Minecraft's Made as Much Money as Second Life Makes in a Year - When's Linden Going After That Market?

From October 2010 to the end of 2011, a 3D, open-ended sandbox game with last-generation graphics, no set rules, and a high degree of user-generated content (including collaborative multiplayer content) made $80 million in revenue. No, I'm not talking about Second Life, though I could just as well be, because SL earns about $75 million in revenue a year. I'm talking about Minecraft:

Developer Mojang recently quantified its success, noting that the game brought in pre-tax revenues of $80 million (540 million Swedish krona) in the 15 months following Mojang's official debut in October 2010, reports Swedish tech site NyTeknik.

So an indie game which was basically created by one guy at launch grossed as much revenue as a virtual world/game platform with around 200 employees. Also instructive: Most of Second Life's revenue comes from private landowners, meaning about 5,500 people provide most of this money, while almost all of Minecraft's revenue comes from individual players who paid to register their copy. (In the first 15 months, about 5 million folks, give or take.)

While this point might seem like a slam on Second Life, I'm actually making it to say there's good news for SL:

The success of Minecraft proves there's a very large market for open-ended sandbox games with less than next generation graphics. I'm fairly confident a version of SL that was tweaked to be a bit more like Minecraft (a more game-like UI, collision physics and the possibility of death, and so on) and marketed along those lines could capture a decent percentage of Minecraft's audience. For that matter, I bet a third party viewer developer could do that too, linking a TPV tweaked to run more like Minecraft to a cluster of SL sims set to operate on Minecraft-like rules. Anyone for a Kickstarter?

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Image credit: Tilt shift photo of Minecraft from cresty.tumblr.com.

 

Comments

[Pussycat Catnap]

I think we're seeing this shift already.

Granted there's only so much time to get on the horse before somebody else rides off with it.

But, given that meter per meter mainland is more profitable; we're seeing an effort to get more people onto premium accounts.
- every 49.2 512m only premium accounts (at the annual rate) is equal to one private land single sim. Its a lot easier to get people to sign up for just 6/month. And if they pay monthly, it takes even less of them to do it.

This is a slow and gradual shift out though - but a look at linden homes suggests people are taking the bait. Went to get one last night (I've got 1400m unused, so I figured why not) and found there were very few left.

A single Mainland sim can be 62% -empty- and still make, off of such premiums, what a single estate makes. With larger landholders, it needs to be a little fuller...

http://catnapkitty.wordpress.com/2012/03/14/mainland-versus-estate-which-is-the-better-bang-for-your-buck-to-linden-lab/

Now add in the shift to Marketplace - this is LLs monetizing every transaction we do. An attempt to make them even less dependent on those 5200 customers that own private sims.

Finally, the linden exchange. Once folks get their weekly stipend and discover the things they want to buy are 1L more than they got that week... they start using the exchange. Or they work in SL, and somebody else who used the exchange buys their goods... LLs takes a portion of this as well...

But the really kicker... the shift to a mainland focus... that is what will save SL - making it more like the other micro-transaction virtual goods markets.

Profit comes by being Walmart - lots of small buyers all competing to be more fashionable than each other, and all wanting their own little spot of YoSLVille, and not the estates who need handholding and can kill you when they bolt.

This is why McDonalds is a worldwide major corporation that can dictate the food politics of entire nations, while "The French Laundry" is just an exclusive small restaurant in Napa that has a 1 year waiting list for a table, but can't even buy a city counsel vote.

[Arcadia Codesmith]

It's a little off-topic maybe, but I'd love to graft SL's support for (and monetization of) user-generated content onto a sandbox MMO, if for no better reason than to wave it at the major studios and yell, "See? It WORKS!"

The Lab might be able to make something like that work, but not without some industrial-strength optimization to make it run like an MMO.

[Metacam Oh]

Lets not forget some huge things here about Minecraft that you leave out, that Linden Lab is deathly opposed to.

1) You can run your own public minecraft server off your own computer for free.

2) unlimited land to build on

3) unlimited potential through modding

Yeah, Linden Lab is never going after that market.

[shockwave yareach]

What makes you believe that most of these players in Minecraft have NOT tried SL or given it a chance? You think none of these folks have played in SL and been screwed over by the lab once already?

[shockwave yareach]

@pussycat - My group originally bought half a mainland sim. We had too much lag to even walk right, and not all of our neighbors were as friendly as our group was. So we bought an island chain and that as they say was that.

I've been in the Sunweavers since founding. I would never consider moving back to mainland, no matter whose islands I would have to rent upon to avoid it. While mainland may be cheaper, you get what you pay for. Or not get what you pay for, as seems to be SOP for LL.

[Desmond Shang]

I've put up a minecraft server for the Caledon community, and so far it's been absolutely wonderful.

Was concerned that it might harm the "SL" side of things, but instead it seems that most people play other things than SL typically, and it's been using up their 'non SL' online time most of all. It's been a fantastic perk for those already playing. So far I've allowed access to those who rent in SL, plus a few friends of each renter, to no ill effect.

These are still the early days, but I'd be totally surprised if other SL estates don't add this perk eventually. Not being Linden Research, it's a *very* easy perk for the land barons to add. Far less nonsense to deal with, when compared to say, offering an opensim server as a perk.

Another way to think of it: basically if there's any way to add even more value for the tier paid, some of us will jump to do it. And I'd do it again if something else like it came out.

[Pussycat Catnap]

"@pussycat - My group originally bought half a mainland sim. We had too much lag to even walk right, and not all of our neighbors were as friendly as our group was. So we bought an island chain and that as they say was that. "

One bad experience is not everyone else's bad experience.

