Other World Notes: 2008's Top 10 Money-Making MMOs (and why SL isn't one of them)

I just posted on GigaOM a top ten list of MMOs/MMORPGs which earned the most revenue in 2008, at least according to DFC Intelligence.  I told them I was surprised Second Life wasn't included on the list, because based on publicly available figures, Linden Lab seems to have grossed nearly $100 million in revenue last year. "SL hovers right outside the top ten," DFC's Joost van Dreunen explained. 

Their analysis however, is also categorical: "While we do cover SL," Joost added, "it generates revenue in different ways than other MMOs that revolve, in principle, around gaming."  That's understandable, especially because it's difficult to see SL competing in this space.  Five of DFC's list are traditional Western-style MMORPGs (Warcraft, Runescape, Lord of the Rings Online, Warhammer Online, Age of Conan), four are based mainly in Asia (Fantasy Westward Journey, Maple Story, the Lineage franchise, Shanda's MMOs), and three are marketed primarily to kids (Maple Story, Runescape, Club Penguin.)  It's quite possible Linden Lab may eventually earn as much revenue as any of them (except WoW), but in the near future at least, it's difficult to see them drawing many paying customers from the 80 million or so people already playing these MMOs.

Comments

[Emeline Magic]

If I remember correctly Philip Rosedale tell LindenLab earn more than 10 millions US$ per month when he was at the head...

[Patchouli Woollahra]

Then your understanding and mine of how Second Life was run seem to differ. As I understood it, most of the dollar that SL earned wound up being spent, first on stipends and initial infrastructure, then on expanding and upgrading the system as the place got bigger, as well as the regular upkeep on thousands of servers and high-quality network lines.

They may have made $10 mil a month, but I'd be skeptical about any numbers that translate it to any supernormal profits.

[Doubledown Tandino]

I don't see how Linden Lab couldn't be making millions and millions. They are the only company in the world that creates and prints money out of thin air and sells it. ...that is, except for the US government's central banking system.

[Emeline Magic]

@Patchouli

Lets make an estimation of LindenLab incomes based on December 08 economy stats, 22500 islands (20% mainland, 80% private), 78.000 premium accounts and a fixed rate of 270 L$ for 1 US$.

LindenLab incomes are:
1) Private island rentals (18.000 islands x 300 US$ = 5,4 M US$)
2) Mainland rental (4500 islands x 200 US$ = 0,9 M US$)
3) Premium accounts (78.000 accounts x 10 US$ = 780.000 US$)
4) L$ sold on the Lindex (L$179M = 663.000 US$)
5) Upload (L$31M = 115.000 US$)
6) Classified (L$27M = 100.000 US$)
7) Parcel directory fees (L$8M = 30.000 US$)
8) Land auction (L$4M = 15.000 US$)
9) Group creation (L$2M = 7.400 US$)
10) XStreetSL 5% commission (0 US$ cause XstreetSL was independent)
Total: 8.01 M US$

And they pay for:
1) Servers upkeep, sims and central server (unknown)
2) Amazon S3 storage, disk space and bandwidth (unknown)
3) Other infrastructure costs (unknown)
4) Server maintenance (unknown)
5) US$ sold on the Lindex (unknown)
6) Stipends (L$143M = 530.000 US$)
7) Lindens salary (unknown)

If you look carefully the L$ sold on Lindex is always bigger than the stipends so it don’t cost any US$ to LindenLab. ;)

[Arcadia Codesmith]

"it's difficult to see them drawing many paying customers from the 80 million or so people already playing these MMOs."

That statement has got me thinking... one of the things that the current batch of MMOs is lacking is effective social spaces. One thing that I've always dreamed of is a "hub", where people from different games can meet and mingle, the VR equivilent of Callahan's Crosstime Saloon, The Restaurant at the End of the Universe, or The Floating Vagabond (extra geek points if you get all those references).

Picture being able to effortlessly translate your MMO characters into SL avis, and mixing and mingling in a big tavern - Starfleet officers rubbing shoulders with Wookies, orc warriors hitting on superheroines. Ideally there could even be portals to the tavern in the various MMO worlds.

In short, SL wouldn't pull players away from their favorite games, it would augment those games by providing a compelling social experience away from the pulse-pounding action, a place to unwind and swap tall tales.

It's probably not very practical, and it would require more business and technical chops than I've got to get it running and to get any of the MMO developers to sign on. But it would be wicked cool. And sometimes wicked cool is all it takes to get those developers' gears turning...

[Emeline Magic]

The economy stat page dissapear !!!!
http://secondlife.com/whatis/economy_stats.php

Is M gonna turn LindenLab in a black-box bunker ?