Signs of SL Recession: Despite 30K Users & $300K in Transactions, Second Life Shopping Delivery Service Pocket Gacha Closes

Pocket Gachas, a HUD-based remote delivery system for Second Life's hugely popular gachas, was attracting thousands of users immediately after its launch last year, but in a sign of a shaky or rapidly changing in-game economy, the service just announced its closure:

There is no doubt as well that SL commerce is changing. The boom-boom days are long in the past. While perhaps the top 1% of brands might still be doing fine (though I’m certain not selling what they once were) the new and emerging brands are finding it harder and harder to connect with shoppers. The drastic drop in new users in SL and an inability to retain these avatars has led all of us to this juncture. In some ways we have reached the point where we are just selling sneakers to each other. Or, to better quote the old adage, “delivering pizzas to each other.” Because, really, how many sofas can one own after years in SL? The people at Linden Lab are smart. I am sure they know this as well and are working on solutions. Let’s all hope.

The finale to this perfect storm is that the world of events is becoming saturated to the point of being destructive to one another along with the brands that try to balance doing them. While the old-line events may thrive to a point (I think, again, not like they once did) new ones arise it seems each and every day and SL is starting to feel like a town of 50K people that has built 50 shopping malls. It’s just too much for the current market.

This closure comes despite Pocket Gacha and a related HUD being used by a reported 30,000 unique users transacting over $300,000.00 "DOLLARS…not Linden!" across the service.  What Pocket Gacha lead developer Oobleck Allagash tells me suggests a larger economic trend I've also noted elsewhere -- less emphasis on virtual homemaking, and more on Second Life as a social media experience:

"That shopping is being affected, especially in the area of Home and Garden, due to a minimal amount of new users and a lessening interest in creating sim builds," as he puts it. "After all, how many sofas does a 10-year old avatar need? Photography has been a saving grace to a point but at levels nowhere near what we saw a few years ago."

In other words, as more and more of the Second Life experience is shifted to virtual fashion/lifestyle screenshots and video on Flickr and YouTube, there's less need for virtual land, and less need for housewares to furnish that virtual land. All that remains is what's core to the user -- their avatar, and their avatar's appearance (clothes, mesh bodies, poses, etc). On the plus side, Pocket Gacha doesn't need to worry about any upcoming EU gambling regulations that will likely impact virtual world gachas.

Comments

[Chic Aeon]

I definitely agree with the overall comments.

I definitely note a decline in events; it would be difficult to miss, and yes, I agree that the "top" venues are likely hurting just as much as the second tier (my territory). It is easy to see simply by the list of the new folks being invited in *wink*. I also know several designers who are doing venues below their previous station -- which personally I think is a very bad business decision.

Events ARE shrinking (I do count) for the most part, many have closed this year and yes there are still folks starting up new ones. I do believe a paradigm shift is in order once again. H and G has undoubtedly been hit the hardest. Several folks that have been around for years are closing or "taking a break". This in itself isn't new of course; people come into business and leave all the time. Still, these are folks that I know and that seems to make a difference.

I will say that every "obvious" observation usually has an exception and I know of one event of many years that is doing as well or better than ever before. Kudos to that owner!

I am not sure however about that "top 1% of brands still doing well" -- unless somehow I missed my elevation to that status (doubtful). This is currently my best year ever in SL -- and that's ten plus on the calendar -- and this summer was the best summer also. I have been working hard and learning new skills and improving my wares, sure -- but I have always done that. So, something else must be going on -- honestly I have no clue.

One thing that I see in blogger mode is that a lot of designers are either bored, tired or giving up as many of their releases in the last year are less than notable, some with issues. Not all, certainly, but more than I am happy about.

There have been plenty of pivotal points in SL fifteen year history and the sky has been falling many times -- or at least the chatter had that assumption as truth. I am just here to enjoy and watch what happens. Perhaps some of the burgeoning land changes will quick start interest once again.

Fingers crossed.

[Clara Seller]

It wasn't long ago that there was a very strong opinion that residents just needed
to swallow the $1.50 Linden purchase service charge and just budget better. No big deal. I'm sure that there is no relationship between wealth extraction and reduced spending from consumers.

I haven't researched the status of new land sales from the last land discount offering, but my particular land baron has an ample inventory of available sims and has sent a few nasty notices scolding disappointed customers who were expecting major price drops in tier. This could be my experience only.

When the bottom starts into recession, it's time for the top to start investing downward if you want to keep the wheels turning. Draconian cuts and economic austerity probably isn't a good option for a world that comes with an "off switch".

[Mike Keaton]

What you see here is the result of ONE of Linden Lab's recent screw ups. You can thank EBBEEEEEEEEEEEE for this.

What happens when all the happy Gacha gamblers receive their bill from Linden Lab and found out their 100 Linden and 200 Linden purchases to play on these machines had a nice 1.5 USD or 371 Linden FEEEEE per transaction attached to it?

They had a ????? moment and instantly the fun gambling experience they had playing these machines went up in thin air. Naturally this has a massive impact on the spending economy in Second Life as a whole.

