observations of an insomniac

US$ spent is a fictional number, it has nothing to do with actual money. A hands B L$13k and B hands A L$13k back and the number goes up by $100 US.

With casinos that back-and-forth happened thousands of times a day with varying amounts, artificially inflating the US$ spent.

The disappearance of Ginko deposits and withdrawals probably affected the number in a significant way as well.

You can't base any observations of the economy solely on the US$ spent number because the number is meaningless.

The gambling hit is a one-off. One hopes the Ginko failure is too. One also hopes, so is the departure of all the would-be millionaires who signed on amid all the hype of easy riches in SL and are exiting (opportunists tend to be an impatient lot, so I think they are pretty much all gone by now). If so, we should be seeing slower but steady growth from now. And in fact, I've noticed the concurrency numbers are looking a bit better in the last week or so. I agree with many above posters: Stability and dependability of the grid is what will make or break SL and LL, not the presence or absence of gambling.

The ban on gambling has certainly affecting things short term. The unanswered question is this: What's going to happen with the money that is no longer gambled?

Without the benefit of research, I'm going to guess that the Second Life gamblers fall into two general categories. One category is comprised of people who had money to spend that they wanted to spend only on gambling. The second category of people is comprised of people with money to spend in Second Life that they would have spent on any fun thing they could find in Second Life.

I'm going to make another, perhaps unfounded, guess that the second group is larger than the first group. I don't see why dedicated gamblers would waste their time at a Mickey Mouse gambling operation like the typical in Second Life instead of going to a true web casino or a real casino or some other place that caters to gambling. The dedicated gambler, and this is just a guess, but I think the dedicated gambler would be doing business with a place that specializes in gambling.

That would leave a lot of people waiting for the next diversion to take their money, with no one filling that void yet. That means that the gambling ban doesn't necessarily have an impact on the long-term economic health of Second Life, regardless of how much money was transferred in the name of gambling. That means that the long-term health depends on how well the business side of Second Life is able to fill the void left by the gambling ban and take the money that Second Life residents are willing to burn anyway.

Hmmm, I wonder if gambling activity can really go underground? When every single L$ exchange is tracked by LL? They can spot patterns of activity related to gambling and check on the location. Slot machines there? Wham goes the Ban Hammer.

Hmmm, we'll have to set up the proverbial floating crap game, with alts... oh wait, you have to cash out some time, and them more patterns appear.

So yes, gambling is as dead as LL wants to make it. And we know how hard they work at legitimate bugs...

I think it's all so hopelessly complicated that the statistics are nigh unto uninterpretable: No matter how one tortures these data, they will not confess!

The US$ spent volume is surely gonna be down for a long time, I think, because (as Kitty points out), it was hugely inflated by pass-thru transactions in the gaming industry; the absence of those particular transactions have no effect at all on the economy. It's an open question whether the industry itself had much impact, but we'll never know one way or another because the statistics are all confounded with all manner of other systematic changes (like the recent flood of sim releases depressing the land market, almost perfectly overlapping the sales of casino land).

One thing I'm about 90% sure about: the Ginko bank collapse had nothing to do with the gambling ban, notwithstanding the prominence of that excuse in Ginko's swan-song announcement. Hindsight is always 20/20, but I now see that, once the bonds were issued in May, the bank had served its purpose and was doomed to extinction upon the first convenient excuse.

I think there *is* a problem with Premium memberships flat and simultaneous online users growing only very slowly--but those statistics have been more and more disappointing since long before the gambling ban. A period of "consolidation" may be healthy for the SL economy, but will require some patience.

Oh, and steel too....check out Corus in Wales, for example... I couldn't ignore the steelworks in Port Talbot "next door" when I lived in Swansea, they're very much stll "there"

Yup, and Ireland has some of the largest lead/zinc mines in the world.

the way it works is, when someone makes a claim, they need to prove their point. it is not up to me to prove SL will continue and prosper, it is up to you to prove it won't. remember, you are the one losing sleep over it and deluding about 'your third world economy' collpasing. i'm not the one trying to prove that SL is gonna fold now that gambling's been banned. give some facts and numbers and quotes from people in the economy who say they are pulling out (like Chunge, Nerd, etc) that WILL effect the economy, and then you might have a reason to run around screaming that the sky is falling. if i see them all selling off all their lands and not buying anymore, why then i might get concerned. until then, it's just unnecessary drama.

if you have nothing to gain/lose by the loss of gambling, why are you losing sleep over it? SL is not a 3rd world country, at least not that i know of, but instead it is a pretend place to role play... it's an RPG.

and what i am replying as i have seen NO evidence of such a trend occuring.

errrrrr........ do you own a mirror?

actually, i've made MORE sales since the ban. hmmmmmmmmmmm

Gambling's departure has impacted the volume of transactions in SL. But I think it is a (large) one-time hit, and that SL will continue and grow. And frankly, I think it is good that gambling is gone. Takes some of the pressure off of age verification and eliminates investigation by entities like the FBI for racketeering.

