Yes, Second Life is "Coasting" -- But Coasting Won't Cut It
Nalates Urriah has a really good "state of Second Life" post compiled from various data sources, such as concurrency rates over time, and the number of SL regions over the last four years (above) from Metaverse Business. Based all those numbers, his baseline analysis is this: "The best I can say is Second Life is coasting along... The stats are certainly not rosey. But, neither are they all that gloomy." That's kinda true, but misses a more important point: Yes, Second Life is coasting in the sense that usage has slowed, but not drastically, and that it's losing regions (see above), but not rapidly. From one point of view, that's pretty impressive. Most online worlds lose much more paying users much nire faster, and the fact SL has stayed relatively stable for so long is quite remarkable.
From another point of view (and the only one that matters, frankly), this coasting status is quite serious, and here's why:
Second Life can't afford to coast. The land-based revenue model depends on continued user growth and monetization. More active users mean more people buying virtual goods, which means more ways that private land owners can cover tier and sometimes even make a profit. As the users go away, so does the land -- which is what's happening now. The trouble is, every sim owner who goes away translates into a loss of several thousand dollars in yearly revenue -- often much more. In 2011, about 5,500 people were responsible for most of Second Life's revenue. Roughly a year later, only 4850 remained. That's 650 gone in a year. If this decline continues at roughly that rate, well, no need paint the dark conclusion in any more detail. In the last few years, World of Warcraft lost about 3 million paying users. But it still has some 9 million left. World of Warcraft is coasting in a comfortable way. Second Life, without some drastic changes and new revenue models, not so much.
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