A Second Take on Second Life’s Economic Situation
Tristan Louis, an application development VP for HSBC, recently made public his economic analysis of the pertinent numbers available on Second Life’s website. For those of you who don’t know, Second Life is the highly controversial MMO 3D digital world in which paying subscribers interact in ways analagous to real life. The only things truly connecting it to reality are a) subscription fees for high-tier membership plans, and b) its in-game economy, which can be exchanged for real money. Like all real currencies, the exchange rate from “Linden Dollars,” as the currency is called, to USD fluxuates.
But back to Louis’ economic survey of Second Life. By dissecting the pecuniary affairs and the raw number of users who’ve subscribed since last August, Louis arrived at a conclusion that affords us a new perspective on Second Life:
On average, the number of logins over a 60 day period seems to be about 35 to 40 percent of the total population reported. The people who log in, however, seem to spend a fair amount of money ($50-60 a week) within the Second Life economy.
GigaGamez accentuates the highlights of Louis’ findings concisely:
If accurate, this would mean that some 200,000-230,000 active Second Life users are on average currently spending more on their in-world experience than any existing online world by far. (For comparison, a World of Warcraft subscription is but $15 a month, and that’s money paid to the Blizzard/Vivendi, not user-to-user.)
To summarize Tristan Louis’ conclusions, Second Life is relatively sparse according to its amount of active users, but absolutely economically lively based on the average amount of cash trading an active user’s hands. Furthermore, even though Second Life doesn’t have an enormeous amount of active users, Louis predicts that that’s all going to change:
[I]t looks that, under the most conservative growth rate, we will see 3.5 million users registered and over 600,000 using the service by the end of April 2007. Under a liberal interpretation of the data, those numbers would shift to 9.6 million and just under 7 million. However, in the most likely case, it is probable that there will be 7.2 million users registered with 1.6 million logging in over the previous sixty days. Not too shabby.
“Not too shabby,” Tristan Louis concludes, but he also advises his readers “to go with the most conservative estimate because [his] data set is still relatively small. Even then, this type of growth mirrors some of the growth patterns we’ve seen in the early days of the commercial web and seem to support the contention that LindenLab is going to be a very strong player in the future.”
In response to Tristan Louis’ analysis of Second Life’s economic situation, Tateru Nino analyzed his analysis, ultimately judging that although many of the user-to-user transactions aren’t meaningful, there is still significant economic activity:
The way money moves in Second Life with tip jars and alternate accounts and refunds means that probably about half of the value given is double-counted. That would leave us with roughly 75% that we could count on, but let’s go the highly conservative route and say a mere 40% of that figure represents actual meaningful transactions, where there’s a net change in the distribution of funds that is in line with the stated figure. Averaging out Tristan’s weekly samples for December 2006, and then applying our own conservative 40% figure to it, we get a daily movement of L$ equal to $269,848 USD.
You can read Tristan Louis’ analysis of Second Life here, and Tateru Nino’s response here.
This entry was posted on Monday, January 8th, 2007 at 2:12 am and is tagged with development vp, tristan louis, second life, new perspective, membership plans, life doesn, world experience, economic survey, economic situation, total population, subscription fees, economic analysis, logins, amount of money, vivendi, real money, blizzard, linden, application development, world of warcraft. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback.
