Wednesday, April 28, 2010

Second Life Economics: Real Improvments?

First time Ive seen this
Location: Hunting down old Econ textbook

Linden Lab ran some impressive-looking figures on their blog recently, claiming a best-ever quarterly performance in their virtual economy.

I'll take a few moments to reflect, amid the biggest downtime in SL I can recall in the last year, at time of writing 6+ hours. It's affecting the the Land Store, the LindeX money exchange, and the XstreetSL shopping portal.

Downtime like this hurts the Lab's bottom line, but what do their broader economic claims mean? Rather than cynically assuming that the Lindens are polishing the railing on a slowly sinking ship, I'll play along and, from my educator's point of view, respond.

Tateru Nino may have summed it up best, and far better than an armchair economist like me ever could:

Coupled with the reduction in Supply Linden sales, the overall picture is that the Second Life economy experienced no statistically significant growth during Q1 2010, insofar as an increase in the overall value of available goods and services are concerned. At least, none that can be determined from the published information.

In a global economy that is struggling back to its feet, running in place may not be such bad news for Linden Lab.

In a more encouraging sign for the Lab I'm curious about the increase in repeat logins by new users and what Tateru calls "median concurrency." Those numbers, as Tateru points out, mean more than the peak number Linden Lab often hauls out.

Most of these increases may be attributed to James Cameron's film and SL's heavy use of the word "avatar" in its advertisements. These were good tie-ins for the Lindens to exploit. Whether the "dream home" slant of current ads will help those new blue-skinned noobs stay remains to be seen. SL is not Pandora, even if some themed sims try--in SL's laggy way--to reproduce some of the film's magic.

Will the boomlet in SL, if that is what it is, last? Here are some figures I'd like to see:
  • quarter-to-quarter percentages for land ownership, including the % of total land abandoned by residents
  • average prices of land for sale on the Mainland continents, on Zindra, and for private islands
  • number of institutions of higher education owning land
  • median concurrency by academic users.
The numbers may be out there...I'd love to see them.

Right now concurrency is taking a huge, if short-lived hit, and the grid is still down. Could this be a hacker attack? If so, it's an immature yet powerful response to Linden Lab's third-party viewer policy, to go into effect tomorrow, and the taking down of Woodbury University.

Even if it's a cascading failure of some sort, somehow affecting very different resources presumably stored on very different hardware, it's an ominous sign of instability in the virtual world. I hope it's a one-off event.

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