I would love to know what criteria LL uses to evaluate SL's success. I doubt that USD spent inworld are one of them. Certainly USD spending is not (directly) part of LL's current economic review on the website: http://secondlife.com/whatis/economy_stats.php And these stats probably represent what LL would like the world to use in evaluating SL's economic viability. Looking at this page, I suspect that they don't care how many USD get spent, they care about how much activity is going on concurrently (i.e. a lot of "eyes" on SL's screen). Of course, LL's corporate viability (as opposed to SL's) will be evaluted by a much more private set of statistics

Jamil, a quick note on your business plan:

The economys been dead long before gambling was banned dancers & teachers tips have been poor for the last 6 months.

I'll take a shot at that one.

Boss Linden reaches to his back pocket and feels his wallet. If it's fat, then SL is successful.

And that provides the context by which one can begin to evaluate the economic data provided by Linden Labs. It might be more useful to throw out the economic data and read tea leaves. Linden Labs's economic data is not really meant to be economic data; it's advertising.

Yeah, I agree with Nika, something is wrong with these numbers, unless there are some, uh, unconventional approaches being taken.

For one thing, I think the *sim* code will be open-sourced as soon as the Lindens can make it happen because I don't think it's at all strategic to LL anymore (same as hosting the d*mned things)--but I can see what a nightmare that must be. All the third-party code (open or otherwise) has to be identified, licenses scrutinized by attorneys, etc. And they have to figure out how to make very sure they're not compromising the security and integrity of the shared servers (the source for which I pray will never be opened, unless it's a hell of a lot more secure than I suspect), so they can lease interconnection without opening up the whole grid to DDoS attacks (among other threats). So, yeah, I too think the opensource sim is more than 6 months away, but not for lack of willingness.

But, if one were to launch one's own VR platform, it would seem obviously prudent to have the client be the SL viewer, and retrofit the server backend. Granted, there's lots of development to be done there, but... US$15M would take an awful lot of projected revenue just to cover cost-of-money.

So according to you a pessimist "MAY" see things negatively and is pleasantly surprised when there isnt a negative outcome, but an optimist "ALWAYS" sees the good and is "NEVER" prepared for the bad, so they are <insert bad word here> because they "NEVER" saw it coming.

Even your definition of an optimist is pessimistic (and self-serving of course)

For the record, here are the correct definitions of pessimist and optimist. You will find them to be quite accurate in the context in which i used them to describe you and I.

pes·si·mist /ˈpɛsəmɪst/ Pronunciation Key - Show Spelled Pronunciation[pes-uh-mist] Pronunciation Key - Show IPA Pronunciation
–noun
1. a person who anticipates the worst or is disposed to be gloomy.

2. Has a tendency to stress the negative or unfavorable or to take the gloomiest possible view.


op·ti·mist (ŏp'tə-mĭst) Pronunciation Key
n.
1. One who usually expects a favorable outcome.

2. A person disposed to take a favorable view of things.

An Optimist says the glass is half full, a Pessimist says the glass is half empty, and a Pragmatist asks "Who is going to wash the glass?"

it is easy to make the number look better, just log in two account and give money back and forth between them endlessly each time it counts the money as changing hands it gets added to the big pile

make that daily number in the trillions

Exactly.

My favorite RL example of this phenomenon is a little different, but instructive:

Years ago, surgery was a common solution for stomach ulcers - at US$5,000 a pop. Then, it finally turned out that ulcers were caused by a microbe for which there was an antibiotic, so each $5,000 surgery was replaced by a $500 course of antibiotics. That is a 90% drop in contribution to the official GDP per case of ulcers.

SL version: Casinos largely disappear, thereby preserving SL from prosecution and legal dissolution, and also removing their lag and other drawbacks, at the cost of a fairly sizable drop in L$ exchanges among "Residents." Question: Is that better or worse for SL than substituting antibiotics for expensive, painful, and obviously not risk-free operations was for RL?

Heh. Talk about a loaded question...

I don't think so. ID verification is coming soon.

*move*