announcements have been made lately by Lindens, but no PR has been issued officially. That's usually the indicator of an ill company.
 
     
 
     
   
 
Comment posted by Prokofy Neva
July 27, 2005 @ 12:57 pm
     
 
Oh, I don't know if it is an indicator that they are *ill,* maybe just busy coining money -- of sorts? -- and they don't care? Good thing LL doesn't have any rules about "disparement" or "spreading rumours" Zero or you might be out of the game on your ass right now lol!

Or maybe...they are more tekkie wiki geek types than marketeers? Maybe they will put the new There guy more on to stuff like that?

But you have to ask...can he type? By which, I mean, can he come inworld and talk to avs? I must confess I found it a bit eerie that Tbone was hired and working in the office for months and no one knew (well at least non-FIC lol). Then they wheeled him out to a rather silent public.

In fairness, when I asked Philip IW about the land statistics, he promised to cut and paste the chat and *the next day* he put out something on the forums. Now, I don't think he stayed up all night with Excel and a calculator, I think they just have stuff and you have to ask? I still don't have answers to my basic questions tho. For example, in his thread on the Linden announcements http://forums.secondlife.com/showthread.php?t=55089 Philip says these figures:
7737 | 2231 | 1417
for sales, buyers, sellers is a "large number of different buyers and sellers" but I don't get it. Are the unique buyers in every instance or the same buyers, i.e. barons? 1417 players made 7737 sales of land to 2231 other players. That means 1417 players have more than one piece of land. That means they are land dealers -- or older players desperate to cash out of the rapidly devaluing land market and move to private islands or just tier down before they lose their shirts more.

And those 2231 also bought more than one piece of land. So they are land dealers too, or people forced to buy up the 512s that land barons churn in world to force people to buy fast, in order to strong-arm them into sales out of fear of losing the view or access or control of FSP when a club or newbie or whatever lands and buys just one 512.
 
     
 
     
   
 
Comment posted by Prokofy Neva
July 27, 2005 @ 12:58 pm
     
 
*disparagement
 
     
 
     
   
 
Comment posted by Tony Walsh
July 27, 2005 @ 2:12 pm
     
 
Prokofy wrote:
Or maybe...they are more tekkie wiki geek types than marketeers? Maybe they will put the new There guy more on to stuff like that?

Yes, they are definitely more techie than PR-oriented. Robin Linden used to be the main PR contact, then they hired an outside company, and then they hired someone to head up their marketing department. But LL doesn't seem to be issuing many press-releases--the last major announcement was made in January. Sure, they've gotten press since then, but a company that isn't issuing press-releases to promote notable events, then you get people like me breaking news that isn't properly Linden-massaged. While I appreciate LL spending more time on developing Second Life instead of spin-doctoring, the fact that they can't do both indicates that they are understaffed, overworked, or under-strategized. That's what I mean by "ill."

I agree that we need finer and more specific data on SL's economy. I think it's in LL's best interest to keep the data fuzzy enough so it looks like its entire population is comprised of active creators/consumers/land baronettes rather than a small group of powerful individuals.
 
     
 
     
   
 
 
     
 
     
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