How's The Second Life Economy Doing? M. and T. Linden Talk Earnings, Land Owning, L$ Transactions, And More

Last week I was teleported into the spacious Second Life office of company CEO M. Linden (IRL Mark Kingdon), where we were joined by a giant green frog who happens to be Linden Lab's Chief Product Officer. (T. Linden, IRL Tom Hale.) We were there to speak about the state of the internal SL economy, in follow-up to the first quarter report posted by Linden on April 16. I conducted some of the interview as machinima, which is what you see above.  As you'll see, it was a partly successful experiment, because my own audio somehow did not get recorded. Here's the main topics covered/questions I ask in the video:

• 1:22 - T. Linden summarizes the SL economy's current state.
• 2:24 - What happened in the transition from OpenSpace to Homestead sims in the wake of a feverish Resident protest?
• 4:50/5:50 - M. discusses new and established Residents purchasing land and Linden Dollars, and how that positively impacts SL businesses.
• 7:02 - T. Linden on the three main segments of Second Life users.
• 8:50 - Why only 45% of total Residents are buying Linden Dollars, and how the company hopes to increase that number, especially in countries (as it turns out) like Brazil where few L$ are purchased.

We covered a number of topics beyond these, chief among them: when will the Economic Stats page be fully restored? (It's been partly disabled for the last few months.) M. Linden promises it will be back "for sure" in the next 2-3 months. The reason they took them down, he said, was because people were misinterpreting data on the page which suggested a decline in island ownership in the wake of the OpenSpaces controversy.

More highlights after the break, including answers to several questions suggested by NWN readers. Among them: Who's purchasing Linden Dollars, when will xStreetSL be improved, and how much L$ revenue is generated by real world businesses?

Who's purcashing L$ by nation?

• 43% from the US
• 5-10% from top EU countries and Japan
• 4-8% from Brazil and Spanish speaking countries

Which is growing faster-- in-world sales or xStreetSL catalog sales? (Question suggested by Crap Mariner)

Lindens aren't really looking at sales. Xstreet enjoys heavy penetration among SL's most active users, 20%, but only 1 percent or so of the total population use the ecommerce site.

What is being done to simplify the listing of items for sale on xStreet? (Mariner question)

T. Linden says that's being worked on, and the improvements will come this Summer.

What percent of the SL user base holds how much of the L$ wealth? (Question suggested by Robustus Hax)

T. answers that L$ ownership is highly distributed, with very small concentration of extremely wealthy Residents. "Hard data says it's a very diverse user base." (T. Linden.)

How many Premium accounts are there now?

While insisting the Premiums aren't an accurate measure of Linden revenue, M. Linden says it's currently around 75K subscribers. According to Linden surveys, Premium holders mainly value the convenience of a regular L$ stipend and value of extra tech support. Most Premiums, around 80%, don't own land.

How much of the internal economy is generated from real world businesses?

Unknowable, something the Lindens are trying to understand; T. speculates it's slightly smaller than 15%.

According to Lindens' in-world business surveys, 20% SL businesses earn all their income in SL. T. speculates there's roughly a couple thousand full time businesses operating in Second Life, but it's a difficult figure to track.

Other comments: Pre-paid cards sold at retail are a "Very clear option for us in the future" (T. Linden). No plans for a Linden-sponsored social network. "Community happens where community wants to happen" (T. Linden).

Comments

[JJccc Coronet]

this video shows why people are leaving second life in there droves the sound on the video sucks, Sort out the visuals sounds in sl or everyone wil jump ship over night the minute something better comes along then it will be to late

[JJccc Coronet]

word of advice for making video set the sky and lighting level then set the junk as off use ctrl alt f1 also use a joypad to fly arround fo smoother effects

[Hamlet Au]

Thanks. I do usually remove the UI but I was trying to refer to my notes in a notepad at the same time. Like I said, it was a partly successful experiment.

[Robustus Hax]

Hey Hamlet, control-alt-f1 gets rid of the menus

[radar]

@JJccc Err, people aren't leaving in droves. I agree LL needs a kick to get back on top technologically speaking, but people aren't leaving. If anything, they are coming in.

[Toxic Menges]

Or get a machinimist to cover it for you :) Only kidding, good job, the story is the main thing, right?

[Hamlet Au]

Actually I would be interested in working with a machinimist cameraperson/editor, would make it a lot easier for me to concentrate on the interview.

Toxic you have a lot more experience, do you know why my voice audio didn't recorded in FRAPS?

[qarl]

do we have an in-world videography services?

basically - someone with a super-hot video card, who can record and edit super nice videos.

it's hard, and that's why we have them in the real world. now we need them in SL too.

[HeadBurro Antfarm]

Hamlet - Osprey is a cracking film maker :)

[Toxic Menges]

I think you are onto something there Hamlet - you needs a crew ;) I don't use fraps as I am on a mac, but it sounds like your fraps was set to record directly from the viewer, and as your voice wouldn't be heard through that unless there was feedback from another speaker on M or T, that's why you didn't manage to record your voice.

Another reason why you need a third party there to record you.
:)

[Ciaran Laval]

"The reason they took them down, he said, was because people were misinterpreting data on the page which suggested a decline in island ownership in the wake of the OpenSpaces controversy."

Err there was a decline in island ownership, they even said so in that interview. People knew that conversions meant 4 = 1.

[Steven Groves / Estaban Graves]

I've done a few in-world efforts at recording interviews; did one with M early on in the development of The Social Media Bible with Lon Safko, the author. Come see it on our parcel in SL or at YouTube byt searching Social Media Bible Mark Kingdon.

I'd be happy to help with the recording if you need it again.