Expanding the SL Economy

In the "Land Prices" thread (5/9/0, Ray Figtree pointed out that significant parts of the SL economy are no more. Gambling is out, unregulated banking is out. Various factors have put downward pressure on escorts' prices, and clubs are no longer the attraction they once were. In addition to the current flood of new land, this is really making it tough for anyone to make a linden these days.

I thought we might kick around some ideas for new activities, things that might revitalize the SL economy.

Ground rules: For this exercise, we are going to assume that L$ will still be convertible to real world currencies. We are also only going to entertain legal activities.

I'll open it with three very general questions: What do people do? And of those activities, which of them are doable in a virtual world like SL? And of THOSE things, what are people willing to pay for?

It's sure to involve sex; and if it involves sex, it's already going on in SL.

People live out the lives they wish they had in SL. They make friends, have families, explore and create. The people who invest, either by renting or owning, really are entrenched in living out this second life. People are willing to pay for the accoutrements: furniture, homes, land, vehicles, animations. Fresh content is in constant need. I love Slow dance 3 and 4, but wow does 7 rock! I'm so looking forward to 8. And I heard that Lovescene 2 is in development...

I would say that there is a need for good roleplaying environments that are financially feasible, for an immersive experience. Chaos is on to something with Felonhall - a unique, well built place that fosters roleplay. But what is the business model? Is it working? Is it worth the time and energy put into the build?

We have to find and properly develop niche markets. Gor, Furries - those are well developed. But there has to be something else.

I would say "invent games with an end-point." Make them RP games, whatever, but give them a treasure-hunt aspect, a First Person Shooter aspect, an Adventure game, etc. Make them last for a few weeks or so. So many people come to SL and say "what's the point?" that we need to give them a reason to stay.

Well...

Pre 2007 the ratio of producers/innovators and consumers coming into secondlife was probably 1:3 (1 creator to 3 consumers) now it is probably closer to 1:20.

The majority of people now in secondlife do very little except sit around sofas talking about nothing with their sl friends. They buy furniture and prefabs but are not bothered about quality...as seemingly the rest of secondlife is becoming.

They buy L$ with rl money...which is a sign of hope. Generally people go to clubs less... the sex industry seems to be saturated with consumers with no spendable money.

The hope for secondlife is to attract large companies to carry out many RL operations in secondlife and take advantage of the 3D environment.

We have to accept that if secondlife keeps on going the way it is, it will no longer be a centre for innovation but just a 3D myspace or facebook.

As for retail business, 99% of people starting now have missed the boat by about 2 years as the clothing/other items market is tied up by well established brands that have the influence to take up 90% of new players as clients.

The hope for other businesses/services that focus on quality, is to spend huge amounts in brand image to appeal to a minority of the population.

Start up businesses are now 1000% harder given that Linden Lab in their infinite wisdom stopped investment banks. Now with the land market set to crash (as LL release more land than is being bought per day into an already saturated market) large economy turning land dealing businesses will be put under strain.


Gosh im glad i've had my rant xD

One niche in the SL economy that's been poorly exploited is advertising. SL has lots of businesses that want to communicate to potential customers, but very limited channels for doing so. AdFarm ads just piss people off. Classifieds are expensive for high placement--especially as more people have moved to using Search/All. SL-based media have fairly low penetration among the bulk of SL consumers. There is a lot of money there for someone who can find a non-obnoxious way of advertising to a mass audience in SL.

1) Well i would say a stable SL platform & enviroment has to be a LL's top priority in order to retain new players. It's these new players that need to be converted into regular players and ultimatelly help sustain the current scales of economy.

As it stands, SL appears to be one large shopping centre.....you have to really search hard & wide for those fun areas. We have far too many SIM's, far too many Malls, far too many creators, far too many clubs, far too many false dreams.......and not enough regular online users.

2) Reduce the entire Tier structure making it more affordable for players to rent or buy land. By reducing tiers you also make it more affordable for those residents from those countries whose average salaries are less than that of Nth America,most of Europe, Japan & Australiasia.

3) Create (or segregate) part of a mainland continent that allows gambling and to access it you require a Pass like Age Verification to show that you're not an American national. After all Online gambling is allowed in most countries and American players only constitutes to 30% of the SL population......so why not? We saw the effects of how the gambling ban impacted the economy. Reverse it!

4) Ban camping bots but not real camping. Change the way traffic is counted, to something that is harder to game.

