Virtual World Recession? Over One-Third of Second Life Content Creators Report Recent Sales Down 15-30% -- But Only 2% Are Creating Content for Sansar (Survey)

Here's the results of the survey I mentioned last week, and they're worth a close look. Key points are probably these:

• 39% of merchants say sales are down this month, compared to recent months -- this despite a typical upturn during the Holidays.
• 42% of those surveyed say SL is "a full time job and main income source" -- so this downturn is actually a threat to many of their real life livelihoods.
• Less than 2% are actively creating content for Sansar, while 37% have a wait and see attitude to Linden Lab's new platform -- and 52% say they'll remain merchants in Second Life "til the end of the world".

This downward trend reflects frequent reports from SL content creators I've received over the last few months. While SL private estates are still slowly growing, SL consumers seem to be buying less, overall. For instance, as Chic Aeon puts it in Comments:

November is looking very average (over the last year) for me. October was one of my lowest months for a long time. I can confirm that EACH and EVERY SL creator I talked to has noticed a sharp downturn (most from summer and continuing ; I had a very good summer - who knows why). Also events are really hurting -- pretty much across the board including the top ones. 

If there is a general downturn, what's the prime cause? According to Grid Survey, peak daily concurrency continues to slowly trend downwards, from about 55,000 in November 2017, to about 52,000 this November. That, and a waning of in-world events in general, which diminishes reasons for buying new virtual fashion (the major shopping category), is definitely a contributing factor.

SL merchants, of course, have a closer perspective on the problem -- here's some of the reasons for the downtown that they anonymously gave in the survey:

The market is glutted with merchants who are willing to sell for at least half or more of what an item is worth. These folks are taking the business away from those of us who take the time for perfection, creating works of art with their products, spending days on one item, hours and hours with little or no returns. Because of all those who do a fast item, not nearly as good but priced so folks will buy...

 

Every one( merchants) has lowered their prices so much, it is hard to break even, ( staying competitive) when using templates. Traffic is down, sales are down. Hard to keep traffic and sales up; Linden Lab makes it hard to use things like events and destination guides listing. Destination guide in particular feels like a popularity contest; it is not clear what 'qualifies' you as an entry.

 

I think we have to work a lot harder to get the same amount of money that we used to. This is mainly due to elitism in events and a trend of shopping events rather than main stores.

 

Just like in Real Life, Second Life struggles with slow customer growth compared to the fast designer's growth. At the end of the day, designers who are investing in learning either modeling or texture, are the biggest sellers. Competition is becoming very hard and sometimes not ethical in Second Life.

 

I personally believe we're in a season of change. There are more and more "large scale" creators turning up using daz models and rendered ads and they cater to the large population of female avatars that wear next to nothing. The smaller, more independent creators can't keep up with the demands for less money so it's definitely a struggle right now. Events are not doing as well and some creators are trying to get back to main store releases.

So those are also reasons! Most concerning to Linden Lab, perhaps, is the majority of these creators are committed to Second Life until the heat death of the world's servers, with far more interest in moving to other virtual worlds, than Sansar:

To be sure, this is not a scientific survey, and only ~100 merchants took it. (Then again, that's a pretty good sampling of active SL merchants, who probably number in the low thousands.) Next month, I'll plan to conduct a follow-up survey, to hopefully get a broader view of 2018, and the outlook for the new year.

Comments

[Zoey Mara]

the big events aren't doing good cause of the good old boy system same stores every month with empty stalls all around because they wont give new stores a chance , my store it self has been denied events hundreds of times because 1. im not a friend of the event owner 2. im not a big name store 3. they honestly dont care for the little stores and push the big stores everyone already knows. The point of events use to showcase the smaller stores that no one heard of to help them grow...but they arent doing that any more. I literally stopped shopping at events because they are worthless its the same stores over and over releasing the same stuff with new textures ..you can only own so many skinny jeans or bikinis before you get tired of it. my shopping today consists of going out on my own and finding the smaller stores and giving them my money instead of the established stores.

[Zoey Mara]

And thats not including events that are doing shady business practices stealing copyrighted items from other mesh programs , stealing copyrighted scripts from creators without their permission , and event owners treating customers and designers like garbage ect. A lot of us have pulled out of events because of it or stopped shopping at those events. I feel sorry for the creators that design for those events but i for one will just wait till their items make it to their main store so i don't have to support those events.