Right now there are a -LOT- more mainland customers than private sim owners. The more the ratio goes in the direction of mainland, the better for LLs.

But because the pool of them is so large, it is much easier to find bad cases.

5500 people own a private sim. That's it. A few of them own a -LOT- of sims. (I think I mistyped 5200 above)

67,000 people own a plot on mainland.

The thing about being a Walmart is that you can make a big fuss about the person who got a t-shirt with a hole in it.
BUT THEY DON'T COUNT. Statistically - one person there is meaningless.

They only count as much as they get vocal and hurt your reputation.

But factually, if you deliver 1 bad t-shirt, you still delivered 999,999 good ones.

The thing about being Christy's auction house is, if you sell even 1 fake faberge egg... its making world news.

I'm not saying you're alone. But even 48 folks on mainland who got bad spots and didn't know how to deal with it, is less of an issue than 1 estate going south.

Of course you do have to know how to manage image - because one voice is still one voice and the person making a stink over a bad t-shirt can still cause you a problem in reputation.

But if you look at it with some perspective, there are a LOT of good and well performing spots on mainland.

[Cio Koba]

Ur right, I live in one.

[Desiderii]

I've attempted SL several times over the last handful of years and every time I try it, the lag is prohibitive, the graphics never ended up actually loading, and there has been no entry vector for me to start participating in the community in any meaningful way.

Now, I would be willing to say it was a fluke, but this was on multiple connections on different iterations of gaming rigs I had built for other MMOs. I'm used to my avatar responding when the arrow keys are pressed. It's like swimming through molasses otherwise.

Part of the thing that makes Minecraft attractive as a sandbox is that it's accessible from a technical viewpoint. I can load up the client and wander around a responsive world. In all the times I've tried SL, that has never been the case.

[Nyoko Salome]

minecraft?? i'll say this much... i bought a single play license last year and played with it for awhile...

while it is awfully intriguing in 'safe' mode, with its sweet little music and sweet private time just diggin' into the ground...

i eventually had never reached such a conclusion, such a feeling that -i was wasting my time...- ;0

but i guess that it is just somehow crossing my lines just enough that it feels kind of pointless. fun, but awfully pointless... nifty though learning 'redstone circuitry'; i do think that kind of helped re-energize me for sl programming... :)

[Tateru Nino]

I've seen no indication of a shift in that direction by the Lab. I don't actually even see why they should, except for a one-off product.

Right now, the market is crowded with dozens of Minecraft-like products going through Alpha and Beta. Some are high-quality and most are free, and many are looking for a slice of that big money.

I don't think it would be a smart idea to try to compete in that arena.

[Ezra]

If you understand mainland is divided up into parcels with separate owners footing the bill, understand the same about private regions. There may only be 5,500 or so private region owners, but there's tens of thousands different subdivided parcel owners and homestead renters that pay them so that they can pay Linden Lab.

As for going after Minecraft's "market", the odds are against even Mojang in ever repeating Minecraft's success. So how much sense would it make for Linden Lab to create a product dependent upon meeting Minecraft levels of success?

To me looking at Minecraft's success and thinking its realistic for a similar product is the same as believing WoW's success is repeatable, Facebook's success is repeatable. When you have a lone success far ahead of the competing similars, its more realistic to expect success or lackthereof of the competing similars.

So how about a comparison of revenues from all the Minecraft-similar games? 'cause that's what you're encouraging, Linden Lab create a Minecraft-similar game.

[Arcadia Codesmith]

But WoW isn't a pioneer in any sense of the word. WoW is the rich guy who buys up all the pioneers' homesteads, paves them over, and builds WildWestLand on top (slick, professional, plastic, brightly-colored and sterile).

Minecraft is a pioneer: crude, vibrant, amateurish, muddy, organic. If a major studio can hose off the dirt without completely destroying the magic, then their title will outstrip Minecraft just like WoW outstripped Everquest (and Everquest outstripped its inspirational MUD).

Bank on it.

[Ajax Manatiso]

LL has done a lot of stupid things, but it would be even more stupid to modify the game to emulate whatever is "hot this minute". You have to have a focus and stay with it and not change direction with any way the wind blows. That has been LL's biggest problem over the years -- shifting in focus at times and losing its true direction.

And as for lag, at least 99% of the time it is due to poor viewer configuration. If you land in a ballroom with 30 flexi gowns, don't have your draw distance at 300 meters and avatar cloth on, everything set at max -- and spin in a circle to make your HDD caching go nuts.

[Charlie B.]

Minecraft IS kinda fun, although i personally got bored with it. Minecraft is like a little piece of SL, and it's currently very hot in the public-nerd consciousness. Who thinks it'd be a good thing for LL to go and try to chase a hot meme?

They sold 5 million copies - and they made a bunch of revenue. How much money will they get from those copies this coming quarter or next year?

I hate the current interface to SLs content creation tools, and wish they could have been fixed. Honestly it's not hard, just a matter of getting a UX person, 2 viewer engineers, and some feedback from the different types of creators. Unfortunately other things always took precedence. i'd love to see someone at LL take the flows and give creators a more usable creation interface as well as a simplified one for simple stuff like arranging furniture and putting down building blocks.

[foneco zuzu]

And here i go again,no matter Linden Lab future, there always be a place where, even a few minority in ALL world will always be able to keep using that tool, it's called Open Sim!

[foneco zuzu]

http://www.hypergridbusiness.com/2012/03/education-dominates-private-hosted-grids/