New World Notes

France's Le Monde Remembers the Fall of Second Life's Biggest User-Run Bank & The Limits of Virtual World Libertarianism

French-fluent readers, the great Le Monde of France has a new article on a famous old story from the virtual world economy, part of a larger series on the topic: Comment Ginko Financial, la plus célèbre banque de « Second Life », s’est écroulée -- i.e. "How Ginko Financial, the most famous bank in “Second Life”, collapsed".

Ginko, as longtime readers may remember, was an SL-based financial service offering incredibly high interest rates to users, attracting high skepticism over its management and cash liquidity, not to mention allegations that it was a Ponzi scheme, until Linden Lab finally shut it down.

As I discuss with Le Monde reporter Florian Reynaud, the Ginko case was another lesson for Linden Lab on the limits of libertarianism. Florian also managed to get an official statement on Ginko from Linden Lab, but it's very broad -- because,  he tells me, the Lindens don't have anyone still employed there who even remembers that far back.

Read the Linden Lab statement below along with an English excerpt (albeit with a mediocre translation from Google):

Survey: Will You Pay $15-50 to Change Your Second Life Account Name?

New Linden Lab offer, new SL user survey (above, take on laptop/desktop for best results):

That’s right, as [last week] everyone can change their avatar name regardless of their subscription level. Not just the Premium subscribers that have always been able to do so, but all of our Basic accounts as well! This is something we’ve been trying to offer for a long time, and something that we get requests for on a consistent basis, so we couldn’t be more pleased to finally be able to announce it.

As an exciting new option for Basic accounts, here’s what it looks like today. Not only do you have the option to change your avatar’s first name to anything you can imagine, but we also offer a rotating list of last names to give your avatar (even if you don’t already have one) that are updated on a regular basis. We will continue to make updates to the available last name pool, so if these options aren’t for you, stay tuned for future updates. You can also suggest your favorite name on our suggestion form, new names are chosen from there!

Will be interesting to compare/contrast the results with our resent survey on Premium+ upgrades.

Linden Lab Should Offer Per Country Pricing for the Estimated 1 in 3 Users Not In Wealthy Nations (Comments of the Week)

Very good point from reader "Alelangel Verenova", responding to my survey on interest in Second Life's new Premium+ account offering, which will costs up to $25 USD a month:

Here in Latin America there will be a major NO answer, basically because the exchange to our local money. It's an important amount per month, even per year to consider only for a "game". Maybe it could be worth it if you are a creator and you earn good money on Second Life, but besides that, for this side of the world, it's expensive and useless.

It's a very valid point! Based on recent user data, roughly 1 in 3 visitors to SecondLife.com are from Latin America and countries across Asia and Europe (see the full below) outside the wealthy G7 nations, where $25 a month is pretty modest fee for many hours of online entertainment. Here in Los Angeles, for instance, 25 bucks will pretty much get you just two (2) movie tickets, i.e. 3 hours of entertainment. In most other parts of the world, however, $25 is enough to buy a week or two of groceries. 

To reader Luther Weymann, a retired tech exec who now enjoys Second Life in his free time, the solution is obvious:

Second Life's New Premium Plus Not Always a Good Deal -- But Could Be Made Better (Reader Comments of the Week)

Lots of good reader feedback around the just-announced Premium Plus offering for Second Life. According to  Luther Weymann, getting a Premium Plus in his specific scenario would not be a very good deal:

I have a free account.
I have a 2048 store in a private region for monthly rent.
I have product development that I upload textures at L$10 each.

Suppose I buy the $249/yr premium plus, move my 2048 store to the mainland, get the weekly stipend and sign-up bonus, and stop paying for texture upload. In that case, I spend about $100 a year for the premium. I already pay about $100 a year for the SL Market sales commission. So I would go from paying SL $100 a year to $200 a year, and I only gain more groups.

Yikes. I imagine many SLers are in a situation like his. Speaking of product development, Dee has a very good idea of improving Premium Plus for content creators:

Linden Lab Unveils $25/Month Second Life Subscription to Replace Eroding Revenue of Virtual Land

As hinted at in a recent in-world Q&A, Linden Lab just announced Second Life's new "Premium Plus" subscription plan, with greatly enhanced content and features for $24.99/month or $249.99 a year -- see above, with a helpful compare/contrast with the existing Premium Plan. As my heated reader commentary suggests (some choice samples below), this new offering is sure to cause controversy. But it's a necessary move by the company, nudging players toward a sustainable revenue base built on user subscriptions, versus unsustainable sim tier. (Also reflected in the new event region offerings, high capacity sims designed for short term use.)

Or to put it another way on this day, which happens to be Second Life's official 19th birthday: If you want Second Life to be around and still active for SL30B, better consider getting Premium or Premium Plus.

Reader feedback below:

Coming Soon to Second Life: "Premium Plus" Subscriptions Offering Free Texture Uploads, Expanded Land Tier/Group Limits, Much More. Watch Here!

Starting at around 24.00, Linden Lab's VP of Product, known in-world as Patch Linden, teased out a new Second Life product offering coming (hopefully) on SL's 19 anniversary of June 23: Premium Plus.

