Many Second Life Merchants Say the Virtual World Economy Seems Oligopolistic; How Should Linden Lab Intercede?

We should explore a key finding from my recent Patreon report, that nearly half the Second Life merchants surveyed believe the virtual world economy is dominated by oligopolies (see above). A solid plurality of merchants believe some SL brands have oligopolistic power over the virtual economy, while 37% are open to that possibility. 

Anonymous comments by the surveyed merchants highlight their specific concerns:

There is a lot of gatekeeping in the SL creator's world, especially when starting from zero. They limit too much the access to certain body devkits like [top brand A] or [top brand B] or to certain events so it is hard to grow as a creator when you are just starting with the brand, even if you have the knowledge or potential, it relies too much on followers rather than quality or original content.

All you have to do is look at the clothes market and how many bodies have come and gone and how much stuff is unusable without the outdated bodies. Folks have to keep up with what the body makers are doing, as well as making things fit multiple bodies, often with intentionally obfuscated devkits, it's a mess.

Devkit gatekeeping is a huge hurdle to the health of the SL third party content creation ecosystem... you know what i'm talking about.

It's so dependent on event companies, other creators, and ultimately... whether the audience has money to spend at all let alone log on, not just our work.

I think some of the negative trends occurring in the SL creator economy fall on the shoulders of choices made by other brands. The body brands really seriously impact how our market works, and the amount of brands and bodies and mods on the market has negatively affected the market in as many ways as it has positively. It's turned customers at odds with creators more than ever.

Faced with growing oligopolies, real world governments tend to impose regulations or taxes on these powerful companies/coalitions, even breaking them up into smaller companies. As Second Life's effective government, Linden Lab can't exactly do anything like that.

I do see some potential in offering "carrots" that lessen the feeling of oligopoly power. Here's three suggestions:

 

Publicize/highlight highly-optimized mesh body options. We've already written at length about how many (most?) of the top mesh bodies are way too triangle heavy. This creates an opportunity for Linden Lab to highlight -- perhaps in a Top Optimized Body contest? -- mesh bodies which are beautiful and streamlined to cause minimal lag. Good for the economy, good for the overall performance of the virtual world.

Hire a third party company to host shopping events on Linden land. The Linden-hosted events in-world tend to be highly non-profit, which is great; shopping events, however, would bring in a lot of fun traffic to the mainland. They could even be stretched out over many multiple sims to (somewhat) lessen lag. Trouble is, this would be difficult to pull off if it was managed by Linden Lab itself (drama, accusations of favoritism, etc.) So one solution is to hire a third party virtual world event studio -- there's many of these, doing events and marketing projects across many metaverse platforms -- to pull it off. This would be a chance to present new brands as curated by people outside the main SL community.

Of course, the main way to lessen oligopoly is grow the economy, i.e. grow the active user base. With Second Life's active shopping market so small -- roughly 300,000 to 400,000 users are active shoppers -- it's inevitable that some brands will take on outsize power. An active user base that grows into the millions, however,  could create new markets and new niche categories.

No bad ideas in a brainstorm, like they say! What would you suggest, NWN reader?

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Comments

[Boop]

I think improving the marketplace would be a good place to start. Better search, better categories, it's not even responsive.

[Spiffy Voxel]

The fact that the old article you linked to about avatar complexity is from 2018 — and very little has changed in the six years since — speaks volumes. Yes, Maitreya has lost *some* marketshare to Legacy and eBody Reborn, but it'll still remain dominant for several years yet at this rate.

The only thing that might *shame* creators of both mesh bodies and accessories into change, to my mind, would be if it can be shown that they're actively harming the performance of the Second Life Mobile Viewer, or if Linden Lab pushes through changes to their desktop viewer (and on to third-party viewers) that throttles appearance for high-complexity avatars to improve performance.

[Johnny Wants Water Do You Have Some]

I was just noting this the other day: Creators who have been around, have had favour with LL have thrived and have cornered the market on a variety of things, from landscaping to homes. Of course these assets are all very well made, and look great in their deceptive 'rendered in a professional 3d program, not SL' images.
They're so confident in their market share that they only have to use 1 picture now, and have lowered their prices to such an affordable level - that it is pointless for any would-be competitor to enter the market - especially the aspiring or amateur creator.
It's good for the customer to have so many affordable and high quality items available to them - I'd even say that prices have COME DOWN in SL over time, even though everything in RL has gone up and inflated. This is a bit of a death spiral now, as top and legacy creators get a further stranglehold, less and less creators will enter the arena, and the oligopoly will strengthen itself, and economically benefit from it.
There's probably nothing LL can do about this.. it's just the way it is, and perhaps SL has reached saturation point, or at least no reason to enter the market commercially, and so yes there will be more consumers and less creators.
The top stores and creators will be happy about that though!