[Little Red Dragon]

This is an informative and insightful article... and barely touches the tip of the iceberg.

There are so many varying opinions on all of these things. I have long wondered why it is considered so very important to follow the exact processes of Second Life-- a virtual world we decided to *leave*. Cutting the Linden Lab apron strings could not have come soon enough for me... yet here we were more than a decade later, still trying to re-create that environment-- along with its major flaws. In the meantime folks using foundations such as the Unreal engine were creating systems that could handle dozens of NPCs and weapons / vehicle physics in real time, with multiple players online and no lag / no graphics glitches on numerous graphics cards and computers... and I had
to wonder (from the earliest days) if Opensim is following the course of sensibility and wisdom. 11+ years later, I am still wondering this.

Beating a dead horse, because here we are, so vested in the current system that people are unwilling to change and even oppose change-- even if it's ultimately for the better. "This is how it is and will continue to be!" can be shouted while the decaying walls crumble.

On IP rights: First-- aside from Apple's Iron-curtain "do it our way" mentality-- trying to enforce IP rights has historically proved to be a dead-end and vain endeavor. The music and DVD industries with the sharpest minds in the business have been trying to enforce IP rights for years... and finding that to be a self-defeating battle. The more visionary ones have found better methods and still earned considerable profit. The less-visionary are still trying to create closed-wall structures that are becoming increasingly difficult to defend.

I was involved in virtual worlds before SL was even a twinkle... and on those worlds nobody sold anything. Creators made things and gave them away for the reputation and posterity. Profitable? Depends on what kind of profit one is going for. The percentage of people who earn money on SL with a degree of success is dismally low compared to the number attempting to do so. OSgrid and the Hypergrid have proved that making things free and giving them away works. Increasingly-numerous Kitely merchants are proving they can sell items and not worry about "IP rights" as they allow their items to be transported across the hypergrid.

There will always be content thieves, no matter what-- but Kitely has proved honest people are willing to pay for quality items.

Who are some of the most popular and well-known entities on these worlds? The first name that comes to mind is Arcadia Asylum. The only thing Arcadia insists on is that we don't try to sell her items. Beyond that... copy, give away, modify, alter, enjoy! I applaud Arcadia and others of similar mind... and after 14 years of being a merchant, am strongly considering joining their ranks. Free Dwagons, anyone? Or maybe I'll go the Kitely "transportable" route. Hard decision to make coming from the SL/Inworldz closed-wall monetized indoctrination, but I'm working on it.

Thoughts on the Certified Creators Program. No thanks. Don't want it. Don't need it. Try creating for the FUN of it. Sell or give away for free, whatever suits you. Far more rewarding and less stressful than constantly fighting a no-win IP crusade. Merchants who do this for a living: we'll still buy your stuff. Don't sweat it.

One line in the article I've tried to stress both to Linden Lab, Inworldz and Opensim for years: "A virtual world which can’t grow and compete against other platforms is destined for near-obsolescence." Basically, if we don't step up our game and change methods-that-aren't-working, new tech is going to come along and leave us still trying to put on our pants. Grids go out of business by failing to adapt. OSgrid's concept of "everything must be free!" is a nice concept in a utopian world where nuthin' costs nuthin, carry the nuthin'... but it doesn't work in real life. The very existence of the phrase "snail dev" didn't come about because Opensim is keeping up with the pack (no offense to our volunteer developers, whom we appreciate). Progressive development requires professional developers, full-time and paid. Someone has to finance that kind of development. It is possible to do, at *minimal* cost to individual members. All we have to do is realize such goals are possible and be willing to adapt to an ever-changing environment.

Will Opensim continue to survive? People in nursing homes on oxygen and feeding tubes are "surviving". The question is... what kind of survival do we want for our virtual future?

One solution for progress is to employ professional, financially realistic and responsible policies that provide the funds for full-time devs, pro-quality servers, and software licensing essential to the project. We don't achieve such things on yearly fund-raising drives that don't even pay the core bills. They help and are greatly appreciated, but let's face it: reality demands considerably more than "FREE WORLDS!". Honestly, people should have learned this long ago: nothing is free. There is always a price to be paid. That's the subject of an entire article of its own.

