The current economy within SL

Collete, that still doesn't take L$ out of circulation. Even Estate owners have to pay tier in real money. Until LL starts BUYING L$ from residents, it's still a (relatively) closed loop. Most of the L$ are still in-world.

Max

Very True.

the number of premiums has little relevance to the economy, renting land has many advantages, besides that they could pay weekly,

- no premium fees
- you can rent any amount of land (no tier boundries), and cheaper then LL tier
- no landowner risks, ie. land prices or "lovely" neighbours






i think you underestimate the number of mainland rentals ?

Right now the inworld economy is ridiculously strong, from where I stand.

Maybe too strong, and due for a correction... hence my extreme conservatism.

I personally think the reason sales have gone down in some cases is because of the much larger numbers of creators selling their goods in SL. I have been building my biz and while there are sales ebbs and flows, my bottom line has increased month over month consistently. But if someone else starts making and selling what i do, then i would expect my sales to fall.

Just my two cents...

I was only speculating there must be a ton of people paying their tier in Lindens due to the fact that premiums haven't gone up, but theres a whole lot more land on private estates these days.

Someone else thought that people buy more lindens than they need for that tier so it should help with in world spending (maybe they do, I don't know)

I think this has really hit SL business over the last week - the problem is unreliability of the SL software. You need to feel confident before making any money transaction, ans SL has had recurrent problems lately.

Oddly enough I've had an unusually good week.

I'm sorry, but I haven't seen any data to say that the economy has crashed, or is in the process of crashing. Basing an economic trend on one person's tipjars and belief is one person's perspective, but doesn't make it a worldwide fact.

We have had a few people come on here, claiming that the SL economy is crashing based on their business failing, and blaming gambling, VAT or whatever.

There are businesses doing quite, quite well in SL, and, like Desmond, for them the business world in SL is very strong right now.

The ways to make money in SL are going to change, for sure, as the demographic changes. Gamblers probably tipped a lot, and the end of gambling may well have put an end to that. I know escorts who have been complaining for months that business is very slow. You have to go with the times, and find how people are spending money in-world.

My highly empirical viewpoint is that the economy is booming right now. Let's talk about why THAT is happening, so that others can learn and maybe benefit from it.

Yup - the economy is slowing. Check out the premium account growth stats in the following link (fourth graph down on the left):

http://taterunino.net/statistical%20graphs.html

The growth has been steady, but low, for quite a while, but now more paying residents are leaving than joining (or staying). This is the core spending group in SL.

I am not convinced that either gambling or banning banks has slowed the economy - these are sinks - they took money OUT of SL and put it into the pockets of a very few people. It is possible that SL attracted a lot of gamblers that spent money in-world on things other than giving it straight to casino owners, but I doubt the gambling ban has had much impact.

The real killer for SL's economy is the inability to use SL as a product that can be enjoyed. If it is not enjoyable, why spend money on it?

Can you imagine buying a TV that would often:

- not let you change channels
- randomly freeze or switch off
- have a picture that was just a bunch of gray shadows
- not even be able to be switched on
- etc.

I am all for pushing the boundaries in developing SL's features, but not at the expense of the features that previously existed, that worked, and made SL fundamentally an enjoyable place to be.

I am all for the principle of freedom to have bots and their drain on resources, but not when those resources are already so tight that you can't log in because there are 20,000 inactive avatars on the grid, all loaded up with 1200 library inventory items, or land bots TPing 20 times per minute, when people actually wanting to explore SL cannot TP or have a reliable inventory.

~Snowman~

Sounds good. I'm always open to ideas.
And although I mentioned that my business slowed down when gambling was banned that was just the business at my clothes stores. I make more money from contract jobs and that is as good or better than ever.

I'd add peole who aren't leaving, but may be downgrading to basic accounts. *raises hand* Using the TV analogy further it'sike paying for a whole bunch of channels you never watch. They have to make the idea of a premium Membership more attractive to a wider range of users. Not everyone wants to own land on the mainland, if at all.

Might it make more sense for LL, profit-wise to sell more islands and fewer mainland areas?

Crashed? No.

