Second Life Private Sims Slip to 2008 Levels (But That's OK)

This is the picture of an old majestic ship slowly sinking while the crew scavenges the hull to build an entirely new vessel:

It is, of course, the current state of Second Life private sim ownership, the core revenue source for Linden Lab -- which, as data expert Tyche Shepherd reports, has now slipped to below 2008 levels, when Second Life was riding high. (Infographic from her indispensable Grid Survey site.)

Now ordinarily, this news would lead to a lot of outrage and yelps of terror among hardcore SLers, but as I said last week, we now need to look at this loss from a totally new perspective:

The development of Second Life 2. While Second Life revenue keeps slipping, it's slipping slowly, but that means 2-3 years (easily) in which there will be more than enough profit to build, launch, and sustain SL2. Second Life will probably always have an extremely hardcore user base (probably aroound 150,000) that will never leave, and so it'll go on long after SL2 launches, with only a skeleton crew to guide it. But by then, hopefully, a gleaming new frigate will be collecting new passengers.

And no, now we know for sure that there will be no substantial discounts of existing Second Life sims -- because not only would that kill Linden Lab's profit margin, it would probably prevent SL 2 development. So sail on, Ebbe, sail on!

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Comments

[A.J.]

Hmmm....

Maybe I'm on drugs, but I'd think with the recent announcement of SL 2, shouldn't we be seeing a little bit of a bump in interest in SL?

I wouldn't assume anything right now.

It would be terribly arrogant of LL to take their customers for granted when the're gambling on a new world that could end up being some virtual swamp land in Florida.

[Iggy]

Theory: the OnLive pricing model will replace tier for SL2. But LL will need a lot of us to keep the cappuccino flowing and nerf-gun fights going.

Educators would not come in w/o free access for students, either. It would be the kiss of death for student evaluations. But SL was never meant to be edu software.

[Rose Mackie]

I just know that I am no longer interested in creating content or financially supporting SL1

[zzpearlbottom]

Sadly Rose, cause there are a lot of content still being created for Sl, the one that only in SL can be fully used, like Vehicles.
That being said, i wish you will reconsider building for Kitely marketplace or Inworldz.

[Arcadia Codesmith]

Purely on an anecdotal level, I seem to be seeing a lot more green dots on the mini-map these days (mainland).

I suspect part of the driving force is mesh. You simply don't need huge prim allowances anymore to make some really spectacular builds.

Linden Lab may remain committed to a revenue model based around private sims, but that doesn't mean the residents are. And that makes it a very shaky foundation to support a lengthy development cycle for the next gen world.

[cathartes aura]

Maybe LL should raise money for its new "just like SL 1.0 but better!" virtual world by eliminating tier related goodies for the 1%. Equalize tier pricing across the board for private estate owners and mainland. That would certainly raise huge amounts of revenue for LL's new project. If 99% of other land owning residents are paying full price for their region tier shouldn't the land barons contribute to building this "new world" like the other 99% of non-goodie getting resident land owners have been up to this point?

LL management is absolutely dropping the fiscal ball on this. Raise tier for the 1%. It's the very least LL could do for the rest of the resident land owners at this point.

[fluffedandfolded]

I think renters are disappearing in large numbers also. In Firestorm, the viewer I use, you can enable all sorts of land for rent info in the map. Do this and just scan mainland, lots of yellow parcels on there, more than I have ever seen at any given time.

I think the worst possible thing has happened: the magic is gone. I hate to be a negative person about all this and I would love to see SL thriving in the same way it was in 2008. I fear that the Golden Age has indeed passed for Second Life.

Maybe SL2 can recapture that in a new different way. We will see.

[Issa Heckroth]

I know its too early to tell, but the few merchants and barons I have talked to have all noticed a dip in commerce above and beyond what is "normal" for the time of year.

[Ezra]

Lotta resting on laurel assumptions here. Like, no viable competition will appear in the next 2-3 years, that growth is the only thing that happens on a curve and decline is always predictable and linear.

SL2 is a huge gamble that has to work or Linden Lab is toast. Shrinking region counts and mass hirings of tens of people and counting isn't a good match. I like this gamble much more than Rod's failed experiments however. But it isn't guaranteed Second Life won't see viable competition in the next two years ahead of a SL2 release, or that Linden Lab will get SL2 right and users will want to use it.

[The Tier Is Too Damn High Party]

Capitalism can resolve LL's difficulties but that would require the kind of outside the lines thinking LL seems dead set against trying. And since they haven't learned from SL losing both residents and sims, there is every reason to expect LL business model for SL2 to be more of the same, regardless of SL2's charms.

