SL and the US economy

hey there, just wanted to ask and see if sl is going to stay up through all this stuff that's going on? i know SL is international in a way and it's not all just the US that's supporting it...

okay let me start over... I'm a land owner in second life, i pay alot of money into it, i build in it, and i was hoping to sell some stuff in it.... how is the US economy problem effecting second life?

actually the U.S economy is starting to show improvements in the market.how long that will last is hard to say as crazy as the market is..last i looked the rest of the world is feeling the downward pinch as well..

It is just now starting to affect sl with increases which a lot are feeling..I think it will survive..some companies within it may end up closing but with any major increase that will happen..i think anyone willing to ride it out will see it even out if they adjust properly..thats also readjusting with decreases as the rl economy hopefully gets better in cost as well over time..if it does hehehe
the market is so bouncy right now and if things go as planned the U.S. could be on track in a couple of years..
thats if it goes as planned..
i think everyone is going to be feeling it for a couple of years..i just hope Lindens do the right thing and readjust downward in cost as they get relief as well in time..
this is all my opinion anyways..it's really still too early to be certain how soft or hard sl will be affected any farther.

It's not the US economy thats the problem so much as the rest of the world. The US$ has strengthened, I get 25% fewer dollers for a pound than I did 4 months ago. Money is tight all over, and with exchange rates going the way they have, people from outside the US are going to find even more problems paying for SL.

Don't forget that many people enjoy SL while putting little (or even no) money into it.

Granted, they DO need to be able to pay for a high-speed Internet connection. But then, even in a downturn, many will prioritize paying for that.

I have decreased my in world spending, but I don't think the economy has anything to do with it. I just don't need much more right now. Eventually I'll get a bee in my bonnet about some project or other and start shopping again.

After the election in November - or really after January, we'll probably be able to see which direction the economy settles on heading.

Well...if my habits are any kind of example of US citizen's reaction to the economy...I'd say guilty pleasures have a way of surviving hard times. Look at prohibition~!!
Seriously tho....I don't think SL is going to suffer in the long term. People will always want their sources of entertainment, be it sports, cocktails or video games. And the worst things are outside.....the more we turn to our methods of escapism.

There's lots of ways to curb spending and preserve the things we enjoy. It all boils down to individual priorities. I don't have kids and I don't spend money on a lot of frivolous extras....but I do maintain my SL account and my land because I enjoy it. I spend more time at home as opposed to going out....traveling...shopping..... so in essence I can still justify SL. If I have to give up my land eventually....I will. But I would also probably just buy more later on when things got better.

My profits are down around 50% since April/may...

From what I have seen and from what I have read on this board, I think the SL economy is segmented.

At one end among persistent users (Forget the others. They are just names used to justify million plus member rolls.) we have people who pay nothing. They may camp or have a job to earn Lindens or they may scrounge for freebies and use what is in their library. These people don't exist as far as LL is concerned except that they logon.

Then we have people Like me who pay the minimum amount to be premium members plus a small bit over to have land or those who have credit info on file and occasionally buy a roll of Lindens (Think like a $10.00 roll of quarters) to pay for texture uploading or other purchases. Dropping the value of land, pleases the bottom market segment since it may make small time landowners of us. We aren't going to ever be anything else, but we have crossed the line of being willing to pay into the system.

Land on SL is extremely expensive compared to standard server space for hosting web pages, a paid email account, etc... Put another way, what I see being offered for rent of a quarter island is more than enough to set up a dedicated phone line and have one's own server at home. The small smpenders are my segment of the SL economy.

But there's another segment. These are the high rollers and big spenders. If I go out to Serena, the honeycomb continent slightly north of Gaeta and east of Gaeta, effectively the eastern end of the world for SL, it is growing. Some individual or group is buying and creating island after island and then renting at least some of them out at $271/month. The island creation group is sinking thousands of dollars into the virtual world. I can't even gaguie their thinking without spewing out a whole river of psychobabble. All I know is they exist.

I suspect it is with this third segment that Linden Labs makes its money. I suspect this because mainland Second Life lacks the building codes and to some degree the support necessary to make life easy and comfortable for the small spenders and nonspenders. That would be a separate rant, mainly about walkability and self-filtering. As long as SL can attract and keep these big spenders' wallents flowing it will be around for its secondary markets.

Also, corporations, professional associations, and universities fit into this mix somewhere. I don't think they are the primary market. I did most of my orientation on the NMC islands and wondered what that landmark for Nova Amaxion (not sure of the spelling but it is the hub in Miramare) was all about as I wandered around the academic islands and tried learning to build on a cramped stairway. The reason these are ill served is they are on out of the way islands so cut off from each other and the mainland and to a verylarge extent from SL culture. Should their employees or students escape to the mainland, what they will find will hardly be conducive to work or an academic environment. Also, seventeen year olds (First semester freshpeople with fall birthdays and also early college studnets) are locked out of the main grid. This is a problem for any introductory courses that require a stint in SL. The colleges and corporations are also big spenders though I'm not sure if they pay the full price. If state budgets go sour (California is close to deafult and Georgia asked its agencies for a six percent giveback), universities and colleges may let their land holdings go and corporations will cut "frills."

so where do these big spenders happen to get their money?i doubt they are pulling out of their pockets every month..
just as the rl economy works so does this one..
the big spenders start with a startup fee and good plan to generate money from the smaller spenders which is the majority in sl doing the spending actually.
i don't think they are here to support the lindens without generating income from here and you do that by residents paying rents or buying products.
sure there are a few rich people here that may have sims to just have them but not majority of them..
a lot became big time spenders coming from the small time spender with good plans..
sl would have died long ago if it only relied on the ones that owned sims generating nothing from it's residents.because most of those sim owners would have left if there was no profit or something in it for them.
just as in any economy one hand has to wash the other for there to be a stable economy.

