If there was a monthly fee....................

Do you think the majority of people would play Second Life or would they just not bother after the trial.

I think most SL players would pay a monthly fee cause a lot of us do already.

It would be interesting to know what percentage of players are premium. Anyone know if Linden ever lets this cat out of the bag?

Well thats the thought that just struck me to be honest. I still play because of all we built up really and for the people involved in that. After sitting here all day and getting nothing done because of the godawful lag and over an hour to log in I just thought about the consequences of that.

If I was on trial now or if I was just paying a monthly fee with no ties in game I think I'd be gone to be quite honest.

many people start out with the lifetime account, which is a great intro to SL for cheap. a good portion of them tend to purchas premium accounts so they can own land for their ventures. So it seems those not willing in the beginning, soon find thier calling and become willing by the end.

but like mentioned above, many of us already pay monthly.

There are about 4000 land owners paying at least ten dollars a month.

There are currently around 26,000 active accounts.

So about 15%.

LF

If that's accurate, that's a really low percentage I think.

Those are loss leaders -- I don't think $10 one-time would cover the costs per-scubscriber over time. (26,000 accounts require more server power than 4,000 accounts would require. The difference in computing and manpower costs needed to support the additional 22,000 accounts would not be covered by one time $10 per account for those accounts in my opinion.)

It is the monthly subscribers and land holders that are paying the costs to operate Linden Labs. (Plus whatever capital there is to draw down, while it lasts).

Over time there has to be more playvalue to get that percentage up. Not everybody wants to build their own house, and there isn't a very powerful message to upgrade your account other than that you would be able to build your own house. (Sure, the stipend is better, but this doesn't seem to mean very much to a lot of people.)


Buster

If there were a monthly fee. The subjunctive mood is used to signify hypothetical situations or wishes.

I know, I know. Big retaliation because someone points out an error in someone's verb. But you don't know what it's like in my head! All the broken subjunctives drive me insane. Totally insane. And then here I am pouring my heart out using sentence fragments. That's something that no one would (subjunctive) want.

~Ulrika~

The way that I look at it is if you don't progress past the point of "golly gee, I can chat and change my avatar" and get to "let's see if i can make clothes/scripts/buildings/gadgets", then you're most likely not going to stick around.

If you stick around and create content, you're making a more compelling reason for OTHER people to join the game and see what people do... it's a win/win.

Furthermore, only 15% of the players own land... this has been a constant value, more or less, btw, since I've been able to guess. Yet the game pulled in 2.5 million in revenue in 2004, when the population was much lower (about half of what it was now), so I wouldn't be too worried about the numbers, honestly... 2.5 million in revenue with only 1500 monthly subscribers ain't bad

Also consider that each 10 dollar account adds up... so $260,000 just in lifetime fees

Sorry, I went on a armchair business tangent.

LF

$260,000 sounds like a lot, but it isn't. $2.5 million for 1500 subscribers is an average of $1,600 each, well over $100 per month. Average. That's a car payment for a lot of people -- it doesn't make sense. A fair amount of that has to be land auction, a source of revenue growth that has to deflect at some point.

A good analogy would be restaurant franchises. When restaurant chains depend on franchise fees instead of same-store sales growth, they inevitably run into trouble. Their trouble stems from a deflection in the rate of growth in the number of new restaurants. One day they are opening new stores every week, the next day they are in court seeking protection.

I'm not worried. But I don't think Linden can sit back and say, "ok, we're done. Lets watch it grow now". (Nor have they shown any signs of doing that!) They must have a plan to evolve things so that there isn't a crunch when the rate of growth in the number of new sims slows down. I think that means appealing beyond the technical creators who buy land so that they can manipulate prims. And I think this is what "metaverse" means -- it means that *everything* in RL should also appear in SL, to the extent that is possible. And beyond that, all sorts of things that nobody has thought of yet should also appear in the metaverse. (That's the "meta" part.)

Buster

I say the client revenue is a wash.

700 sims * 400/sim = 280,000 per month.

So, say that have 30 employees, each earning an averag of 60K (salary is very low at LL, i hear) that would be 150K per month in salary, so we have 130K left over.

700.. if they're running blades, that's about 700/14=50 blade centers?

Say 5K per blade center per month that's about 250 right there.

So, yeah, and then you have a lot of other expenses.

I think they're running at a burn rate of 100K plus per month right now.

They're goint to have to run another 11 bladecenters or so (166 more sims)

This is assuming 5K per 14 sims and 5600 in revenue ~= 600 profit per blade center per month.

At 7 sims per week this means it's going to take 23 more weeks before they hit profitability.

But who knows, things could accelerate this summer.

These numbers are based on a series of assumptions that are big assumptions...
I once tried to run the numbers, but got lost in all the variables

I'm probably missing some stuff, but off the top of my head:

Profit = Income - Expenses
income = tier fees + land sales + donations + miscellaneous business deals
expenses = salaries & employee benefits + servers + bandwidth + rights + advertising + mortgage / rent + utilities + taxes + travel expenses + office supplies + office & test computers + miscellaneous business deals

I can't see how you can estimate this accurately.

I am most likely not accurate.

I was merely trying to provide some starting points.

Thus is the nature of brainstorming.

Yeah, I realize... I'm just expanding on your starting point.

To me, my thought is that the profitability is in the businesses. LL grows the player base, and then eventually it grows large enough where storefronts, advertisers, game-developers, and the like will flood to SL, and LL will make their money primarily through those facets.

This is where the currency exchange comes into play. People with basic account can (and for all I know do) buy $L and most of that money ends up (directly or indirectly via rent etc) in the hands of people who pay for land. Who then sell it for real $ and pay tier with it. Supporting an official/legal currency trade was one of the wisest decisions LL ever made.

So while I don't know the exact numbers, I think basic accounts are not (complete) loss leaders for LL.

Yes, that's true .. I have a basic account, but spent several thousand l$ per week on rent.

It is indeed an average, which means that more than half of those 1500 people are paying more than $1600 a year for the privilege to play SL.

Even now, we probably have, what, 100 private islands? (edit: people have said at least 200... so let's go with 200) 195 times 200 times 12.. $468,000 a year in tier fees just from the island. And that's with a heavily discounted tier for owning an entire island. The mainland sims get "more bang for the buck", as it were.

LF

Lordfly is dead on about this. Another factor to keep in mind. The extra fee's land owners pay to advertise land. Such as sponsored links, welcome area signs, ect ect.

Having cheap ways to access the game is a good thing for future growth.

I wouldn't, well when I first started anyway, because I hate monthly fees. That being said, yes, I am only a basic ^_^ . But after playing SL for almost a year now, I would pay a fee, SL is definatly worth it

Another thing to consider is that I think the last data I saw on unique logins over the 5 weeks minus last week was around 5,000 users. So if there are 4,000 users paying at least $10/month, and there are around 5,000 active users, the ratio of premium to active basic accounts is not as low as 15%. A lot of basic users are not coming back after the first couple of weeks, and those that do are tending toward upgrading to premium accounts, I think. But I can't tell what the ratio really is, because there are also undoubtedly some number of people paying their monthly fee out of habit, but not logging in.

neko