Opensim and OSgrid will ultimately not prove sustainable based on blue-sky concepts of "virtual worlds must be free!". Dreams are fine. Reality bites you in the butt, regularly. If Opensim is to progress and keep up with the quickly-growing virtual field, we need to completely re-think where we are and where we want to be in 10 years. Make that 2 years; this industry is not sleeping.

A major issue right now is Opensim relying on a viewer that has already pretty much disowned Opensim. The need to develop our own fully-functional viewer or better-- to create a browser-based user interface-- is huge. The need to get away from the antiquated and problem-infested Second Life Viewer concept is paramount. Haven't we had enough of "viewer-vs-server" issues and "we don't support Opensim" attitude?

Change is understandably something folks are terrified to do. Currently no funds exist to create the adaptive cross-platform user interface we need for Opensim. But if we don't start moving that direction, as the article states above-- get ready to become obsolete. Because that is the certain future of a project that fails to predict and prepare for the future.

I mention here problems without solutions. There ARE solutions (I could write a whole set of articles), but solutions require people who are willing to entertain new concepts, think beyond current limits... and change.

We are killing ourselves by insisting on following a business plan that does not promote rapid progress. "This is how it's done and will continue to be done" seldom produces the visionaries essential for progress. After 11+ years, people still crashing on teleporting, avatars appearing naked, half-formed with car-sized hair, worlds that fail to rez on a regular basis, textures fail to rez, sound clips played 30 seconds to a minute after a gesture is triggered, an entire region lagging because a single person teleports in or out... these things do not attract new users. People can claim that's acceptable system behavior-- or more accurately perceive it as a harbinger of obsoletion. If people don't WANT rapid progress and improvement of the Opensim system... stick to the current path.

Lest anyone think Opensim and OSgrid is too established for anything to go wrong, history speaks loudly: OSgrid already fell once... and to drive the point home Inworldz followed that "refuses to budge" path to self-destruction. Utopian system models consistently produce failure, not success. We can learn from history and start re-thinking the future, or stick with current method and be doomed to repeat that history until only the most hard-core users remain while everyone else moves on.

I perceive that OpenSim has great potential. I also perceive we are nowhere near achieving that potential based on the current financing and progress model. If bringing these things out in the open is beating a dead horse... then that can only mean some folks consider the horse to already be dead. Perhaps we should be working on creating a horse that can stay in the race and maybe even win it.

For EIGHT YEARS Elf Clan supported Inworldz (to the tune of a total of $150,000+ as a group)... and *not once* in that entire time did founder Elenia / Beth implement ONE suggestion from our group. This is absurd considering that Elf Clan was largely responsible for taking one of the tiniest grids on the planet (Inworldz) and turning into a major contender. You'd think they would at least be open to *some* suggestions from one of the most (at that time) influential groups on the virtual worlds. Instead Beth insisted on doing thing HER way, ran off all the other Founders, and crashed Inworldz into the dirt... all because nobody but her had a say in anything. And to be frank, she was a rotten grid manager (as is very obvious). Transparency and quite a bit more customer-input / follow through could very well have saved that now-defunct grid. Because of that iron-curtain "I-say-so" mentality, I would consider it very foolish for anyone to support her "new grid" venture-- simply because of that same stubborn zero-user-involvement in how the grid is operated. We pay the bills... but have no say. That just doesn't work. Perhaps if every region owner were considered a type of "shareholder" with a vote as to how the grid operates... we'd see things working quite differently. (Not saying that's a good idea... it's just an idea.)

Right now part of what is killing us is the lack of unity in the Opensim community. (In my opinion) this is the same thing that keeps the Linux community running a distant third. If the Linux community united with one common, universal, cooperative distro, it could invade the computer field and give Microsoft and Apple a real run for the money. If Linux attracted enough users to force manufacturers to develop everything for Linux... hubba hubba. But "a house divided against itself cannot stand." Linux is a house divided. So is Opensim.

Opensim is different than OSgrid (if you want Opensim to ignore a Mantis... just mention OSgrid). Firestorm couldn't give a rat's hiney about Opensim. Too many grids creating their own devs and nobody cooperating with anybody (well, there is *some* cooperation just as there is *some* cooperation with Linux... but it is not to the degree needed.)

