Second Life's Private Sim Revenue in 2013 Forecast at $48M, Down From $61M in 2010

Second Life monthly sim revenue

Crunching the numbers from Tyche Shepherd's Grid Survey data, Ener Hax has a new forecast for revenue Linden Lab is earning from private sims: $47,700,000 in 2013, which is down from $60,624,000 in 2010. Back in 2011, Linden Lab's spokesman told me just under 80% of the company’s revenue is from land fees, so this could be a fairly sharp drop in overall revenue for the company. At the same time, Linden Lab seems to be getting pretty good revenue with Blocksworld, its new iOS app, while it's also boosted promotion for its monthly Premium subscriptions for Second Life, so it's possible some or even much of this private sim shortfall has been made up for by other revenue streams.

And yet again, as I've saying for several years, this also means Second Life needs new users to survive. Oculus Rift integration could bring many in, as could a robust mobile version. And yet again, no, as I keep repeating about as much, lowering private sim fees will not stop the loss of private sim revenue, only make it worse. Here's why:

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Japanese-Themed Hosoi Ichiba Sims Leave SL for Kitely

Clarrice_cinquetti_in_virgin_island

Hosoi Ichiba, a Japanese-themed SL market which supported six very beautiful sims, has entirely left Second Life, moving to the OpenSim-based Kitely. The sims had attracted a community of some 150-200 SLers, owner Amiryu Hosoi tells me, "All very active in samurai, geisha and villagers roles", but the collapsing real world economy made it difficult for Hosoi to maintain those islands.

During its heyday, he says, "There were months Hosoi Ichiba earned about $4000 USD/month and every dime flooded back in the project... I had 5 people working for me assisting customers and helping them find what they needed." Then the bottom started to fall out:

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SL Private Sim Loss Trends Still Remain Steady

Ener Hax has another sobering chart of Second Life private sim loss trends which illustrate (to me) why it's so important that Linden Lab's Blocksworld succeed, and why it's worth risking so much on the hope that the Oculus Rift creates another market for Second Life:

Second Life sim loss

The trendlines look even more dire when you see the whole chart. At this point, the evidence is so overwhelming, it's not worth explaining yet again that Second Life/Linden Lab cannot survive on its current revenue stream or its existing userbase alone:

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Second Life Sim Loss Seems to be Slowing (But Fast Enough?)

Second Life sim loss

Ener Hax crunches the numbers and reports that Second Life private sim loss seems to be slowing (as her chart above suggests), leading her to wonder: "Will there be some point, maybe next year, that Second Life sees a private sim growth rate of zero?"

Hint: probably not.

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Why Losing Second Life Sims is So Serious to SL's Future

When I argued yesterday that it's not good enough for Second Life to coast while it's core revenue base of private sims erodes, amazingly, many readers were skeptical, with some even arguing that it's a good thing SL keeps getting smaller. But Ener Hax has another way of looking at the problem, and maybe her perspective will convince some of those skeptics (though sadly, I'm not holding my breath):

SL sim loss

Money quote: "If we assume a constant ratio of 54% full to 45% homesteads... that would mean that in November of 2008, Linden Lab was making $5.4 million a month versus today’s $4.1 million. A drop of $1.3 million a month."

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SL Steampunk Sim Armada Breakaway Soon Going Away

Armada Breakaway

Emily Orr has a plangent tribute to the Second Life steampunk sim Aramada Breakaway, which is soon going away from the SL grid. "All has been done to save it, but there is just too much empty land," announced the owner. However, he added: "There will be an end of Armada party on Saturday 26 from 7-9pm SLT and everyone is invited!" Click here to teleport there.

Here's Emily on what this loss means:

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Lost World Closing Soon -- How to Stop Loss of Other Great SL Sims Remains Open Question

Second Life sim death watch

Click here to teleport to a beautiful sim called Lost World, which as Kara Trapdoor blogs, is about to be lost from the world of SL. "This is a huge loss for SL, photographers, and explorers, and well... everyone," she writes. "Truly one of the best and most loved sims I know of." The sim's owner has more on this Flickr page (from which comes the image above). At the beginning of this week, we discussed the idea of requiring Marketplace sellers to own land in SL -- a suggestion that most, I think, rejected. So remains the open question, to discuss this weekend in Comments below: Is there a way to help private sim owners better monetize their sims, or should we just accept this continued loss as inevitable?

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On List of 75+ Great Second Life Sims from 2009, Nearly a Third Now Seem Gone

Lemondrops Forest Second Life

I just stumbled into this great 2009 blog post by an SL fashion designer listing over 75 "Beautiful Places in Second Life", but as I started to browse the listing, I realized a striking thing: a lot of these places are no longer showing up on Second Life's map. Some I definitely know to be gone, but in other cases, this could just mean they've moved to another sim, or that the map interface isn't working properly. (I checked both the web-based map and the in-world version.) In any case, sims like Lemondrops Forest (depicted above), are no longer showing up in search.

On a very rough tally, it looks like nearly a third are no longer in-world:

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Sim Deathwatch: Empress and Hierophant, Another Landmark SL Sim, About to Close & Looking for a Buyer

Empress and Hierophant SL sim

The Empress and Hierophant sim, one of Second Life's most beautiful private islands, is now up for sale -- below retail price! -- by its owners, two artists who go by the avatar names Alchemy and Immortalis Cyannis, who will remove it from the grid if they can't find a buyer. I wrote about this starkly evocative place back in 2009, and it remains a milestone of great content creation in Second Life. The creators say they plan to remain in SL, but will focus on making and selling 3D items through their Alchemy Immortalis brand. Unlike Japan Chubu/Kansai, which recently went away, Empress and Hierophant comes with rental cottages, so it seems feasible that this island could sustain itself through SL renters who want a place on the blasted heath by the silvery sea. That's still a risky business, but I hope someone's willing to give it a try. Go here to check it out.

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Two Beautiful, Longtime Sims Apparently Gone from Second Life - But How to Save Others?

Clarrice_cinquetti_in_virgin_island

Two acclaimed and long-standing Second Life sims, Japan Chubu and Japan Kansai, beautiful tributes to Japanese culture and history, are no longer displayed on the Second Life grid, apparently gone after the owner, Amiryu Hosoi, unsuccessfully attempted to raise funds to keep them in-world. Variations of these sims have existed in-world since at least 2006, and they've been blogged about frequently here on New World Notes (links below). If it's any consolation, Amiryu just launched a site for real life Japanese-themed housewares and gardening here.

I've contacted Hosoi and will update this post as warranted. But as it turns out (as I learned too late) she actually contacted me about the impending crisis a few months ago, in a message I regretfully missed during some crucial writing deadlines. However, even if I had received the message in time (and I get similar ones from fiscally-strapped sim owners quite frequently now), it would leave me with a difficult quandary:

What's the best way to save a financially ailing Second Life estate, when the world's underlying revenue structure is already changing?

Here's what I mean:

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