Archive for the 'Economy' Category
Linden Lab is pleased to announce results for Q4 and 2008. User hours increased by 61% over 2007, highlighting the tremendous growth rate in user engagement that Second Life maintained throughout 2008. User hours increased steadily each quarter, culminating in a record-setting 112 million user hours in Q4. In addition:
• Peak concurrent users were up 31% over 2007
• Land owned by Residents increased 82% over 2007
• Exchange Volume increased 33% over 2007
• User-to-user transactions in Q4 increased 54% over Q4 of 2007.
Financially 2008 was an outstanding year for the company from a profitability and cash flow perspective. We are in a strong position to weather the economic downturn while continuing to invest in the Second Life platform.
Looking at Q4 in more detail:
Q4 user hours grew 47% from the same quarter last year. In Q4, Residents spent 112 million hours in Second Life which was an increase of 9% from Q3. Peak concurrent users of 76,000 grew 6.7% over Q3 and approximately 30% over Q4 of last year.
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Hi, this is Glenn Linden. I work on business programs at Linden Lab, and I’d like to talk with you about an aspect of Second Life that I work with, our Solution Providers.
We define Solution Providers as professional businesses and individuals who work in Second Life with real-world businesses, creating immersive experiences that aim to invite, engage, educate and entertain fellow Residents, as well as their employees and internal audiences.
Solution Providers have played an important role in the growth Second Life has enjoyed over the last few years. Two years ago, there were about 20 companies listed in Linden Lab’s fledgling Solution Provider program; today I’m pleased to say that number has grown to over 200. They range from Resident-developed businesses to departments of major agencies and web development firms, and they work with a wide-range of clients.
Solution Providers’ projects range from fantastical to formal, including a popular promotional gift that requires exploring a giant’s home, to prosaic events, conventions, meeting spaces, recruiting and training locations, tech support provision, as well as brand marketing and promotions.
Some examples:
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Linden Lab is pleased to announce results for the 3rd quarter of 2008. The charts and details below indicate that Q3 was a very strong quarter in Second Life with significant growth in land, user hours and the inworld economy. The inworld economy was unusually strong in September, with users spending 10% more per hour than the year to date average. Inworld transactions in October declined to levels more consistent with the year to date averages.
October results indicate that we should expect land growth to slow in Q4 as Residents reconfigure their land holdings to accommodate the change in pricing and addition of the “Homestead” island type.
User Hours Top 100 Million During Q3. In Q3, Residents spent 102.8 million hours in Second Life, up 8% from Q2 and 45% from the same quarter last year. Peak concurrent users of 71,000 grew 7% over Q2 and approximately 31% over Q3 of last year. In October user hours climbed to a record 37 million hours up 11.4% from the prior month.
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Wednesday, November 5th, 2008 by: M Linden
M Linden here. Many thanks to everyone who responded constructively with their concerns and suggestions about our Openspaces announcement. We’ve listened carefully and your feedback has led to some amendments to our original plan.
Before I jump to the policy amendments, I’d like to provide some insight into our decision and then recap what we’ve heard from you. When the Openspaces product was originally launched, Linden Lab offered Island owners the opportunity to add Openspaces to their land for light use only –- such as ocean or park land. But we didn’t build in and enforce specific, quantifiable performance limits on the Openspaces. Why? For two simple reasons:
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Linden Lab is pleased to announce results for Second Life the second Quarter.
Land mass grew over 44%. The total number of regions owned by residents increased 44.2% over Q1 to just over 1.5 billion square meters. Our growth was due to the popularity of our newly launched “Openspace” land product along with a change in pricing to make the purchase of land more accessible to first time buyers. “Openspace” regions are full 65,000 square meter regions with an upfront fee of $250 and a recurring monthly fee of $75. We decreased the price for full regions by 40% to $1000 upfront (the recurring monthly fee remains $295). We also launched a new Land Store that instantly provisions new regions. Pricing changes plus a dramatically improved purchase experience fueled land sales in the quarter. On the other hand, premium subscriptions have remained flat since we decreased the stipend to L$ 300 per week in the second quarter of 2007. Prior to that the premium account essentially provided residents with a way to purchase L$ at a discounted rate. Because land represents nearly 8x more revenue to us than premium accounts, our focus has been on the launching of new land products rather than on enhancing the premium subscription.