[Account Deleted]

Do you still draw a paycheck from the lindens hamlet?

This is close to madness to say "with only a skeleton crew to guide it. But by then, hopefully, a gleaming new frigate will be collecting new passengers."

Yes keep paying $300 a month for $5 dollar server space then when ready come on over,

You really feel sorry for the board of bankers who own linden lab, hamlet?
Those who have so many millions who will never know what struggle is, who come from a wealthy family lines who will never know what making ends meet means,
But it is ok for the game addicted poor people to spend everything they have to help your millionaire friends?
The same millionaire friends who had no trouble withdrawing millions of dollars over the years and now the residents should be forced to pay for it?

Ebbe has already shown very poor leadership and linden lab is still a dictatorship.

If the people want true power they should stop spending money and time in SL and let the bankers pay for the new grid,
Vote with your wallets & purses folks & prove your not the mindless game idiots the lab pegs you to be.

[Account Deleted]

@cathartes aura

"Maybe LL should raise money for its new "just like SL 1.0 but better!" virtual world by eliminating tier related goodies for the 1%. Equalize tier pricing across the board for private estate owners and mainland. That would certainly raise huge amounts of revenue for LL's new project. If 99% of other land owning residents are paying full price for their region tier shouldn't the land barons contribute to building this new world like the other 99% of non-goodie getting resident land owners have been up to this point?
LL management is absolutely dropping the fiscal ball on this. Raise tier for the 1%. It's the very least LL could do for the rest of the resident land owners at this point.""

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Greed is all it is and who is to say after all these years the 1% Elite Residents who get these 50 to 75% discount deals, Greed & lies,

We should be excited to have to pay $300 a month while an Elite Resident pays only $150?

You can bet those same policy's the linden bankers have now will be handed to the new 1% Elite Residents in 2.0

There will be an elite 1% Elite Residents in 2.0
program in 2.0 as land or commerce or in same form but unlike this time it make be years before details of who is an elite resident or the kinda insider trading deals they get,

The new boss is the same as the old boss.

[Hamlet Au]

"Those who have so many millions who will never know what struggle is, who come from a wealthy family lines who will never know what making ends meet means, But it is ok for the game addicted poor people to spend everything they have to help your millionaire friends?"

Actually the vast majority of SL sim owners are land barons, and are millionaires themselves (in many, if not most cases). So in plain terms, those *are* the folks subsidizing SL2.

[cathartes aura]

@Hamlet... The 1% are not subsidizing SL2. The 99% are. The 1% don't pay the bills for LL. the 99% do through in-world purchases and rents paid to the land barons. The land barons are just unnecessary middlemen that parasite off the 99%. ; )

[fluffedandfolded]

@ The Confessor

Seriously. Stop. If someone is poor and is spending their money on or in Second Life despite that major fact, that is no one's fault but the person spending the money.

What you are really saying is that poor people can't think for themselves and decide where their money goes, essentially. That is very offensive on it's face.

Having money in RL is not a crime. Neither is not having any. Everyone makes their own choices in life, that's what it boils down to. Anyway, back to regularly scheduled programming.

[Ezra]

"Actually the vast majority of SL sim owners are land barons, and are millionaires themselves (in many, if not most cases). So in plain terms, those *are* the folks subsidizing SL2."

Source? (an 8 year old article on Anshe Chung won't be a sample size large enough)

[Ezra]

"The 1% are not subsidizing SL2. The 99% are. The 1% don't pay the bills for LL. the 99% do through in-world purchases and rents paid to the land barons. The land barons are just unnecessary middlemen that parasite off the 99%. ; )"

Which is of course why the grid is shrinking, the vast majority are slowing up the welfare payments to the middlemen paying Linden Lab.

I don't think Hamlet thought critically enough about what he typed or he'd know that, rather than throw a paradox at people about why the grid is shrinking at all if apparently its a bunch of millionaires subsidizing the whole thing for fun.

[Val kendal]

"Now ordinarily, this news would lead to a lot of outrage and yelps of terror among hardcore SLers"

No, I don't think it would. I look at that curve and think 'Wow, its finally leveling out, 2014 has been a good year so far'. Could be worse, could look like the curve for WoW subscriptions.

The lights are still on, prims still rez, the end is not nigh. 'hardcore SLers' will stay in until they shut off the lights, and then I think LL will be surprised at how many will go 'meh, been there, done that' and choose not to follow them to the Promised Land.

[cathartes aura]

@Ezra... The SL 1% never cease to amaze me in their hardheadedness. They just will never admit they were wrong, are wrong now, and will forever be wrong about what drove SL into the ditch. They want it to be about things that have no bearing on why things are the way they are. They refuse to admit its the rigging of the entire SL economic system through the Atlas Land Program, reduced tier, grandfathered tier, etc. to the 1%.

