After Brief Bump, Second Life Private Sim Loss Returns

Last month we noticed an unexpected growth in Second Life private sim ownership (according to Grid Survey), which was nice, since sims constitute Second Life's core revenue. This month, however, all that gain has sadly slipped away:

In March, many over-enthusiastic SLers were proclaiming the temporary gain as an "Ebbe effect", attributing it to the entrance and leadership of new Linden Lab CEO Ebbe Altberg -- but were that the case, the gains should still be happening. Instead, this return to the status quo shows what's really going on:

Private sims are unsustainable as a revenue model, unless and until Second Life sees strong growth of heavily engaged, highly monetized users. (And even spectacular growth would just staunch the bleeding: Private sims costing hundreds of real dollars every month have inherently impossible economics to sustain.) So while they mean well, fans proclaiming an "Ebbe bump" are just setting up unrealistic expectations that cannot be met. Better instead to hope Ebbe bumps other, more sustainable revenue streams than private sims into place -- and bumps them right soon.

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Comments

[Iggy]

What joy! Back to doom.

I wonder if Ebbe had anything to do with this brief rebound. Didn't it begin before he stepped in as CEO?

We may never know why the decline plateaued. Soon enough we will be below to our lowest ebb-point, and I see no reason to suspect it will change from the slow decline of 2 or 3 sims daily.

Lower tiers and some love for the niche-users might help. CronoCloud Creeggan said it well in her comment to another post of yours, recently.

[Pussycat Catnap]

Actually is you look at that chart - its bumping up and down. If he were to have posted this story on the 13th, he'd be saying "its growing again" yet again.

We're just in a sinewave now, and depending on what time of day we open our eyes and look outside - the world is either doomed to eternal darkness or bright and sunny.

[Ciaran Laval]

The decline seems to be back but that's not that surprising as the growth was weak.

However the decline is still a hell of a lot slower than it was 12 months ago, year to date loss is 0.6% at this point last year it was 3.1% and the year before, 3.8%.

However I agree that tier model is not sustainable as it stands, LL need more products and they need more revenue streams.

[Ezra]

Considering they didn't roll out any solution to their problem, why would the problem be solved?

They charge too much, and should charge less. Simple. The millions flushed down the drain on Rod's non-SL experiments should've went into doing whatever technical needs to be done to offer region ownership cheaper.

[Teddy]

I had to let my sim go after a good half a decade or so recently. $295 a month is ridiculous... dare I say, completely obscene, for what you get.

[Cube Republic]

If sims were cheaper there would be more content sales and the lab could get more pie. It's ridiculous in 2014 to be charging 295$ for a video game. Land enables expression, expression needs content.

[cathartes aura]

The uppity ups @ LL and the SL insiders refuse to acknowledge and admit that the "Atlas Land Program", grandfathered tier, and other 1%r goodies are at the root of LL/SL's many many self inflicted wounds.

The average Joe SL business/region owner just isn't willing to keep paying tier into a system that they know is corrupt, rigged against them, and unprofitable except for the 1%r's.

Flush "Atlas", end grandfathering, and equalize tier among all region owners as a first step. Embark on a series of cost cutting moves that will lower tier to a reasonable amount and things may change for the better. LL and the 1%r insiders will never do that. It would take them admitting they failed miserably up to this point. And that they will never do.

[Mexi Lane]

$ 295 per month + premium account and are two days that my avatar is locked without resolution IMMEDIATE by LL.

[Metacam Oh]

I can lease a brand new Cadillac for the price of a Second Life sim.

[Pussycat Catnap]

Yeah but...

What sane person under 85 would want a Cadillac? Have they even made new ones since 1965? Are they able to drive above 30mph on a freeway or 15mph on a city road, because I've never seen it.

:p

[Shockwave yareach]

I can afford a LOT of very nice RL stuff for what it costs to have a sim in SL. And I don't have all the problems or limitations OS SL either. Which is, in fact, where my money and time have gone to the past 18 months.

Problems to solve in order of priority:

Cost of owning land
TOS giving all ownership of UCC to LL
Marketplace eliminating need for land
50 person per sim problem

Neither the builders nor the play crowd can afford this anymore. You can lower the price in half, and quadruple land sales for a gain of double income. Especially if you correct the marketplace so that people can't sell there without inworld stores as well.

[John Pathfinder Lester]

I'd go for the 2014 Audi A4 Premium.

https://newcarsuperstore.com/portfolio/2014-audi-a4-premium-lease-special-295month

[Iggy]

Restored '67 Pontiac GTO 400 c.u, 4 bbl Posi-Trak: $30,000.

Or 8 years of tier for pixels. I'd take the GTO.

[Guni Greenstein]

Summer is coming, which always brings a seasonal slowdown. Even in a scenario of Second Life returning to a slow growth path again we should not expect growth of land mass between April and September. A moderate loss of sims in contrast to a steep loss during the same period in 2013 and 2012 would already be a quite positive sign. Lets not read too much into these stats yet.

I still consider the mean weekly concurrency rates a more meaningful indicator, especially the year on year comparison of concurrency rates.

Second Life will, however, go down the drain if Linden Lab will not manage to substantially update it soon. Between High Fidelity and whatever Facebook/Oculus might come up with you can not stand still much longer and count on an existing network effect.

[CronoCloud Creeggan]

Yeah, the decline has flattened from what I can see, we're seeing the usual seasonal effect. I do wish the concurrency was higher, then again, since SL seems to have worse performance when it is high, maybe not. I think tenant occupancy in the steamlands is good (though not as good as it was)...for now anyway. Desmond Shang would know for sure about that.

What I wish LL would do is to up the premium base tier allocation to get rid of some of that empty mainland.

[Bob Sutor]

We are talking very small numbers here. Be careful about reading more into these minor changes than is statistically warranted.

In any case, SL regions are too expensive by an order of magnitude. Given the dropping costs of running other software in the cloud, regions are not worth the value gotten, especially when compared to the glacial pace of innovation in the SL platform.