"As a good start, however, I think that there are an increasing number of us who are becoming more and more aware of the shortcomings of the viewers we use. All of them prioritize Second Life, with Opensim coming a very poor second."

Indeed the Viewer is a major issue. The layout is extremely user-unfriendly, has an almost straight-up learning curve, and is full of bottlenecks and malfunctions... mainly because there is no solid-core development team working on an Opensim-specific model.

It also seems design is being left to techs, which is a bad idea. Not to disrespect our devs (we appreciate their volunteer work), but techs think like techs, and unfortunately seldom like everyday users. I don't say this as opinionated bias: I say this from 30+ years as a professional in the field, constantly having to bridge the gap between techs and the end-user / business. "Technobabble" is a term that extends not only to user manuals, but in the way our current Viewers are designed. I've worked for decades in UI design... and can say with certainty the current viewer needs a major user-friendly overhaul. Just the chat area alone: I mean seriously... chat blocking a major portion of a viewing screen in a visual program? Having to constantly switch between IM boxes? Notecards and teleport requests suddenly blocking screens right in the middle of important activities? These UI "features" are INSANE from a user standpoint. They would not be tolerated in a real-time game. A far better UI is not only needed... it is *essential* if Opensim is to survive the ever-present and rising competition.

Or, we can just leave it like it is and limp along at "Snail Dev" pace... to eventual obsoletion.

So yes, the viewer needs completely re-designed. First from a user-interface standpoint, just so we get something usable. Then fixing major bugs (such as texture, sound and gesture bottlenecks). Then once we have a workable viewer-- possibly re-designing the entire thing from the ground up so that we bring it into the current century.

"We all know that if we want Opensim to progress the way we would like it that it is going to cost money. Most of us would like to help, but to do that we need to have a fair idea about how much it's likely to cost."

Agreed. And to do that, we need to get people's heads out of the "Virtual Worlds must be FREE!" utopian cloud and back down to the reality of real-world costs and salaries for professional devs (so those pro-coders can quit their RL jobs and focus on Opensim). We need to put an end to the "OSgrid is not part of Opensim" snobbery and universally realize that OSgrid is THE testing ground for Opensim. Opensim needs to work with OSgrid hand-in-glove, or "divided, we fall". Members across the hypergrid need to realize *these things cost real money*... and ALL be willing to part with at least some pocket change to make the reality of growth happen. This calls on for-pay grids to financially give back to the project as well.

We have a choice: We can either set up a financially sound and stable Opensim / OSgrid development system and progress at a much more rapid pace... or we can keep things going as they are and continue to see the "SNAIL DEV" logo on the About/Help information page. In another 12 years where will Opensim be? At the current rate of development, my guess would be the proverbial dead horse... long outdated and left behind by far more visionary-- and funded-- systems.

The choice is ours, but we can't make that choice without the cooperation of the powers-that-be. And we can't get that cooperation until someone develops a "Steve Jobs" backbone and says, "Alright folks, this is the direction we have GOT to go to survive." That's what he did with a nearly-bankrupt Apple... and now they are the first company to top $1 trillion in value. Not that I'm saying we should go the iron-curtain route of Apple... but we certainly need someone (or several someones) to see reality for what it is an take the needed steps to bring Opensim into the modern world. Because right now it's lagging behind current technology and virtual development by about a decade. Or two.

[Amanda]

The question "How's your sales lately, current month VS. average of previous months ?" doesn't really tell us anything about the economic situation in SL or virtual worlds in general. Individual content creators do not have equal economic impact. A seller with a volume of 20000 Lindens a day in sales being down 10% does not have the same impact on the economy as the seller who has a volume of 200000 Lindens a day who is up 5%. You would need to know the trend for a representative sample of sales in SL to make any judgments on the economy.

I wouldn't be surprised if SL is having a recession but this survey doesn't shed any light on that.

[Pamela]

It’s simple supply and demand. While shrinking concurrency means fewer customers, the supply of inventory is constantly expsnding, and unlike RL, inventory never runs out. I am still selling things I made ten years ago — though at greatly reduced prices.

The other factor is that the introduction of mesh means everyone can import mesh from the internet. No need to make anything from scratch. A recent scandal revealed how many well known merchants are importing, not making, their products, often illegally. Many customers are fine with it,

Then there are the ruthless popular stores that import mesh and price it for literally a tenth of the going price for similar products.