They killed the SL golden goose, not us 99%'rs... ;)

[Desmond Shang]

Cathartes ~ I'm one of those evil old land barons with old tier, &c.

Here's a trivia question!

What kind of starter investment was used to build the delightful little empire of my estate?

a) one meeeeellion dollarz
b) one Hundred Meeeellion dollarz!
c) seventy two dollars

(jeopardy theme song plays)

... if you guessed: c) ... you are correct! That's right. Just one annual premium membership account in 2005. No sekrit millionz required. Surprised?

* * * * *

I'm very sorry that the Lindens decided to raise tier on everyone else in late 2006. I found it disappointing too. So here we are.

Just curious though, what would you have me do? Jack up rates on residents as if I paid full tier prices? Hmm, not very nice to estate residents! Maybe I should just... go away? Again, not very nice to estate residents. Should I just... give the estate to say, someone like yourself? All fine and good, except you would have to face the reality of survival in business... it would be a short lived experiment.

I do appreciate your concern for justice. In fact, I share it. It's just from a slightly different perspective. I could be wrong. Could you?

I suppose this would be the wrong time and place to mention I still have unlimited Verizon mobile bandwidth, *and* a 4G phone. Oh, the raw inhumanity of... anyone with foresight! Justice weeps!

[cathartes aura]

@Desmond... So, you and other 1%r's were able to benefit since 2006 from a rigged SL economic system. Congratulations... You and the other 1%r's want your goodies, Atlas Land Program, reduced tier, free tier, etc. at the expense of the 99% and they/we are no longer willing to pay your bills for you.

That is why the loss of regions over the years and why SL is more than halfway into the ditch. It's folks like you and your selfish and greedy attitudes that are the main reason for SL tanking. Once again, Congratulations 1%r.. You killed off the SL golden goose for everyone... ;)

[Account Deleted]

@cathartes aura

Best to contact the State of California Department of Justice
Office of the Attorney General

Or The FBI cyber Crimes Division, just remember your reporting only goes as far as your detail/facts and who else can testify to the same facts.

This has merit for a class action civil suit on behalf of all residents for long term fraud but that is not my goal but open to others to explore,

Inform them of the violation with details of when/who/all the facts you can gather then submit,

This is no different then going to a casino to pay a hand of blackjack but several at the table have the cards stacked for them while putting you at a disadvantage,

It is all fun and games and borderline legal what the lindens have done, but, the cash out and federal tax's for these big 1% is gains thru fraud while not direct fraud on there part it is part of an organized system that attempts a scam to cheat the majority with huge disadvantages.

There are no notices to past or current residents that 1% is giving a huge advantage that at cash out time amounts to millions of dollars and again becomes federal thru the IRS,
Nothing in the TOS that states it,
Nothing about secret contracts that stacks the game against most residents

We can complain here but again this site is stacked in linden labs favor while never really being heard by anyone but mostly supporters

I love SL and all the great stuff just not the mafia type system behind it,

I am working with several state & federal senators to submit a new bill...
Virtual Worlds Accountability Act. 2015 (VWAA)
This would force any type of online (game) into the same rules of trading for publicly traded companies while placing over site thru a branch of government for mentoring and over site enforcement that would include fines & penalties
for current ..and past fraud

I will be in the capital this monday to testify, while those others will decide if the current fraud has fully broken laws with a need or not to refer it to a grand jury for further considerations.

9-110.310

Considerations Prior to Seeking Indictment
Except as hereafter provided, a government attorney should seek approval for a RICO charge only if one or more of the following requirements is present:

RICO is necessary to ensure that the indictment adequately reflects the nature and extent of the criminal conduct involved in a way that prosecution only on the underlying charges would not;

A RICO prosecution would provide the basis for an appropriate sentence under all the circumstances of the case in a way that prosecution only on the underlying charges would not;

A RICO charge could combine related offenses which would otherwise have to be prosecuted separately in different jurisdictions;

RICO is necessary for a successful prosecution of the government's case against the defendant or a codefendant;

Use of RICO would provide a reasonable expectation of forfeiture which is proportionate to the underlying criminal conduct;

The case consists of violations of State law, but local law enforcement officials are unlikely or unable to successfully prosecute the case, in which the federal government has a significant interest;

The case consists of violations of State law, but involves prosecution of significant or government individuals, which may pose special problems for the local prosecutor.