There is much more going on and it is not looking good. Very little buy orders on the Lindex versus massive sell orders are piling up. Again a result of EBBEEEEEE his latest blunder. You think a person responsible for designing a massive catastrophe named Sansar would step back and figure out for himself that this was not the job he should be doing but no.

Just think about it. 371 Linden $ just to get some Lindens.

Second Life has turned into a game of taxes and fees.

10 L$ texture upload fee
371 L$ Linden purchase fee
2.5% cash out fee
3.5% Lindex conversion fee
5% marketplace selling fee
Mesh upload fee
Tier fees

This is chasing consumers away. I see less people logging in lately. I think we can conclude that customers had enough of being screwed over with fees and are staying away.

[sirhc deSantis]

Not too sure that if, in a year, I had started something that took off that I would have been so open about close on a third of a mil (in real money!) flowing through with all the official interest in virtual currency...

[Susan]

I suspect that people are just finally having enough with the gatchas. They are a rip off and I'm surprised it took people this long to realize it. The whole Event thing got so blown out of proportion it's silly. There are only so many high quality designers and there are only so many new items they can create. There are way too many events, it is inevitable that some will close down. And I agree with Mike - the fees are way out of control. Something has to give.

[veralosle]

pocket gacha has a history of bad reputation by commenting in public on sl secrets against a photography sim on sl that the community likes...

[Clara Seller]

Mike Keaton said the ugly truth. If you spend any time inworld, you can smell the stagnation and the colors are getting grayer. I'm afraid it's more than just another bad day. It's probably time to start thinking about Hospice Care.

Residents can no longer support the cancer of the SL status quo, the giant blood-sucking elephants in the room, the Kings and Barons of Innovation who are desperately throwing poop against the wall and hoping something will stick. It's beyond absurd.

It makes me think about Will Burns recent thoughts on the Metaverse. I found it hopeful and convincing, but no, we can't do that. We need to get in a little box and stay small, so those in control can stay comfortable with their limitations.

What's that I hear in the wind? Is it "your world, your imagination"?

[Han Held]

I suspect Susan nailed it on the head. I avoid Gachas like the plague. Sell me what I want, or don't waste my time. If I wanted to play slots, I know where vegas is.

[Dream]

Pocket gacha was the only gacha you could but the hole fatpack and pocketshop was cheaper I rather have pocket gacha and shop gacha then the old ones the others ones are scamming people. People just wanba buy stuff not use a machine to keep teying to get it.

[Better then Ezra]

SLUniverse is closing!!!...the last of the biggest fan sites left devoted to Second Life is shutting it's doors!

Will the grid be next?

[Bet]

Being an old hand I now *try* to use the Lindex Limit system but is it basically broken. Says,for example, 4 days to buy at 261--but over a MONTH goes by --order never fills.

Since the service charge is $1.49 not 30 cents -I don't just shrug and buy at 259. I wait for my large order,I'm cheap,so I sit broke- not shopping-for weeks. Told support - was told- "Lindex is working correctly" ??? 4 days is not 6 weeks now ..... Am finding I really don't need to buy stuff, dropped some land as the tier became due....

And I have to say having Ebbe Linden saying he doesn't come into SL much (at the Town Hall)because he likes VR in Sansar much better was a company killer. WAY to go dude!

Yeah baby hang with 10 people in a money loser and tell your PAYING customers they are boring.

Sansar still doesn't have Apple access so I can't even see it.

[Han Held]

@Better Then Ezra
SLUniverse is dying, long live Virtualverse.one !

[Unhappy creator]

As a creator/merchant who running business in SL for over 10 years. Here's what I think. Sorry for my bad english, I'm trying really hard.

1, Events are cancers to SL. There are too many events in SL. They sucks your traffic and treat you like a slave always chasing the deadline. Events makes the life-cycle of a new product too short like never before. And the worst part you have to keep joining it. It generates a vicious spiral.

2, As the part of vicious spiral. It's pointless to spend a lot of works to make your product greater now, they are likely not bring more sales than your shoddy cheap stuff in events (And ppl are doing this already). The imagination part of SL is almost dead, not only because SL is like a supermarket now, but also hell a lot of risk if you want to make something unique.

3, Lacks of administration and management. Cheating of marketplace ranking , fake reviews by alts, fake flagged reviews, ripped video game models, dramas, brand names, fake DMCAs, copybotting and sharing on some website just for beating competitors...SL is more dirty than you thought. And LL? Honestly they did a little changes on MP ranking algorithm this spring and they took some action to some websites lately. But overall, they are too passive to care about creator's benefits. They are avoiding their responsibility.

4, As the result, creators will realize even they work full time and it's still hard to pay their bills, they can make some money but the growing is hopeless. Their creation, their business, their benefits are not protected, there are too many risks even from their "protector" aka LL.

Over all these sh*t, what do you think?

Find a job in RL and put your passion of SL to it , you'll make more and feel safer. The ship is shrinking, so make sure you are not the last one.