RL Recession Effecting SL Economy.

Similar here, I started my full perms sculptie biz last October. From month to month my sales have either remained at the same level or increased. I add new items and do a fair amount of customer requests for making new items for the store. The systemic issues with transactions and tp have the strongest effect and can last for days after the system has stabilized.

I think that in hard economic times, some people turn to cheap entertainment for escape.

Hi LillyBeth, i've not seen any decline this year and business has grown as predicted.

Ive been in business for 4 years now and have been able to predict and forecast my revenue pretty accurately for the last 2 years. Q3 this year exceeded forecast by 5% and overal this year I expect to exceed my annual forecast by a total of 15%.

This past week has been my second best week of the year so definitely no immediate decline due to the recent financial doom and gloom of RL.

I spent the summer building like a crazy fellow (as all you content creators should have been) in preparation for the usual boost in business that starts around this time of year and my new content is now out there and selling really well.

I had this conversation last night with 3 other friends who are all leaders in their chosen field of business and none of them have seen any noticable decline in business thus far, although we are all obviously concerned for the future.

Stats: http://spreadsheets.google.com/pub?key=pxbDc4B2FH94OkiJffGTwWg

No growth.

I tend to agree with folks who are saying that $L are basically just being spent differently. A quick glance at the economic stats through August.

+ Hours Used: Growing, but slower growth the last couple of months
+ Total Land: Growing, sharp rise last two months
+ $L Supply: Growing
+ User to User Transactions: Growing
+ # of Profitable Businesses: Stagnant

This last number is interesting. Seems to me that the numbers are shifting towards larger (more profitable) businesses. Looking at LLs stats for profitable biz, you can see that the number of biz making US$50 - $200 has declined since March while the number of biz making over US$5000 has grown significantly.

I made a chart to help me visualize this - columns of numbers don't make much sense to me http://spreadsheets.google.com/pub?key=pQpSE9h9mJwL0Bnb2yvmyAw

I also think that the recent addition of so many new private sims might be effecting other sales. I know I recently moved to an OpenSpace sim and the jump in monthly rent was significant. Didn't buy too many new Avs this month.

Personally, my business (flowers, landscaping, textures) has shown fairly steady growth over the last two years, especially in Jan and June of this year. My sales this month are down a bit (10%), but I didn't really add any new products this month and was not logged in as often. I am expecting continued growth, especially in the Winter months.

The only thing on that spreadsheet that i can see that has significantly declined is the number of premium accounts. Otherwise i dont see any evidence of a recession in SL...if anything SL is holding steady or growing slightly while the RL is in a downward spiral.

Exactly... Therefor many business will not grow and probably decline as people already bought what they want form them. Other business will grow when they release new wanted products.

Yeah.

If you compare dollars spent to hours used, the growth is actually significantly negative.

Actually Dollars spent per hour of online time is down over 35% since Jan 2007.

a safe bet?
maybe for normal trends in a normal market but it's not a normal market at the moment.. i don't think we have had it hit the fan like it has this month in say......ever..
they said it's worst ever..thats a bit more than saying normal trend lows for the month of September LOL
the fact is they were the only ones saying it while others were saying it was all going to be ok..
Government intervention has not been going on for decades in the market..
normal trends not in play here..
the market has been tumbling all year..even in the good months..
i think you will see a change from normal decades in the past..
the historical things going on are the changes happening and the types of companies folding..
most that were around all those decades..

Well BULLY for you!!!!

No need to be all smug about it! LOL (jk)

I think your one of the rare exceptions tho to be fair. I have really researched this and altho I havent done a grid wide survey I have looked into my own field, and others and the group Designers in Seclusion who have all kinds of various designers all said " everyone is feeling the same "

BUT this still kinda backs up my theory noobs are inclinded to be less creative than they were 2+ yrs ago.
ppl come in and pretty up their AV get married have kids (??) and buy a house...SL has turned into the Sims!!! LOL

heehee

I know 2 of your competitors pretty well and both of them have been hit by lower sales recently so maybe some industries like textures are worse affected than my industry of prefabs. This would also tie with your analogy of The Sims and people being less creative.

Something else that maybe affecting TRU's business is pricing. I buy allot of textures (About 40000 at my last count) and TRU are one of the most expensive stores out there. Don't get me wrong, your products are well priced and easily worth the money and I know how much effort goes into making textures. But allot of people are under cutting your prices nowadays and selling singles too. Ive been a TRU Customer since you opened but I have to admit that TRU is no longer top of the shopping list when I am looking for new textures. Prolly my 3rd choice nowadays for a whole variety of reasons.

As soon as I am done poseball hopping all the hot cartoon babes and am done enslaving the entire Peasant Population on here, I will show you creative NOObidity


hahaha

This is really interesting.

Thing is, it's just such a squirrely stat to consider: "more than 5000 USD"... I wonder just what that is.

You could have, say, 100 users in there at 5001 USD each: that's 500,100 USD.

Or you could have, say, 50 users at 20000 USD each: that's 1,000,000 USD.


The other thing about it, you've got people paying tier. Let's consider the case of a small land baron fallen on tough times: 5000 USD worth of $L coming in, 6000 USD of tier payments as he struggles. Net result, the guy making $L 200 a month would be beating him - but we just can't know it.

It's probably good that it's a squirrelly stat, though. Otherwise with a little detective work, you could figure out who some of the particular $L dollar figure people are. Wouldn't be hard with me, as all my SL income is through my estate these days, with known occupancy and published rate sheets.

