Second Life Annual Revenue Likely Down to Around $50 Million, Based on Land Tier Payment Estimates -- Was $100M/Year in 2009

Tyche Shepherd, a Second Life user who's also a real life statistician for a renowned multinational corporation, has been for years carefully tracking the status of Second Life land and private islands, the core source of Linden Lab's revenue. A few months ago in her monthly reports, she quietly dropped this pretty large bombshell (captured above):

Tier has dropped to at just under US$3M for the month. Additional monthly revenue from 30K Prim Full is ~US$18K.

Her report last week is consistent with this trend. Basic math means that's around $36 million a year. The company has told me before that tier payments account for about 80% of total revenue (the rest earned from monthly Premium accounts and other sources). Assuming that's still the case, we're safe estimating Linden Lab now earns around $50 million, give or take.

Which would be pretty amazing, because:

• In 2009, Second Life annual revenue was forecast at $100 million.
• In 2010-2011, Linden Lab was reporting annual revenue "exceeding $75 million a year".

And now we're closer to $50 million, which would mean revenue cut in half in 7-8 years. Which would also likely mean this: Sansar's success is do or die for Linden Lab.

(I checked my estimate with Linden Lab and Tyche, of course, and will update this post if I get a reply.)

Comments

[Carlos Loff]

Opensim has now some fine prifesdional grids, like Kitely and Digiworldz, so simple users may still be attached to SL friends and venues but world builders and product creators are flocking to Opensim, enjoying many advantages over SL like much cheaper lanfs, much better performance, entire worlds backups (OARs) and a mire friendly and helping core community - The only thing still needing expansion in Opensim is - more peiple and friends and also mire priducts for sale

[Clara Seller]

Increasing prim limits was a good thing LL did. But it wasn't enough for the long term. I own a parcel of mainland in an old water area and I rent a homestead from a land baron. The mainland area is stuck in the past like a dumpster of ugly prim builds and faded terrain. I'm amazed that people actually pay money to keep their stagnant trash can alive. I had a great deal on the homestead and my tier has recently jumped 25% to not such a great deal. In my search for alternative private land I see an increased consolidation of ownership and a coordinated effort to turn the prim increase into a profit tool for the barons. They are turning more for less into less for more for the little guy. Throw away that big home and rock your tiny cottage is popular. Come on, LL. The customers that are here to spend money and not make it are being squeezed like an old dish rag just like in real life. The model for Sansar is looking to be more of the same. Profit is king and monopolies rule.

[Calla Cela]

I have been in Second life since 2005 and been a content creator and land owner in West Haven since 2006, but SL has made it harder and harder to create content. I am concerned that SL is tearing itself apart with Sansar. Why should I abandon thousands of US dollars, not Lindens in my creations to start over? I think that Sansar will attract new people and leave Second Life full of ghost towns.

[cam]

Who knew a ski school grad could lose 50 million so easily?