5) Better planning by SL regarding land supply. Only increase mainland supply if the demand supports it

6) offer Tier discounts for SIMs that are of public interest....maybe a tier reduction for RP sims too! I'd rather see more RP sims, then SIM's being turned into a yet more huge shopping mall with umpteen camping bots!

hmmh..thats all i can think at the moment

Not a bad summary of conditions, Jo...but no rants please, we are looking for constructive ideas.

I'd add that it's OK to think outside the SL box...if LL could add something or change something to allow a new or different economic segment, then let's hear it.

Skywriting in WindLight clouds?

There'll always be new ways to exploit people. LL being a bunch of lovely naive new wave hippies, they're sure to give the sharks plenty of opportunities.

I'm betting that LL doesn't lock the office doors at night. Now there's an opportunity!.

Like someone else said, stability and the ability to host large gatherings is really the key. With those two things, SL could be host to many more web-based classes (I'm thinking university level stuff, or classes for home-schoolers) and corporate meetings. If we can get people in for RL purposes, and the grid is stable, they'll eventually venture out into the rest of SL, which is good for everyone.

Rarely work because sure they say what's the point but if they have to choose between being paid to go on a dance pad and pay to play a game they choose the former :/

The way I see the economic structure is in two sectors. Goods, which we have in abundance unless there are strides in more tech advances like the thread about the new avatar to avatar viewer a res has invented. Services, which there could be more growth. What new services could be offered? Training? Avatar enhancement? Landscaping? Tech services? SL Tourism? Fee for service is strong irl. More Custom work? I notice everything is based around goods. There is potential growth in the service fields.

We can't ignore the ongoing serious problem of what new members of SL experience when they join. I recently created an alt, and went through Orientation Island to see if anything had changed since I joined last June. Nope. I'm amazed any of it made sense to me. But I was fairly familiar with SL when I joined, and had a goal in mind. I was going to make it work.

Orientation needs to be clear, interesting, and creative. The new avatar needs to be given some sense of what's available in SL. Currently it's confusing and dull. And after OI, the poor avatar stands a good chance of TPing into the middle of an empty mall or an ad farm. Bleah.

Start with something simple. Give the new member a list of interesting places to go. Show them the best of SL. They can discover the rest later.

Off the top of my head...


1. More competitive games. Maybe with a betting aspect to it. Yes gambling is not allowed but gambling on the outcome of an in-world sport IS legal.

2. Like Oryx says, more activities with an end-point or rewards for completing. These should be long but fun tasks. Think of those things they make people do in MMOs all the time. Complete a quest, get some gold, a piece of armor.

3. A better search engine. We can't do anything or build anything up if no one can find anything.

4. An overarching supervisor of some sort. The hodge podge willy nilly style of development that we see in SL is just confusing. We need zoning. We need a benevolent dictator of sorts to keep people focused on doing certain things in certain ways. Like Mr Shang.

You're probably right in principle, but not sure we can ever determine those percentages.

It's a shame that their is a lock regarding established Brands protecting their little empires and slices of the "sales pie". Owning a large mall myself, i get to see a wide range of creators particularly in fashion. I've seen a increase of new creators coming out of Europe (particularly French, Italian, Dutch, German & Belgian)....and in many cases their designs & freshness are actually superior to that of some of those established "brands". Their problem lies in marketing and getting their head round the various Search engines....and of course the way Fashionistas are able to shape opinions via blogs, magazines and other forms of media. If they could ever break through those barriers, you'll see the changing of the guard! There are so many good creators out there in all sectors that go unnoticed. A shame in my opinion.

Hopefully "Showcase" replacing "Popular Places" will help in this area.

That reminds me...I have a copy of a "sightseeing HUD" This free gadget contains LMs for a dozen interesting SL places to visit, and it's easy enough for a newbie...just wear and go.

I'll send a copy to Lucrezia for the Newbie Info Kit.

An interesting question. This thread has generated a couple of dozen replies in the time it's taken me to write this, so others may have said similar things, in which case apologies.

It strikes me that there's a lot of potential in the knowledge, experience and time of residents themselves - on all sorts of topics, both SL-specific and non-SL - and yet no mechanism in place for people to be able to offer their services (for a fee) on an easily-searchable in-world database of skills, together with a feedback/rating system and a mechanism for payment that protects both parties.

Keeping it with SL skills for the moment, assume person A is an expert at scripting, who's currently unemployed in RL and has time on his (or her, etc) hands, plus could do with some income to help pay the tier on his property until he gets a job.