Once upon a time there was this lookup thingy, and you could literally see who had what in $L balance, in comparison to each other. Amazing to even consider such a thing any more!

Yeah. I was going to make another break down of these stats by totaling the dollar amounts of each earnings range - but figured it would be too skewed since the numbers are not exact. Would be interesting to see how much total money is made between say $10 - $200 vs $1000 - $5000.




Ahh. yes this could very well be. Not exactly sure what PMLF is , even with the explanation on the stats page.

"PMLF (Positive Monthly Linden Flow) looks at the flow of Linden™ dollars into a unique user's account BEFORE Linden Lab Charges are applied to the account. These numbers EXCLUDE payments or receipts related to the sale or acquisition of land (since theoretically these represent investments and not business receipts). All numbers are rolled-up among avatar "alts" to the Unique Customer Level. Businesses that are operate Linden dollar exchanges are excluded. Note that some businesses accept payment outside the Linden Economy (e.g. via CC & Paypal) and those numbers are not included in these reports. "

Very interesting.. Guess that means folks are spending a lower percentage of their in-world time shopping?

Also, traffic bots don't spend money.

A hundred bots selling $5L to each other 24/7 can "fix" that

It's likely very skewed for the smaller amounts.

Every camper that doesn't spend everything earned by camping would seem to fit the definition of "business owner with positive L$ flow".

If 4 people contribute to buy a L$100k piece of land, one of them would seem to end up in the $200-$500 category.

It would make more sense to look at "positive US$ flow" rather than L$.

I've been having another look at this (as you know from my PM), and I've come to the conclusion that the LindeX Volume tells us nothing, other than L$ are moving in or out or both. It doesn't tell us which way they are moving. For instance, if everyone suddenly decided to cash out and quit SL, and new registrations stopped, the "volume" would be high because of the cashing out, but there would be no money coming in and no shopping being done. So I think the Volume of L$ movement is nothing to go by.

True. That leads to the obvious question how much of that 30+% decline is related to Bots?

We are told that Bots do not make up 30% of those on the grid, so it must be in the middle somewhere.

No I was using US dollars .. Lindens trading hands really doesn't show the health of the SL economy at all.


The true sign is How much Cashing In / Cashing Out people do.

Volume is not an indication of orders being placed, but rather of orders being filled.

If I buy L$50k as a market buy the volume goes up by L$50k (instant order fill), if I place a limit buy order it doesn't affect the volume until the order is actually filled.

A LindeX volume of L$80 million on a specific day means that L$80 million changed hands, which is both selling/buying.

It depends on how they're cashing out. Very few people actually do cash out with a market sell, most will just limit sell instead since the vast majority of buys are market buys rather than limit buys.

If hypothetically everyone started selling with noone buying then volume would plummet. The only volume would come from market sells against the L$30ish million of limit buys which would just be 1/3rd of a regular day's trading. You wouldn't even get the full L$30ish million because as soon as the currency traders wake up and figure out that everyone is market selling with noone market buying they'll cancel their outstanding limit buys and volume drops to 0 with everyone offering to sell and noone willing to buy.

If hypothetically everyone started selling with the normal amount of buying then volume would remain constant (it would likely drop a bit). Just because there's a mass selling doesn't mean there's a whole load of people interested in buying. Currency traders would still likely cancel their outstanding limit buys in this case since a volatile situation means they can't reliably sell their L$ buys with a profit (which would case volume to go down since you loose market sell volume).

With volume constant (buying is the same it's always been) and everyone desperate to cash out you'd just see the "Open Sells" numbers rise and the exchange rate worsen (from the perspective of sellers) since everyone would try to make the head of the queue and limit sell at a worse exchange rate than everyone else.

That's exactly my point. Volume doesn't tell us anything except that L$ are moving, but we don't know how much is going one way and how much is going the other way. So when it's suggested that the RL financial situation might be causing less money to be bought and spent in SL, the Volume figure doesn't give any indication one way or the other.

Volume isn't constant, and even if it were, there's still no way of knowing whether or not the bulk of it on any particular day or days is selling or buying L$. The volume isn't an indicator one way or the other, so it can't be said that, if the volume is the same, the buying is the same.

If everyone is selling and nobody is buying, the volume wouldn't plummet as you suggested. The volume would still represent flow in both directions. Your suggestion would only be correct if the same amount were sold. And don't forget that the volume isn't constant. So far this month, it's varied between 104 million and 69 million.

As a premium paying member, my spending declined because simply there isn't anything I see that I wanted other than a new gown here and there. I have more than enough clothes, my home is completely furnished. After my wedding, there isn't really anything else I need. As for "toys" such as hot air balloons, airship, boat and such I have those.

If I were to start spending again it would be buying a new home for my snow lot and furnishing that. My major expense is my tier on my properties.

So for some folks like me, they just may not need anything else.

Volume is the amount actually traded.

L$77,941,490 was traded yesterday at an average rate of L$266.78/$1. Whether you want to see that as "L$77,941,490 was sold for $292,156" or "$292,156 was spent to buy L$77,941,490" is exactly the same thing. It's the both selling and buying since it represents *filled* orders, not open orders.

When you trade L$ that involves selling and buying at the same time. Otherwise you merely have an "offer to trade" which is represented on the "Open Buys"/"Open Sells" pages.