The current economy within SL

I've met people who came into SL just for specific events. Events which I would never have known about if I hadn't been hired by the developer to work on the preparations. Apparently there are quite a few universities and other organizations operating in SL out of the public eye. I wonder if it's possible that people like us who come in ones and twos to enjoy making things, socialize and maybe run a little business are more or less incidental as far as LL is concerned.

Um.. this seems to add up to more than 100%..

Edited: Oh! I just noticed the decimal point. Never mind.

Very interesting data. I agree with limiting the pool you did stats on. I can't remember- does LL release stats of how many residents have ever spent money in-world? Or how many have ever bought L$ from LindEx?

I don't think yet, but I do think that will be the case eventually. Residents will just be a number, someone to wring as much profit from as possible. *Just my opinion. I could be wrong.

Yumi that's an interesting way to put it, but it could also be looked at differently.

I log in and bust my tail for other people's problems on every login. About two dozen notecards and maybe 100 IM's a day, all requiring a response.

The 'poor' in SL really aren't the poor. Many of them are essentially 'independently wealthy from an exterior world' and the so-called 'rich' (if you would call me rich in SL - it nets me roughly $L 1M/mo before taxes) - are running around like waiters on roller skates for the so-called poor, who are doing whatever they like with their time.

For me it was different. I am still considered relatively new here but...I came in SL and the first thing I learned was to camp. (before I understood that it was just gaming the traffic)...camping netted me a couple thousand lindens to get me started with some hair and clothing. Then I played Slingo...got really lucky and hit somewhere around a $L1000 pot. There was a sign advertising that host were needed so I signed on to host Slingo...then I moved to Pizza...before I knew it, between pay and tips, I was up to $18,000 and hadn't spent a dime on the game. Chump change I'm sure for some but for a newbie, I was happy. Soon though I got sick of everytime I logged onto SL, I was being called to host for someone who hadn't shown up for their shift. I decided at that point that I would just buy my $L - I've bought $L twice. With the nest egg that I had already accrued, I may have spent $15 of US money altogether to date...yeah, I might host again if need arises.

I've made large purchases...$8,000 purchases and still my $L hovers right around the same as it was before I invested any real life money. I'm a renter, My partner and I rent a 4096 piece of land with a large 3 story house on it. Both he and I have our information on line. I eventually plan to go premium so that I can purchase land when SL gets it's shiznet together. Will that ever happen?

This "inequality" argument rests on two false premises.

One is that most people's reason for playing the game is to make money from it. The other is that their satisfaction with SL or "immersion" in it will therefore be directly proportional to how close they are to making the largest income other residents earn from it. All this may be true for some people, but in my experience very few.

Most people are not in SL to make money from it at all; I daresay the overwhelming majority are not. Of those who are in it for the money, I daresay they are far more concerned with whether they meet their personal financial objectives than whether they are making as much as Stroker with his SexGen beds or Desmond Shang with his Caledon empire. This "Politics of Envy" argument is even more irrelevant to Second Life than it is to First Life, and IMO it is largely irrelevant to most people in First Life aside from ideologues and political partisans trying to make hay with it. In SL, I suspect many businesspeople just want to cover their SL expenses. I'm aware of a few that are invalids happy because they are able to earn the cost of their meds from SL and therefore be less of a burden on their families. I assure you, they are "immersed." I'm sure there are quite a few similar stories out there.

People are "immersed" in SL for many reasons. Most of them have little or nothing at all to do with making money in SL: Making new friends, having a creative outlet, playing out personal fantasies important to them, having pixel sex, exploring a new world of on-line possibilities, even treating it like a "game," or just having a welcome distraction from their daily lives. As far as "immersion" is concerned, it would probably be more relevant to work up a spread sheet measuring the distribution of time spent on sex poseballs by Residents. Measuring "immersion" by dollar income is rather like measuring people by their shoe size and ignoring height, weight, body proportion, coloring, hair and eye color, IQ and measures of their social lives. In short, glad you had fun with your spreadsheet, but as for the results, so what?

Good point Har.
Obviously every L$ that anyone sells for rl money is a L$ that someone else bought with rl money. (Including the stipends which are part of what we get for paying for premium.)

That is me - I came to SL to hear a prominent judge speak. I arrived a couple of days in advance of the event and I guess I got hooked. My mom had mentioned SL thing and the making money thing and I was like, pffft. But look at me now... I have a second job in here. lol.

I agree with you, and for that reason I know that a Gini coefficient isn't the best way of looking at it. (To be honest I was just intriuged to find out what it was. *blush*) It _would_ have been nice to compare the total spends, but I don't know if they offer such a thing.