The last two requirements reflect the principle that the prosecution of state crimes is primarily the responsibility of state authorities. RICO should be used to prosecute what are essentially violations of state law only if there is a compelling reason to do so. See also the Criminal Resource Manual at 2070.

[cathartes aura]

@Account... It just isn't worth it at this point for most of the 99%. IMO LL, the VC's, the 1%r's would rather see SL completely fail, then to admit that they were wrong, are wrong, and will forever be wrong about the goodies they have come up with for the 1%. And it seems that they haven't learned from their past bad decisions and will continue to make bad decisions into the future. Will SL 2.0 be an entirely new system to rig on behalf of certain folks?

If SL 2.0 is rigged in similar ways to benefit a few at the expense of the many, with special "deals" for certain "friends" then it is DOA. A dead duck...

What I find funny about all the nonsense surrounding LL/SL is the fact that LL, the land barons, and the top creators all think we aren't aware of all the goodies they get. We know that you know that we know, so cut the crap... ;)

LL is giving the 1%r's a minimum 33.3%+ business advantage in just tier alone over their competition... No one will invest in that type of rigged system once they find out about this kind of nonsensical garbage. That is what has been happening over the years - the 99% giving up on SL because it is rigged in favor of the 1%r's. ;)

[Kyouko]

Account Deleted << A wise decision! :)
I think this guy needs professional help.

[Desmond Shang]

Well, let's say you are right for the sake of discussion, Cathartes.

I would like to point out that none of this is new, or particularly secret. 2006 was *eight years ago*. Anyone ~ I repeat, *anyone* who has simply hung onto a region that long has the same tier rates as I do.

Well, except for nonprofits/educational. Their tier rates were even lower for a long time.

You could call this a pattern of behaviour with me, though! I'll share tidbits of my long, troubled past:

Exhibit A: I use online restaurant coupons. Those put a mere 33% tier discount to shame!

Exhibit B: Judicious planning when buying airline tickets. The poor souls who bought at the wrong time can be paying nearly double what I pay. Pure evil, manifest!

Exhibit C: I buy (relatively) expensive shoes that aren't shoddy junk, getting about 200 or 300% more per dollar that way. Anarcho~capitalism at work!

Exhibit D: Bought house in 1991; mortgage is less than 900 a month in a neighbourhood where renting out easily brings in three or four times that. When will justice be served!?

Exhibit E: Still have unlimited Verizon internet on four phones, on non business lines. The travesty!

I could go on. But it's clear that I'm an unrepentant long term strategist with no hope of rehabilitation. Yes, I must be stopped, or this pattern will persist until my dying breath. In fact, I'm getting hungry, and eyeing a stack of fast food coupons *right now*...

* * * * *

... Desmond slips off into the night, to get a chicken sandwich cheaper than what the guy in the car ahead of him is paying...

[zzpearlbottom]

My 2 cents on land and Sl.
Nobody but a few should have private regions, those would have to rent at least a minimum of 100 sims.
All the rst could only rent form those or being premium be in mainland that where the owners of private sims could not buy.
Private states should be linked at least in a sim to any mainland continent.
This way, any could rent on private states but would have to comply with covenant rules.

[zzpearlbottom]

The above is a dream to any explorer, sailors or vehicle user traveler.
And of course a major rule would be in place, none of the private states could be closed ones, they would have to allow entrance of anyone that would conform to covenant rules.
On mainland Tos should also be revised to make sure that eve if all would have the freedom to do whatsoever with their land, it must be open access.
To maintain privacy, any could still use the option to not let avatars in other parcels see and chat, but there should be also the option to close the region on just a small part of it.
That would ensure anyone desire to be in private without stopping travelers from crossing it.
To deny the importance of a grid where any could explore freely, without having to worry about ban lines and security orbs is not paying attention to what is happening in Inworldz.
As for the rest, those who don't give a sh... about any but having their regions where they will want to do whatever, LL could still offer private, closed bordered sims, at a price for sure much higher then the one offered to the ones that would have at least 100 full regions.

[cathartes aura]

@Desmond... So, you want a permanent tier subsidy paid for by your direct competition. You admit that you can't compete on the quality of your builds, or the superior customer service you provide. The only way you can stay in "business" is to receive goodies from LL that 99% of the rest of us don't get. You are a failure at "business", son. But a great success at being corrupt...

And you defend your goodies with a big finger in the air at the rest of us 99%'rs and a nyah nyah nyah... LMAO! You are your ilk are what is sickeningly wrong with LL/SL. You're getting yours at the expense of everyone else and due to the corrupt freaks who determine inworld policy at LL/SL. ;)

[cathartes aura]

@Desmond... So, you want a permanent tier subsidy paid for by your direct competition. You admit that you can't compete on the quality of your builds, or the superior customer service you provide. The only way you can stay in "business" is to receive goodies from LL that 99% of the rest of us don't get. You are a failure at "business", son. But a great success at being corrupt...