Anyway, the writing has been on the wall for a long time, and I still make a living from my store, and I am grateful for the wonderful career LL made possible.

[Chic Aeon]

So I skipped reading the TOME (and I thought "I" was wordy).

The event decline is noticeable to anyone that attends or takes part as a creator. Part of the issue for those being refused entrance to a venue is NOT that they aren't part of the good old boy's network, but that they don't make ORIGINAL goods. Most of the better events have that as the top criteria. So for those folks in the secondary creator market, the obvious answer would be to learn how to make things for themselves.

In the one event I continue to support there are new creators joining every round. Most are pretty impressive. So there IS room and you don't have to have a big store or rub elbows with the "elite" or even network.

I have watched top creators cut out or limit events, and almost all my "second tier" creator buddies are too -- simply because venues are closing or have become very small ( I noted an event I used to take part in now at one third the size and with less than stellar creators ). Events where I had previously made over 100,000 became ones where I made 10,000 with the same quality of goods.

*****************************

IF we look at the larger picture though, I believe the underlying sales issues are a result of an aging citizenry. No, not turning 65 or 80 or whatever, but "eight, ten, twelve" virtual years. Most folks have everything they need. The years of upgrading to mesh are behind us. No need to replace older items any longer.

We don't seem to be getting an influx of new folks. And for those that do come and stay there are so many great free items that it is perfectly possible to enjoy SL and spend no money at all. It wasn't always like that, but the competition among creators has convinced many that they MUST have groups and monthly gifts etc. So that trend is contributing to the lack of need.

I am not sure there is a real answer here. My plan is to keep making what I enjoy making; things that I personally want or that I am enamored with. I am down from six events to one. And so far my income is stable if not skyrocketing anywhere near Mars.

[Zoey Mara]

i stand by my good old buy conment cause i do make original and not templeted or stolen goods. its easy to tell when you look at events and its the same handful of stores every month, even the same stores in multiple events yet the owner sends out a message sorry we have no space for you ..and when you go to the event they have 10 empty stalls for the whole month. and rarely do i see new stores at these events even the quest slots are filled with big stores instead of newer stores that could use the push from events. To assume that people are denied because they dont make original content is a joke when the same big stores are being caught using stolen goods that aren't original at all , hell ive been to events that advertise as ORIGINAL have major stores using tempeleted garbage that all they did was texture them, so much for ORIGINAL

[Jason Spyker]

It all works quite nicely for people who think of it as only a hobby and time sponge. Second life is not user friendly, Linden Lab is not customer friendly, Second life is a money making machine for the investors. I do not think it is any more than that to Linden Lab. They are banning many people on a whim, people who have created good things or have spent lots of money, with no recourse. Anything else to blame? That about covers it from a long time users experience. I am still there because it is a pass time for me. I have spent no lindens in months now.

[Obviously Name Withheld]

People complaining that users aren't buying their stuff and buying someone else's:

That's how it goes. If no one is buying that means no one wants your stuff.

I am a mesh template creator 5 years and I am still cashing out north of 5 thousand per month, this has been steady and goes a little higher sometimes but never below. Demand is there even if the interest in events is waning. I saw that coming a mile off. There are just way too many events now with all the same stuff retextured and priced differently-its boring.

I am in it until they unplug the last server. It's still a cash maker for me and I will stick around as long as people are buying.

@Zoey, making so called original things means nothing if its crap that nobody wants. People use my stuff in all kinds of ways and that's ok. I've done the hard work for them and if they want to slap their textures on it , mark it up and call it their own , that is fine by me. It is their original creation because I sold a full perm kit at a price I think is fair for me.

[sirhc desantis]

Ser Aeon raises a couple of good points.
First. the 'tome' - someone woke up the elf? Second and actually relevant, as an old fart I rarely buy stuff. Outside of clothing and hair, I or one of us makes it. Means it is portable and thats a decision made way back.

On clothing, since mesh happened I do tend to search for a template for anything I like. So yep, it means I buy one instance (and spend uploading textures) rather than someone elses retexture. As I am not in the schmatter trade then it is solely for my enjoyment and strikes me as better value.

So sucks for you who try to get by on that but yay for the original template makers. They get my biz.