And I also understand Desmond's point, that another difference between the SL economy and that of the real world is that many of the big earners have to work their butts off to be in that position (as opposed to the real world where at least some of the mega-rich can earn money just by being mega-rich), so amount of money earned in SL doesn't have a good correspondance with lifestyle. On the other hand, there _is_ some correspondance with lifestyle, in that (for example) someone who makes more money is more likely to be a good builder, and therefore to be able to have much greater access to 'luxury items' (they can just build them themselves) than those who are not.

But a point I don't agree with is..



I think it's _much_ more important to SL than it is to RL because of SL's optionality. Most people don't kill themselves IRL because their neighbours are doing better than them. But I have definately known people to leave SL because of this, or become economically inactive. The problem, basically, is that it means that competitive people (and lots of people are competitive in ways they might not be conscious of), when they find they are sure to lose, enter a state of "settling and making do" and once they are doing that, why not settle and make do with what you can do without putting any more US$ in, too?

I mean, there was actually a post on this forum where someone actually asked, what was the point of playing SL when they got to live in a little house near where a richer resident had bought the entire rest of the sim and had a mansion and multiple swimming pools. Now, I know that in reality that resi might very well not have earned that money in-world but instinct says it's likely - although it would be nice to see a chart of the balance of in-world and tier spending by in-world earners as against L$ buyers.

Now yes.. envy isn't a positive emotion or one that should be encouraged.. but we have to sell to our own customers.



The problem is that almost all of these, with the exception of making new friends, wind up having money involved in them. Playing out personal fantasies, you will need to spend money for the content, and unless you want to do the same one over and over again, you'll need continuous money for more and more. And treating it like a game, well, there is no better analogue to score than L$.

The comment about immersion wasn't just drawn from the spreadsheet, it was drawn from other things too. One of these was the comments by Desmond and others which suggests that the very richest people have to spend lots of SL time working to have their money to cash out, and thus they are augmenting rather than immersing because a significant part of their motivation lies outside SL.

My take on things goes as follows.

FInd what you LOVE to do in SL and make that your business. Because if you love what you do you will work harder at it, create better quality goods(service etc), and not be so very concerned with the money. IF you love what you do any out of pocket expenses can be called entertainment rather than investment. IF you love what you do you customers/clients will recognize it immediately and be awed by your attitude and your work. That tends to make for repeat customers.

I really don't believe the economy is crashing. I think it is reinventing itself again. Even in the worst of economies something sells be it goods or services. The talented entrepeneur will find what is in demand and run with it.

DO the constant assett server bork ups hurt sales yep you bet.
DO creators having to deal with an insane number of complaints about failed delivers hurt sales yep again
IS it impossible to make money NFW.

This is a really interesting thing, the motivation part.

Strange as it may seem, I sorta fell into what I do in SL. I don't dislike it; I'm a people person, and if I truly disliked helping people I wouldn't have lasted the two years I already have. I've got my own biz in RL, but it's pretty slow - I import from asia where I have my products made, and I have distributors sell them for the most part. So my typical day is: email, email, phonecall, email... phonecall... email. Sometimes I send a box onward from mainland China to distributors. I'd not even do that, if I could ever trust the distributors with my sourcing.

Now, I used to fill my day with electrical engineering consulting. I think most people know how that bills out. It ain't bad. But it's a lot of hours. Ever heard of an engineering project that wasn't behind? The average engineering project runs 58 days behind, from a survey done a few years back in an industry rag.

Recession is a great time for consulting, too. Workforces are cut back, there are hiring freezes... but companies have their backs to the wall and need somebody, anybody, to step in and do what the missing employees normally should be doing (ain't it shortsighted?)

Two weeks ago, I had a strange test - literally within 3 days I got a massive, desperate request for consultant work, and another freak situation - an old industry friend needed me to run his engineering department, stat (that's the sort of thing I used to do in the 90's).

I turned them both down cold.

Financially, that's crazy. But let me put it this way: I get by well enough. My kids spend time with me. Sometimes I take a nap in the afternoon in my office. I don't have to go see the stress therapy lady any more, and I'm not choosing between the atevan prescription or more meditative type stuff to gain control of the pesky anxiety symptoms. I do alright, between my humble RL biz and SL. If I lost the SL, I'd get by well enough with my RL biz as I had before.

For anyone that has ever done EE / management across twenty years, they will understand my next statement: I swear, I would rather be a grocer in a small hick town than ever go back to it.