User Hours grew by 8.5% while peak concurrency grew modestly. Resident user hours grew approximately 6% from an annualized rate of just under 350 million user hours in Q1 to over 380 million user hours in Q2. Peak concurrent users grew modestly from Q1 to Q2 to just under 67,000 users. Significant outages in April prevented this number from growing as fast as it otherwise might. However, uptime improved dramatically in May and June – see the grid status page – so we’re expecting to see continued growth in Q3.
User-to-User Transactions grew over 14%. Total user-to-user transactions, a measure of the gross domestic product in Second Life, grew 14.3% during the quarter from an annualized rate of $300 million in Q1 to $338 million in Q2. Resident spending remained a healthy $0.87 per user hour.
Volume on the Lindex grew 5%. Volume on the LindeX, our virtual currency exchange where users can buy and sell our inworld currency, grew 5% to an annual rate of $108 million. The total value of all the Linden Dollars in circulation grew 8.6% over Q1 to $19.7 million in Q2 with the exchange rate remaining steady against USD at approximately L$ 267 to one USD.
The number of “profitable” inworld businesses grew by 9%: Taking advantage of the growth in the economy, the number of inworld businesses with Positive Monthly Linden Flow, a measure of profitability, grew to 59,000 in June.
Meta Linden has posted the full data for June in a Google Spreadsheet here. We have made some modifications to the format to make them easier to review.
The Second Life economy does not appear to be affected by the slowing economy of the United States.
User to User Transactions. Total user to user transactions, a measure of the gross domestic product in Second Life, grew from an annualized rate of $261 million in Q4 to just over $300 million in Q1. The economy has grown 33.6% since the low point after the gambling ban.
User Hours and Concurrency. Resident user hours also grew 15% from an annualized rate of 304 million hours in Q4 to just under 350 million user hours in Q1. Residents spent an average of $0.88 per user hour in Q4 and $0.87 per user hour in Q1. Peak concurrent users grew 13.8% from 58,399 in Q4 to 66,468 in Q1.
 
Lindex Volume and Money Supply. Taking advantage of the growth in the economy, the number of inworld businesses with Positive Monthly Linden Flow, a measure of profitability, grew 11% from December to 57,888 in March. Volume on the LindeX, our virtual currency exchange where users can buy and sell the inworld currency between each other, grew even faster. LindeX volume of $103.2 million was 17.8% higher than the volume in Q4. Residents bought and sold just under $0.29 and just under $0.30 worth of Linden Dollars on the LindeX per hour of usage in Q4 and Q1 respectively. The value of all the Linden Dollars in circulation grew 16.3% over Q4 to $18.2 million in Q1. The exchange rate remained steady against the USD at approximately L$ 270 to one USD.
Land Mass. The total number of regions owned by residents increased 11.1% over Q4 to just over 15,000 regions. That’s the equivalent of of just under 1 billion square meters of space. Residents spent an average of approximately 2,000 hours per region of space per month in both quarters with a slight uptick in Q1.
Meta Linden has posted the full data for March in a Google Spreadsheet here.
While we hope to provide accurate and useful information, please note that we do not guarantee the accuracy of any information; and we expressly disclaim all warranties and limit liabilities as more fully described in the Terms of Service posted at http://secondlife.com/corporate/tos.php.
[ALL CLEAR 18:08 PST] We thank you for cooperating while we worked on our database. We have put the tools away and the database is humming again.
[REOPENED 17:32 PST] We have reports of transactions not completing. One of our databases is being checked and we will give an all clear as soon as possible. Until then it is best to refrain from transactions including land and L$ transfers.
[ALL-CLEAR 15:05] The database is happy again and the all-clear has been given. Inworld transactions and purchases can once again commence.
[UPDATE 14:48] Ops is working on the problem, and the database is again improving. Please continue to refrain from making inworld transactions however, until the all-clear is given again.
[REOPENED 14:30] The database is once again experiencing difficulties. Please refrain from inworld purchases and transactions until further notice. We will post progress reports as they become available.
[ALL-CLEAR 13:55] The issue has been addressed and the database is happy again. Inworld transactions and purchases can commence again.
[UPDATE 13:20] The issue has been identified, ops is working on it, and the database is improving. Please continue to refrain from making inworld transactions however, until the all-clear is given.