Meanwhile, person B has built a lovely house, and is wanting to sell it. but is struggling with trying to adapt available door scripts to suit an unusual door. B could certainly use someone who could adapt a script or write one from scratch, and his/her Lindens are more readily come by.

So, B looks on the database, searches for scripters, and sees A's details, with 100% positive feedback, etc, so registers a request for a quote. B says he'll sort it out for L3500, and A likes the sound of that. A pays the service provider the full amount in escrow, which is held by them until both A & B agree the job is complete, whereupon the L3500, minus a listing commission, is passed on to B. If B does a poor job, or if A is unreasonable about B's performance - well, there's feedback and a place to write a review.

Moving the idea into RL skills, translation services immediately spring to mind as an option, but pretty much anything goes that can be done through SL. But to be widely successful, SL or RL, it needs that core service matching those with offers and those with needs.

Good ideas. One barrier to personal services or custom work is cost. If I make an outfit and sell 1000 copies at L$200 each, I make L$20,000. That's a reasonable return on the time I spent making the thing. If I make a custom outfit for a single client, I'd have to charge L$20,000 for the same return on my effort...and few residents are willing to pay that high a price. On the other hand, there ARE people who value the unique and rare, so maybe there is a market here...

They stopped _unregulated_ banking. Anybody who wants to do the RL paperwork to register an SL bank/investment firm is free to do so.

A Services Exchange! Excellent idea. There's an example of this in RL, I think it was called "Freelancers" or some such. A website that got people with skills together with people needing those skills.

Assuming your numbers are correct, that's a good thing. A one creator to three consumer marketplace is not sustainable if you expect any creators at all to be able to earn a RL income from SL. I do question whether the ratio was ever as low as 1:3, though. Maybe using the term "creators" is misleading. There are lots of people who make stuff in Second Life but don't sell it, or make minimal effort at selling their creations.



I strongly disagree. The general quality of clothing, furniture, houses, etc., has gone up over the past several years. That's the main reason it is more difficult for a new designer to break into the SL market. There is a much steeper learning curve. Many top-of-the-line items from two years ago are retired or freebies now.



Been there, done that. RL companies can be a part of the SL economy, but to depend on them as the major drivers of the economy is risky and foolish. RL companies come and go. Even some of the largest Metaversal Development Companies (such as Electric Sheep) are diversifying away from Second Life.



Huh? At this point I'm wondering if I'm using the same virtual world as you. I don't know how to reply to this.



Investment "banks" have never been a significant driver of the SL economy, other than to suck up L$ from people foolish enough to put their money into these ponzi schemes. I would be very surprised if you could name any business--that was not one of those "banks" or controlled by the people behind one of those "banks"--that ever became sucessful based on starting capital provided by a SL "bank".

The reality is that the amount of starting capital needed for a Second Life business is minimal, unless you are trying to buy islands.

I agree that platform stability is an issue. (It has always been an issue; I've been here since 2005, and I can't remember a time that SL was not in eternal beta.) But a more stable SL would certainly increase retention. But more residents would make the grid less stable. It's a vicious circle. I hope LL can make SL scale to the next level soon.

As to your second point, if you make land cheaper aren't you just going to get more sims, malls, clubs, and stores? As for tier costs, for non-American residents--the US dollar (that they pay tier in) is at historic lows. It would seem to me that SL would be cheaper now for non-US residents than it has ever been.



The ban on gambling is based on US law. As long as LL is a US company, they are subject to that law. Setting up a special area that non-American gamblers could access would still put them in violation of US anti-internet gambling laws.



I hope LL would be willing to. There are legitimate uses for bots, but none that require more than one or two on a parcel. I hope they are not reluctant to do this for fear of reducing their concurrency numbers.



Excellent idea. LL says they are working on it. I'm glad you said "harder to game", as many people seem to think at any solution that can be gamed isn't worth implementing. That's not the case--reducing the ability to game the traffic system is a worthwhile goal. I'm concerned that traffic reform is going to end up in a "perfect is the enemy of the good" situation.



That assumes that prices of mainland are not where LL wants them to be. For a long time, they maintained a policy of trying to make average mainland price come out at 6L$/m2 to 8L$/m2.



Why is a RP sim more in the public interest than a mall? Or a "FREE MONEY" sim? I understand where you are coming from, but I suspect that if LL starts making such subjective decisions that it will not end well.

I think we need more a beautification project on the Main Grid, including adding more trees, completing the unfinished roads and more public buildings.

Hell, you can pay residents to finish the roads and add more trees.