So maybe that's deep insight into one situation, maybe not. I'm lucky, I know I'm not without opportunity - perhaps it's easier to be cavalier when there's always a fallback. But if I was truly money motivated, I sure wouldn't be tapping this out at 4:32pm on a Thursday after the opportunities I've had lately.

Just something to consider.

I've been doing Aerospace Engineering in southern California for over 8 years, and I'm still paying for the groceries I ate in grad school. My brother quit school after junior college. He delivers sandwiches in a small college city in the middle of Illinois, and he owns his own house. I often think about having him get me a job.

Your post made me think about this a great deal, Desmond, thank you. "Motivation" was apparantly the wrong word for what I was trying to do, and I suppose I've kind of thought of a way of trying to say what I've been trying to get at.

What I mean is.. for myself, and for others I've spoken to, satisfaction from SL can come from different sources. There's the social side, having friends, and also social validation - being treated as the kind of person you think you are or that you want to be - whether that's "a princess", "an artist", or "a kind person". Then there's content, not even necessarily content that you own or create, but just content that is there, representing something you wanted to see/do in the world. Then there's competence, the feeling that you can achieve things that you want, or that you will be able to in the future. And finally, there's income, actually making L$, and although for some people that's satisfying only because they want the money, it can also be satisfying because it confirms that you've done something that other people find valuable, which is a very nice feeling.

Now I expect it's clear, that these four - Social, Content, Competence, Income - are linked together in many ways. Income lets you buy Content, Competence lets you create it. Providing Content can attract Social attention. Even if you don't provide the content, jus knowing about it can attract attention to (as on "exploration" blogs). As mentioned above, Income proves that you're Socially valuable, and you can be socially Competent too, by being good at organising people or running events or just being "the life of the party".

But the issue is that, back when I joined in 2005 there was a lot more of a feeling that these were linked together in the world too. There was the feeling that you would do what you enjoyed in SL, and that would increase your Competence, which would in turn create Content or Social satisfaction for you, which would in turn provide Income (remember, this was back when Dwell still existed, so Social and Income were linked back then).

But nowadays in 2008.. those linkages have been disrupted. Competence and Content is now a lot less certain than it was before because there are professional artists out there now. The rise of marketing has demonstrated that Content and Social's linkage is weaker - now, just creating good things won't get you noticed, you need to put work specifically into being noticed, too. Social and Income have been separated for a long, long time, since dwell and stipends were dropped and many new users exist in entire social groups where nobody has any L$. Those two factors also separate Competence and Income - I often see new people handing out some excellent, salable, items for free because either a) they know nobody in their social sphere has any money, and/or b) they don't want to or can't afford to get into business marketing.

The problem is that this new splintered satisfaction just.. well.. isn't as satisfying any more. For at least some people, it's not satisfying to know that you could create or buy things but nobody would pay attention to them. You could make money, but you would have to do nothing else in-world. You could take a class, but you still won't be good enough to be noticed. Well, you'll have to settle and make do - but that, for many people, just means finding some good-looking freebies and going clubbing as the ne plus ultra of your SL experience Without those four working together things start to break, and I think that's what might be causing willingness to spend on SL to drop and as such the economy to do worse.

Yumi, you have been touching on this for quite a while, but I always was never quite clear on exactly what you were trying to say. But that post crystallized your points quite nicely, and make a good summary of the various experiences and motivations in SL. Nicely said.

That's a long post Yumi, but I think that's about the shortest way possible to say it. I agree with ya, for what it's worth.

"social, (digital) content, competence, income" - this *directly* reminds me of this:



http://abcnews.go.com/Health/story?id=116613&page=1


Quote from article: "Money, Luxury Can't Buy Happiness"




Basically we went from small, tribal island living where just about every individual is valued... even if we didn't have all that much... to life in the big city. Where more individuals are about as problematic as they are valued... or worse.

So what's the cure?

I think it's partially diversification - breaking off into smaller groups. Well, we do that already ourselves I guess. There isn't one mainstream community - but there sure is a grand, unified economy.

I'm not sure what to do. When there are 100 million people here and a concurrency of 500,000, how does any individual feel valued?

It's the ultimate form of globalisation gone wild. But if we can solve it, we've surely learned something important.

Very well said Yummi. There is some serious food for thought there. It is obvious that you have put a lot of thought in on this topic.

Thanks for sharing!

Desmond, I really liked your comment about "being a grocer in a hick town".
When you boil it all down, what you do for a living, or how much you get paid is not nearly as important as enjoying what you do. No amount of income can truly compensate for stress and frustration.