We are currently experiencing an issue affecting inworld transactions. Please refrain from making any purchases or transfers. We are investigating and will post additional information as it becomes available.
It’s astounding that with so many residents outside of the United States, we still only accept U.S. Dollars as payment. Localizing payment systems and maintaining the highest level of security possible for our residents is no easy task.
Today we’re pleased to announce a new initiative to make the Linden Dollar more accessible! Through our Risk API program, we have already established relationships with some of the biggest 3rd party Linden Dollar exchanges to keep transactions secure and protect our residents. We are pleased that these Linden Dollar resellers have chosen to work with us and we are now making their services even more accessible to our residents.
A new article on our public wiki page lists the payment options they offer by country, currency, and payment method. The wide range of payment systems these sites offer for Linden Dollars is now also directly available through www.secondlife.com via a link on our currency page to that wiki article.
To keep the information up-to-date, we’ve created two surveys. For those Linden dollar sellers that do not use our Risk API, we’d like to know what payment methods and currencies you accept and whether you’d be interested in using our Risk API. You can fill out a survey to tell us here. For our residents outside of the U.S., we’d like to know what currencies and payment methods you would like to see available to purchase Linden Dollars. A survey for Linden Dollar buyers is here.
By making it easier for our residents outside of the U.S. to attain Linden Dollars, we hope to make Second Life and all of the wonderful creations of our residents more accessible to everyone!
Hi Everyone!
I have published our monthly key metrics in excel, open document, and google doc formats. Links to these current versions are updated on our Economy page.
Concurrency, usage hours, and total resident-owned land continue to grow at a steady pace, while our count of Premium users dropped slightly again in January as we work on designing a better Premium offering.
You can come and discuss these or any other metrics analysis questions with me at my office hours in Beaumont, now on Thursday mornings at 8 AM (better for European customers) and Fridays at 10 AM.
I’ll put a reminder here to please keep comments on-topic and civil – we are open to constructive feedback but please keep it specific and on-topic, thanks.
Meta has updated and posted our Economic Metrics through the end of 2007, available in Excel, OpenDocument, and Google Doc formats. The links on the Economy page are now updated appropriately as well. Economic Growth. Many of our economic metrics showed much slower growth from Q2 to Q3 as can be seen in the charts below. We believe the slower growth was primarily due to the impact of stricter security on credit card processing, shutting down gambling in July and beginning to charge VAT September. With those things behind us in the fourth quarter, the Second Life economy demonstrated its resiliency. The LindeX - the purest measure of economic activity in Second Life – grew 13.2% to nearly $7.6 million USD for December and $22 million USD for the full quarter.
Concurrency. Peak concurrent users, shown in the red line on the chart below, grew 12.5% in the fourth quarter to more then 58,000 – up more than 210% for the full year. We’ve seen a growth in concurrency almost every week since the beginning of September. Growth continued last weekend when concurrency grew another 5.3% to 61,500.
User hours. In December, approximately 893,000 residents logged more than 25.6 million user hours (shown in pink in the chart above) or more than 30 hours a month per user. Of that just 519,000 Active residents, spent 25.5 million hours – averaging more than 49 hours per month. (“Active” is defined as users who spent over an hour inworld during the month.)
Combining a few of these metrics, indicates that residents spent more than $0.30 USD on the LindeX per hour used. Most of this economic activity went to the more than 50,000 residents generating what we call “positive monthly Linden dollar flow” from their activities in Second Life. We believe that many of these 50,000 users are creating the diverse creations and experiences that make Second Life such an interesting place to explore. This is the powerful engine fueling the steady long term growth of Second Life. The growth in Q4 combined with continued growth in January demonstrates that the Second Life growth engine is alive and well.
Transparency. I really enjoy the fact that we are such a transparent company. Throughout the good times and difficult times in 2007, we posted our numbers in a consistent fashion. Even with all the data we publish, its funny sometimes to see how people get it wrong. I wish other companies believed in transparency the way we do. I’d love to see our registrations, active users, user hours, economic activity and anything else comparable on lots of virtual world and MMORPGs. I’m sure some of the data is out there – and I’d love to see what you can find. Please post links to others data in the comments or send them directly to me (Zee Linden) inworld.
We will be discussing these and the newly updated Service Quality Metrics at Meta’s office hours in Beaumont on this Friday morning, January 18th at 10 AM PST.
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