Not keeping up with the raise in Population? Yeah.

http://spreadsheets.google.com/pub?key=pxbDc4B2FH96NzYTkCnb-SA&gid=0

From Jan 2007 to Jan 2007 Population Quadrupled, Total Logged on Hours tripled,

But USD$ being spent on L$ during the same period only went up 40%.

I am amazed this hasn't been done already. Perhaps they could offer two or three premium plans, priced the same or almost the same, with different choices of perks.

Although, I'm not old enough to be sure... Actually... I think TV was exactly like that when the service was 4 years old. (^_^)

I love spread sheets.



There wasn't much competition then.

I bet someone can extrapolate bot population through this.

I do think a massive increase in Bots would help explain why the average user buys less than half the Lindens today than they did a year ago.

Since LL didn't bother to keep bot accounts separate

I'm not an economist or a business major, but I do find that the SL Economic statistics tell an interesting story. http://secondlife.com/whatis/economy_stats.php

**Looking at "Unique Users with Positive Monthly Linden™ Dollar Flow"**

The total number of users with a positive monthly cash flow of US$10 or more decreased in from January to Feb. 2008.

The number of Users in almost every bracket decreased, except at the bottom where Users earning less then $50 and less then $10 increased.


**Looking at Population Growth and US$ exchanged between residents Sept 2007 - Jan 2008**
I made some graphs of my own. The average number of dollars exchanged per resident has decreased while the population has grown.

Sept. 2007 Oct 2007 Nov 2007 Dec 2007 Jan 2008
Population Growth - registration 9596742 10570615 11175710 11704934 12240161
US$ Exchanged 6685585 7069494 7272894 7566723 8231372
US$ Exch/Resident 0.6966 0.6687 0.6507 0.6464 0.6724


**Looking at US$ spent per hour of usage**

Total Hours used by all residents 24138413 25941525 24625902 25646287 28274505
US$ Exchanged 6685585 7069494 7272894 7566723 8231372
US$ Exchanged per hour 3.6105 3.669 3.3859 3.3893 3.4349

Which shows that the dollars exchanged/hour the last 3 months were less then the previous two months.


**Looking at % of users with a Positive Monthly Linden Flow**
The percentage is decreasing.
% of users with PMLF 0.004650 0.004650 0.004358 0.004329 0.004512


No matter how you look at it, spending has decreased while registration and hours of usage has grown, also the rate of growth has slowed. People are spending less. At the same time the numbers of businesses have increased, there is lots more competition for every dollar spent.

Do you think it's possible that the bot inflated population figures will help LL to acquire enough additional capital to make significant improvements down the road?

Desmond, I do think yours is an unusual success story. You have a well deserved excellent reputation and your on going success has probably been helped by the increase I have seen lately in people telling horror stories about bad experiences with unscrupulous landlords. Every bad landlord helps drive more business to those who have a positive reputation.

Yep

At the risk of inflaming the pie haters ...

even those who "finally got a piece of the pie" are having to make do with a smaller and smaller slice ..

cause the pie isn't growing fast enough to feed all those who have plates.

Yeah, and as the rl economy gets worse probably more and more people will be trying to make money in sl.

More than just bots, but general free-account "lookie loos", non-bot campers and individuals with multiple alt accounts (used for various purposes that don't leave an economic foot print) need to be factored in.

Myself, I've been playing as a premium member since Q1-2004 and only actually go buy Lindens when I want to buy more land but don't have the Linden cash on-hand to do it immediately. The same goes for my partner Angel. But we do spend our share in the economy.

So in short, I'm not sure the number of accounts vs LindeX transactions is a good measure of the health of the SL economy.

I do agree that some sellers aren't doing as well as in recent history. But my personal impression is that it is because there is an oversupply of sellers and people looking to make money vs. people's appetite for consumption in many areas. Plus the sheer size of SL these days. With a bazillion folks selling widgets, I'm probably only ever going to bother visiting a tiny fraction of those widget sellers based on work of mouth or being on the top of a search hit. Beyond that, it's heavily dependent on what shops I stumble across while exploring.

As for the impact of the RL US economy, in my part of the country and among all the people I know things are in good shape, but if I ever had to choose between making RL payments and SL costs, obviously SL will take the hit.