The economy of SL is just a reflection of real life. Sales go up and down, sometimes very good, sometimes nothing. All depends. I still see this as viable and people are still buying items, that they want.

Gambling affected some clubs, but most gamblers never tipped a dime to anyone.

My two cents on economy within SL ,

i now have a business over a year in SL. At the beginning all was just fine but it starts to get worse and worse every week.

1. Reseller Stores popped out everywhere a gown costs 300ld
2. Reseller Stores still popping out so they start going down with their prices to sale 200ld
3. Copybot now the Reseller Stores also got better and better stuff for less and less prices
4. Gowns costs only 100ld
5. They changed the search function that it isn't alpabeticly sorted anymore and that backdoor for cheap advertisements on top of the search list are gone
6. Gowns costs only 50ld
7. They add taxes for european countrys making the rental prices higher same time the product prices are falling in some regions ofcorse still expansive good quality stuff is bought but less then befor
8. I see Bots everywhere. .. bots .. ghosts . The search function traffic based is fooled by these everywhere on the top of the search list are ghost towns and clubs. With no real customers. And the real places are falling down the list.
9. SL stability is so worse that people crash constantly and sales decrease again
10. Gowns from resellers now for 0 l$ everywhere
11. SL stability is so worse that they disable logins wich cause in that time nearly no sales and the places traffic fall down
12.Due to SL stability again disables logins ....
13. SL Asset Server and Database Issues wich cause Moneystales everyday sales are impossible in that time.
14. Again disables logins no sales
15 Again Database Issues Moneystales , cant progress process messages no sales possible traffic still decresing and on next day less customers are visiting the place ....
16. Now they start to disable functions everyday in the maintime avoiding people to buy or make traffic
17. Today they even start to disable logins to avoid problems on rush hour if that gets to standard what kind of solution is it to prevent the asset and databases to crash with restricting the login and decreasing the number of users online with that method? Anyway it doesn't help i got moneystales several times today again.

When will this going to end ?

This thread really upsets me. Second Life should not be primarily an economy and I don't think LL ever intended that to be it's sole use. No it's not easy to become rich or even make a living out of SL but that is true of RL too.

If RL designers put as much time helping the public as residents in SL do, do you think for a second we would pay as much money for their clothes/sunglasses/bags etc.

Yes SL has stability issues but if we keep demanding improved graphics, environments, features etc we will have to put up with the risk of instability. If you want stable get into WOW or one of the other pretty expensive MMORPG systems.

SL is a social networking tool, a designers tool, a personal experimentation tool and a cultural outlet that allows people from around the globe to interact and exchange memes in a way previously unheard of by the human race.

To focus on the economy and the difficulties in making a living is to belittle the possibilities of SL.

I'm guilty...I run a shop...I want to own land but it wouldn't kill me to lose that and I give away more in free scripting, design and building help to friends and strangers than I would ever make from selling products.

What I give away is friendship and community. Does that have a price?


Rant over

The economy is far from its sole use, however with regards to the economy people need it to function to pay their tier. The tier costs are expensive here, certainly when you get above a 4096M parcel, compare that to what you pay for WoW and this whole ship sinks if people can't get close to their tier back and without tier payments, hardly anybody has land. There's no free lunch.



The 25 group limit puts a huge whopping slap on that.

Sharing resources is wonderful, development, interaction, community, but someone, somewhere has to pay for it and there aren't the numbers of community loving individuals who will pay the tier fees that LL charges to make that a realistic aim at the moment. However there are ways and means of helping residents alongside the economic needs.

Ah, this is what SL is to YOU. Now, personally I would prefer it remain as you have stated in this post, but realistically, SL is whatever LL thinks will make them the most money long term. They don't give a fig about us, only about how to keep us ponying up the RL currency. Also, if they figure out a way to transform this into a corporate or education or any other platform, they might very well try to phase us social networkers and self employed business people out, or nix our accounts. Nothing in SL is set in stone, if LL finds a way to make more money wtihout it.

I think SL is all about economy because without that aspect SL wouldn't be like SL. You wouldn't have such a big world with a cost free basic account. That all is about economy. because the rent prices for the sims payed to the lindens are earned in most times out of economy based SL things like selling something on the sim to cover the monthly tiers to the lindens. Or sell land on the sim for residents. So if the economy crashes or it wouldn't be possible to make money in sl it wouldn't be as big and complex as it is at the moment. And i think it will collapse in the future. Because there are to much sims , to much shops, to much freebies, to much stability problems. If you look arround on the most nice places like dancingplaces , parks, clubs, adult regions you have a mall or something else to cover the montly costs. Otherwise these places wouldn't be there.