One Response to 'A Second Take on Second Life’s Economic Situation'
Leave a Reply
Please take time to enjoy the archives: April 2008 (1) March 2008 (1) January 2008 (1) December 2007 (1) November 2007 (3) October 2007 (5) September 2007 (2) August 2007 (2) July 2007 (2) June 2007 (4) May 2007 (9) April 2007 (3) March 2007 (1) February 2007 (8) January 2007 (16) December 2006 (10) November 2006 (7) October 2006 (4) September 2006 (6) August 2006 (12) July 2006 (24) June 2006 (26) May 2006 (6) April 2006 (23) March 2006 (14) February 2006 (10) January 2006 (18) December 2005 (34) November 2005 (46) October 2005 (36)
Fresh, related resources:
- Master Djwhal Khul:May 2008 Lesson
Teaching, he said, is the second to this. It should be fairly obvious that the goal, here, is to put you in charge of the fear, rather than allow the fear to take charge of you. There is, however, more to this exercise than merely ... - The Danger we Face
This second possibility is all the more dangerous when faced with the changes to our law enforcement apparatus made to fight our "war on terror". With these new laws going onto the books, like the Patriot Act and HR 1955, we are facing ... - Thousands of American Families Face Ruin
Often it is not possible to give away assets during one’s life in order to take advantage of inheritance tax gift allowances. The solution in such cases is to make provision for cash to be available to pay the tax and leave the assets ... - Juan Crow: The Deep South's New Second-Class Citizens
Justeen Mancha's dream of becoming a psychologist was born of the tropical heat and exploitation that have shaped farmworker life around Reidsville, Georgia, for centuries. The wiry, freckle-faced 17-year-old high school junior has ... - The Economics of Bathhouse Employment
I sensed this when I was still on graveyard, sort of training him and he told me he'd gotten a second FULL TIME job at The Crypt (that's a kink/fetish/sex toy shop for those of you non-Seattleites reading this). So...two full time jobs? ...
on April 7th, 2007 at 10:13 pm
[…] A Second Take on Second Life’s Economic Situation Published 20 minutes ago in Uncategorized. Tags: active, conservative, life’s, louis, louis’, summarize tristan, tristan, video. A Second Take on Second Life’s Economic Situation by Video Games Tristan Louis, an application development VP for HSBC, recently made public his economic analysis of the pertinent numbers available on Second Life’s website. For those of you who don’t know, Second Life is the highly controversial MMO 3D digital world in which paying subscribers interact in ways analagous to real life. The only things truly connecting it to reality are a) subscription fees for high-tier membership plans, and b) its in-game economy, which can be exchanged for real money. Like all real currencies, the exchange rate from “Linden Dollars,” as the currency is called, to USD fluxuates. But back to Louis’ economic survey of Second Life. By dissecting the pecuniary affairs and the raw number of users who’ve subscribed since last August, Louis arrived at a conclusion that affords us a new perspective on Second Life: On average, the number of logins over a 60 day period seems to be about 35 to 40 percent of the total population reported. The people who log in, however, seem to spend a fair amount of money ($50-60 a week) within the Second Life economy. GigaGamez accentuates the highlights of Louis’ findings concisely: If accurate, this would mean that some 200,000-230,000 active Second Life users are on average currently spending more on their in-world experience than any existing online world by far. (For comparison, a World of Warcraft subscription is but $15 a month, and that’s money paid to the Blizzard/Vivendi, not user-to-user.) To summarize Tristan Louis’ conclusions, Second Life is relatively sparse according to its amount of active users, but absolutely economically lively based on the average amount of cash trading an active user’s hands. Furthermore, even though Second Life doesn’t have an enormeous amount of active users, Louis predicts that that’s all going to change: [I]t looks that, under the most conservative growth rate, we will see 3.5 million users registered and over 600,000 using the service by the end of April 2007. Under a liberal interpretation of the data, those numbers would shift to 9.6 million and just under 7 million. However, in the most likely case, it is probable that there will be 7.2 million users registered with 1.6 million logging in over the previous sixty days. Not too shabby. “Not too shabby,” Tristan Louis concludes, but he also advises his readers “to go with the most conservative estimate because [his] data set is still relatively small. Even then, this type of growth mirrors some of the growth patterns we’ve seen in the early days of the commercial web and seem to support the contention that LindenLab is going to be a very strong player in the future.” In response to Tristan Louis’ analysis of Second Life’s economic situation, Tateru Nino analyzed his analysis, ultimately judging that although many of the user-to-user transactions aren’t meaningful, there is still significant economic activity: The way money moves in Second Life with tip jars and alternate accounts and refunds means that probably about half of the value given is double-counted. That would leave us with roughly 75% that we could count on, but let’s go the highly conservative route and say a mere 40% of that figure represents actual meaningful transactions, where there’s a net change in the distribution of funds that is in line with the stated figure. Averaging out Tristan’s weekly samples for December 2006, and then applying our own conservative 40% figure to it, we get a daily movement of L$ equal to $269,848 USD. Tags: active, conservative, life’s, louis, louis’, summarize tristan, tristan, video active, conservative, life’s, louis, louis’, summarize tristan, tristan, videoShare This […]