It's not just the US economy - most markets worldwide have been going seriously down the pan of late. Also, SL is not just "international in a way", it really IS international - US residents are not even the majority.

As a Brit, I am wondering if the weak £ will even out the effects of VAT a bit (you end up with more ££'s for your L$ when you cash out) - I've been a bit concerned about us developing a non-european landowners with european tenants model (although the Euro is holding up better than the £ so don't know how the european neighbours are faring).

Another thing that occurs to me is that unless you have a huge amount of money invested (and the majority of customers of content probably don't) playing SL is cheaper than going out, so profits shouldn't fall as much as RL bars and restaurants. Sales could even go up after a bit because of this.

All in all it could be worse - you could be living in Iceland!

There are people on sl who have considerable financial clout and who enjoy the sl world for the respite from teh daily grind. They will always spend money. I tend to see this place as a frontier of communication and an exciting opportunity to meet people. Sl will survive because it offers a comfortable "theatre" to entertain ourselves. It's always a mystery; people pay for entertainment. Cinemas did well in the 30s and 40s of teh past century. Sl will do just fine and ride out this blip. The global markets are fluctuating because of over-reaction.

Go to openlife, make things there to sell, you make killing, ther is nothing to be bought there. I need some hair and clothings and house, some others do too

if you were looking at it as combining countries then nobody would be but if you were to say what country has most residents from it in sl it is the U.S.
at least from what i had read the other day..it may have changed since then.also what i read could be wrong also..lol

Alrighty, after reading some of the posts here, as well as looking at the SL economy page.. I've come to the conclusion that SL doesn't look like it's closing down, infact it's doing about the same as it was a while back, as far as new earnings it's almost doing better. I guess I'll have to stop putting off all my projects! thanks for your impute!

I can see a balance between them..

If you have less money to spend in your off time such as movies out of town trips etc. you will spend more time in SL.. and lets face it the value of a movie ticket is a good amount of stuff in SL..

I don't read US financial papers, but according to the Financial Times the Bank of England say that we will be in for rough times for a few months and then it will all sort itself out. Being as how the current financial set backs are international in flavour, it's likely that the Bank of England will have used US economic analysis in producing their analysis.

The thing with recessions is that they happen a lot and most of the time we don't even notice. The media cry doom and gloom and talk about the days of the depressions of the '30s and the '70s, but in real terms the economic outlook is no worse than in the mid '90s. Infact, it's not really a recession, merely a return to normal after 10 years of abnormally good economic fortune.

Will I have sympathy for those poor people who may have negative equity on their houses? No. You sons of bitches have kept me out of the property market for 5 years. If a crash in the housing market comes, I'm going to buy like 10 of your houses and be all "look at me and all my houses that I got cheap as chips". BOOYA!!

I think it was Stalin who said "Everything is connected to everything else." But he was a commie, so what would he know?

lol yay!! you deserve a break \o/
all a recession is is two quarters back to back of like 10% decrease in domestic sales..

most times they are gone before we even knew we were in one lol
sometimes they aren't..
fuel prices are really helping a lot right now and the dollar is looking pretty good..
i was really suprized to see a barrel of oil at like 62.00 ? it may have been 67.00 i forget..
how long it will last is hard to say because we have a new president and a bail out package and banks just heading right to the fed instead of their investors..

i haven't watched the market for a week or so,so i am a bit out of touch at exactly what is going on with the big picture right now..i needed a break after all the turmoil over the summer from it..

Correction; two quarters back to back of economic shrinkage - basically, a reduction in GDP (the sum total of all economic activity within a given country). Prices of every day commodities are used as an indicator of inflation, among other things though.

Haha this is true, I've been waiting years to buy a house. Now I am sat on a fat deposit and waching the prices fall. About 14% in the past year in my area.

i should have said spending instead of sales..
i didn't really feel like going into depth because i was trying to be playfull!! lol

so here is a quote cause i just hate my brain today and now you make me cry so bad!! lol
kidding.
i stand corrected hehehe
i pretty much had a feeling you knew what a recession was.i was just putting it out there for the curious..

A recession is a decrease of less than 10% in a country’s Gross Domestic Product (GDP). The decrease must last for more than one consecutive quarter of a year. The GDP is defined as the sum of private spending and government spending on goods, services, labor and investment.

ok now go buy some houses and sell me one for a dollar profit or i swear i will start talking about securities *giggles*

Not sure where you're getting this "10%" malarky from. 10% shrinkage in GDP would be a monumental disaster. IMF predictions in this morning's paper are that in 2009;

the US economy will shrink by 0.7%
the German economy will shrink by 0.8%
the Japanese economy will shrink by 0.2%
the UK economy will shrink by 1.2%

The IMF predict that there will be a total shrinking of the global economy of 3.7% in 2008 and it is predicted that there will be an overall shrinkage in the global economy of 2.2% in 2009.

Now, I'm confused; if the overall global economy shrinks, wouldn't that mean that money would have to be leaving Earth and going somewhere else?

It's those pesky Martians again. Coming here and taking our jobs and our womenfolk.

EDIT: Also, here in the UK the Bank of England consider that two consecutive quarters with no growth (i.e. a 0% change in GDP) counts as recession too. Taking account of inflation, that makes sense.

i say if we all shrink we have a do over and try it again lol

When houses or company shares lose value, the money goes nowhere, it just vanishes.

Interesting way to put it. When the market crashed and the value of the company stocks I have in my retirement plan tanked I basically lost a house over-night.