And you defend your goodies with a big finger in the air at the rest of us 99%'rs and a nyah nyah nyah... LMAO! You are your ilk are what is sickeningly wrong with LL/SL. You're getting yours at the expense of everyone else and due to the corrupt freaks who determine inworld policy at LL/SL. ;)

[Observer]

The ones that pay top Dollar for their regions and where Linden Lab gets their profit is slinking fast.

Anshe Chung owns 3000 private islands all grandfathered
RGF owns 1500 sims all grandfathered
Weezle Real Estate owns 700 private islands all grandfathered
Zoha owns 850 private islands all grandfathered
DSE owns 750 sims all grandfathered
Lala rentals 400 sims
Fruit islands 400 sims

That is just a couple and you are over 7500 sims of the 19000 private sims already who all profit from the special friend deals. There are even more estates getting these special friend rates not in the list so you can be sure that over 50% of private sims receive special friend rates from Linden Lab or bulk rates that nobody else can know about.

The devision between full sims and homestead islands is about 50/50 these days
There are also a large amount of educational sims on the grid receiving a 50% discount rate.

About 50% to 60% of the 7000 Mainland sims are empty.

When you calculate the income of 10000 private islands that Linden gives special friend prices for you get this:

5000 full sims at 200 = 1 million USD per month
5000 homestead islands at 95 = 495000 USD per month

That is half of the private islands that only brings in 1.5 million per month which is not spectacular.

This demonstrates the huge corruption going on at Linden Lab and shows what the company is all about. The latest sheme is to jack up price (remember Jack, we all remember Jack don't we) by enabling illegal gambling yet again under the motto of skill games. This time you just need some sleazy lawyer making up documents for you.

The ship will sail indeed, right to the bottom of the ocean. I doubt Altberg will be the last one to get out.

Those little African countries based on a regime of fraud and corruption also manage to do that for a decade but for some reason it always ends with the fall of the regime.

[Shockwave yareach]

Zzpearlbottom

When private sims are made so that only giant outfits can have them, almost all the groups and role players will take the money they are paying now and leave with it.

Ll has one thing it can sell -- fantasyland. More and more they make it hard to get, and people have been voting their displeasure with their feet. When you tell people they can't own private parcels anymore, but have to either pay extra for a landlord who can poof at any second, or suffer on mainland they don't want, they'll respond by walking off and taking their money with them. lL has a very long track record of doing opposite what the paying customers want, and thus their failing fortunes are solely their own fault. Nobody stays in business by telling customers to p@@@ off and ruining the product.

[Desmond Shang]

" So, you want a permanent tier subsidy paid for by your direct competition."

Let's look at the actual market. Here is what my competition has. Not even my words, but words of someone as unhappy about the state of things as you are:

"That is just a couple and you are over 7500 sims of the 19000 private sims already who all profit from the special friend deals. There are even more estates getting these special friend rates not in the list so you can be sure that over 50% of private sims receive special friend rates from Linden Lab or bulk rates that nobody else can know about."

So... roughly 50% of ALL private regions are old tier, exactly the same as I have. My *direct competition*. That doesn't make me a "1%" anything. Who knows what the exact figure is, but I suppose it sounds rather lame to call people "17.85 percenters" or whatever the real number is. 17.85%er, woooo, I'm in the VIP club now, baby!

Yeap, I'm really sticking it to those guys with the 10,000 *other* low tier regions, somehow. Just keep telling yourselves that.

* * * * *

I wonder how *actual* real estate sits with you guys. There are some old ladies with paid off houses in San Francisco. I need to share your viewpoints with them and explain why they are so corrupt, corrupt I tell you! Because they bought homes there in the 1950's... so sinful!

[CronoCloud Creeggan]

Lets not forget about those corrupt folks who joined SL early enough to qualify for the L$500 stipend. They can pay $72 per year for a premium account and get back $105 worth of L$, in addition to a 512 tier allotment or Linden Home, premium gifts, and access to premium support.

How dare they, corrupt 1%ers that they are.

Why, they might even take that L$500 and put it into one of Desmond Shang's meters. The shame!

Look, all you have to have done to get the rate Des gets on "some" (Not all) of Caledon is to have bought the region at the old rates and KEPT it. Anybody who has an old region that they have held on to gets those rates.

As for builds, Des doesn't provide builds, builds in Daledon are by the renters, not Des. As for customer service, Des treats his renters fairly.