Offerings for the monthly subscription include:

• Texture upload fees eliminated
• Land tier expanded to 2048 square meters
• Up to 140 groups
• L$3000 sign-up bonus, L$650 regular stipend
• Special support phone line
• Group creation fees reduced from L$100 to L$10

All yours with a special introductory offer of $24.99, then moving to $29.99/month or $249/year. A pretty solid offer for core content creators, who end up paying quite a lot to Linden Lab.

Gorgeous Aurelia has a good comparison explainer here, with an infographic to boot. The full interview with Saffia Widdershins includes some interesting tidbits beyond that, including:

Comparing the BTC Apple to the L$ Orange (Comment of the Week)

Reader Joey1058 has a fair point about my comparing the oranges of Linden Dollars to the apples of Bitcoin:

The US designated crypto as a commodity. So asking to use BTC as a currency is like asking to use gold and silver as an everyday currency again. The L$ is an inworld currency, and has been planned that way from the outset. Broadly speaking, Second Life holds it's own sovereignty, so exchanging Lindens for USD is like exchanging GBP for USD.

Both BTC and L$ require an exchange to convert to USD. Once converted, they get taxed. The difference in exchanges is that LindeX/Tilia do a full transaction disclosure to the Feds. Crypto exchanges do not. Which is why the Feds are attempting to regulate crypto. If you are not reporting your crypto cash-outs to the Feds, you are in violation of whatever rules the IRS deems to slap you with.

This is roughly right. Though overall, I'd still say L$ and BTC is a comparison of tangerines and oranges, i.e. citrus fruit with more overlap than apples:

Shock Web3 Stat: Way More People Still Buy Virtual Items in Second Life Than Buy NFTs on Coinbase & OpenSea -- Combined!

Shocking or hilarious (depending on your point of view) stat of the day from the sarcastically-named Web3 is Going Great blog:

[Though Coinbase] claimed to have 3 million users on its [NFT marketplace] waitlist, the public marketplace release has gone shockingly poorly given Coinbase's existing reputation. The platform has yet to see more than 200 transactions in a given day (compared to OpenSea, which regularly sees more than 100,000 transactions a day, or its smaller competitor LooksRare which sees more than 1,000 daily).

As I noted back in January, NFT sales compare quite poorly to virtual item purchases in Second Life, which hasn't been considered a "hot" platform in tech since at least 2010. But Second Life still attracts about 200,000 daily active users, and it's fair to estimate each of those users buy an average of 1-2 virtual items per day. (At a conservative guess; 3-5 per day is probably more accurate.) In other words, at least twice the daily sales than OpenSea, and 1000x more the NFT sales on Coinbase.

Somehow this reality hasn't registered with the many companies, brands, and celebrities involved in NFTs:

On its site Coinbase claims 65 million+ users, and is currently getting 47 million+ monthly visits, according to SimilarWeb. OpenSea gets even more visits: Nearly 78 million/month! Then there's all the promotion of NFTs by celebrities including Snoop Dogg, Grimes, Emily Ratajkowski, Eminem, Reese Witherspoon, Gwyneth Paltrow, Mila Kunis, and Paris Hilton. (Who cringe-ingly declared herself "Queen of the Metaverse".)

Despite all that attention, NFTs are attracting less actual sales than the platform known by most people as "Oh yeah, that thing from The Office, right?"

Metaverse Content Creators in Developing Nations Can Do Quite Well -- Once They Break Into the Market (Comment of the Week)

Great comment from a reader based in Brazil, expanding on my point (and that of a fellow Brazilian) about the difficulty for metaverse content creators in the developing world to succeed, due to high costs of entry:

It works the other way round too, the $ is very valuable and gets me a higher standard of living than using that dollar in the USA.

I can eat well, afford rent and my bills, all from Second Life content creation. Adobe prices their monthly subscriptions in the local currency too, but yes [avatar software creation tool] Marvelous Designer is very expensive compared to Adobe's monthly subs.

Reader "Reiille" from Mexico, echoes that point:

 1 USD is worth 20 pesos to us, which of course, if you earn that back in revenue, it can be a huge financial help. I myself have been trying to break into the market, but the investment to be made to put a new brand out there is more than I can afford, so it's been a slow burn. 

So while breaking into a relatively static market* like Second Life is difficult for creators in the developing world, once they do break in, they have a tremendous edge:

For Metaverse Creators in Developing Nations, Second Life's Costs to Entry Have Grown Too High (Comment of the Week)

Important comment from Brazil-based reader "Moanna", responding to my economics survey which suggests that the cost of entrance into the Second Life economy has become so high, it's difficult for newcomers to break in.

For people in developing nations like hers, those costs are far higher than what they'd be for creators based in the EU/North America. She breaks those expenses down in terms of Brazil's currency, the Real. (Currently valued at 20 cents USD per 1 Real.) 

I've been trying to learn because I want to enter this market.

To create something good, we spend on courses (I paid 600 Reals), programs (Avastar, Marvelous Designer, brushes, molds) and other things that need to be purchased (image services, tables, furniture, parts, equipment, all quoted in US dollars in Brazil). It's very difficult to find support...

I still analyze it from a different angle, because I'm Brazilian. My country has a very undervalued currency. So imagine that we have to pay 4.7 times more for a Linden Dollar... 

1,600 SL creators earn over USD $10,000/year from their virtual content and services. However, that's 3X more than what a Brazilian earning minimum wage in their country makes: