Second Life GDP totals $500 million

Second Life websiteSecond Life’s economy has a GDP of around $500 million, CEO Ebbe Altberg told The Next Web.

According to Altberg, users cashed out a total in excess of $60 million last year. One user has sold around 300,000 virtual dresses at roughly $4 each.

Second Life GDP (in millions of US dollars).

Second Life GDP (in millions of US dollars).

By comparison, in 2009, Second Life reported a total GDP of $567 million and gross resident earnings of $55 million.

In addition, the service currently has 900,000 active monthly users, a drop of 18 percent from its peak of 1.1 active monthly users in the spring of 2010. Second Life stopped publishing most economic data in the fall of that year.

Second Life active monthly logins. (Image courtesy GridSurvey.com.)

Second Life active monthly logins. (Image courtesy GridSurvey.com.)

However, Second Life has continued to make available the concurrent login numbers, and GridSurvey.com has been collecting this data for the past six years.

Average daily concurrency. (Image courtesy GridSurvey.com.)

Average daily concurrency. (Image courtesy GridSurvey.com.)

The data shows a slight but steady decline in concurrency since its peak in early 2010, totalling a drop of about 20 percent — almost exactly matching the decline in monthly users cited by Altberg.

Click here for full article and audio recording of interview with Altberg.

 

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Maria Korolov

Maria Korolov is editor and publisher of Hypergrid Business. She has been a journalist for more than twenty years and has worked for the Chicago Tribune, Reuters, and Computerworld and has reported from over a dozen countries, including Russia and China.

  • Does OpenSim even have a GDP?

    • I’m sure it does, but I have no way of calculating it.

      If I could, I would:

      * Add up how much grids are paying hosting companies or data centers
      * Add up how much residents pay for land and currency transactions
      * Add up how much users spend on online marketplaces. Well, one online marketplace – Kitely.
      * Add up how much users spend in-world

      However, despite all my begging and pleading, so far I’ve been unable to get even one of these numbers.

      I wouldn’t even need to get it from every single provider, just the big ones, and a representative number of the smaller ones. (I would definitely need all the big ones though, since they’d have a huge impact on the total.)

      Obviously, if we could get these numbers, it would be good marketing for OpenSim. After all, user counts and land area keeps hitting records highs, so the GDP is probably growing as well.

      It would also be useful for individual grids and providers to know how much, on average, grids are spending per region on hosting, and how much the average active user spends in-world, so you could tell how you’re doing compared to your peers.

      • I think you will be hard pressed to get any sensible figures out of the OpenSim grids as it will show how much they struggle (financially).

        It is interesting that if you keep it every simple ($500 mill – 1 mill active users), each active SL user contributes $500 per year to their GDP.

      • Rene

        SL active user base is estimates at 500,000 9even though LL says it is over a million). All of the OpenSim grids and commercial variants amount to slightly over 1% of SL’s active user base, so you can get a rough sense of the scale of activity. Also, SL itself is tiny compared to other virtual world styled game systems like WoW (10 million active user base). In no way would OpenSim scale up to those levels, but then that’s an unfair comparison in that the goal of OpenSim experience is not about monetization but instead it is about an unfettered virtual and community lifestyle.
        What is more important to garner is whether the myriad of grid operators (commercial or otherwise) are making enough to at least cover their costs of operations because unless they have deep pockets, running at a loss is not a long term viable strategy.

  • Talla Adam

    I’m surprised you didn’t take the opportunity to mention that the Second Life grid has fallen below 25,000 regions for first time since June 2008. Total Regions now 24,985 and the over priced hosted regions down to 17888. That’s a loss of 712 regions (3.8%) this year. I guess the saving grace is the decline is slow but it is relentless and the Lab seems powerless to stop it.

    • I stopped keeping track because the news is so depressing. I actually like Second Life — it’s what got me into this this area to begin with — and I still have hopes that they’ll join the metaverse some day. After all, AOL eventually connected to the Internet.

      • Talla Adam

        Oh, I’m still very much there in Second Life too and I manage to pay the Earth for two regions because I have a strong commitment to my supporting role players there but I have an equal commitment now to my Opensim grid, Farworldz. But, seriously, I don’t ever expect Linden Lab to open up to the metaverse. Heck, the merchants and land barons wouldn’t let them!

    • One of the reasons is probably the prices. SL ended to select rich users able to afford the ludicrous prices. So that these users can stay here. But new users will consider twice before entering, and check for other places with more reasonable prices.

    • The willingness of the overall market to pay for / or participate in such services mandates a surplus in economy and/or time. The majority of the world’s population struggle to meet their real life ends meet, get fed, clothed, educated and have a roof over their head. So the chances of these venturing into a virtual existence is slim to none.

      Over the lifetime of SecondLife the western middle-classes have been eroded, unemployments rates have spiked in many of these countries, salaries have been under pressure as more and more services and production have been offshored. Compound that with a shift to mobile devices as the preferred method of connecting to the internet, where in the new and growing economies in Asia and Eastern Europe people don’t buy PCs as the mobile device satisfies their requirements and is affordable. The only PC manufacturer that sees a YOY growth is Apple, and it has been that way for a few years now.

      In addition SecondLife has moved from being a frontier type environment with relatively little moderation and regulation, to a highly politically correct regulated shopping experience (mainly). This does of course have limited appeal, and in addition will compete with any other shopping experience – particularly in the mobile space.

    • James T. Reichert

      I think a large part of the problem is that the Second Life Marketplace is such a great experience for both buyers and sellers– and, for all that it offers to businesses, the SLM *only* charges a 5% to the sellers. If they were to bump that figure up, it would make more sense for sellers to move back to renting a sales forum in-world. In turn, the sim owners would have one of their primary income sources back.
      If Linden Labs were to change the SLM transaction fee to 15%, for example, I’d move a lot of my listings to in-world sales kiosks– to the benefit of the sim-owners, to whom I’d pay rent (or a lower transaction fee.)

      That transaction fee alone is an excellent in-world/out-sales mechanic.

      As a business owner, I’m really spooked by the sim die-off… I’d pay a bit more per transaction to have a healthy ecosystem across the board. Without healthy sims, my clients would have nowhere to enjoy our products.

      • Talla Adam

        I agree that the SL MP had a big impact on region owners that relied on store rentals and market traders to offset tier, especially those running role play games like myself. Many of us run RPG’s for the love of the game but LL tier being so high meant we needed a way to cover some of the costs and, in the early days, renting out store space and trading lots in a market where people landed did help with that. Not any longer though! I have seen our market lose all it’s traders one by one over the years until none were left and all we had to fill the market were affiliate vendors which cover just a fraction of our costs. Now days, selling our own stuff and combat meters and players donations are all we have left. We had four sims at one time but now can’t even cover the cost of two and I know this is repeated across the whole role play community and other venues in Second Life so I have no hesitation in blaming Linden Lab who didn’t give a hoot for our problems when they decided there was more profit in pulling market sales away to their online mp.

        Don’t get me wrong though because I think Kitely MP serves the open Metaverse far better than SL MP serves the SL community. Kitely doesn’t pull traders away from the many small grids because merchants have shown little interest in spreading across so many anyway – they just don’t have a big enough market individually to attract them. Once Kitely were able to offer export perms all those small grids could help their residents get quality merchant content in addition to freebies by accepting exports. This works for the open Metaverse but, as you say James, if LL were to raise the transaction fees then it might draw merchants back to in-world trading. However, I think there would be such an outcry from merchants who wont like paying more that LL would be shy of doing it.

        The SL MP issue might be a big reason for the decline but there are other reasons and not least apathy. People know LL have little time for people’s complaints or their property rights and look more to the bottom line. What use to be a vibrant market has become stagnant. Merchants are still selling stuff and people are replacing prim’s with mesh but the writing is on the wall and the drop in regions and concurrency continues unabated.

  • Alex Ferraris

    What keeps SL afloat is because it has the content, many creators ,scripters and its all in one. Not spread out like opensim is. By that I mean people, communities and small parcel markets. And the biggest reason is because it is not 100% free. It created a value which attracts business it creates incentives.
    The bad part is that it overcharges but because it did what I explained above people pay.

  • with only 3 “bars” the GDP graphic is not very accurate. We all know that SL had its peak in 2008, and started to decline irregularly, after the open lands scandal end of 2008.
    As to one robe being sold 300000 times (in one year?) I am curious to know how it happened. The problem is that there are many shops in SL and probably thousands models of robes. That 300000 users gather to buy exactly the same requiers that there is a communication between them, like a common event, a common chat, a common place. Problem, in SL groups are limited to some thousands, and events to some dozens. So I wonder how a single user could reach 300000 others.

    • I’d love to ad more bars to the chart — I couldn’t find any GDP data for any of the other years! If anyone knows of any, please let me know, and I’ll update it.

      But, I, too, am curious about that dress. Maybe it’s a copy of the blue-and-gold dress? Or something Kardashian?

      • Wait a second… $4 is … 992 Lindens… So let’s look at dresses between L$800 and $1,200 in price…

        The best seller in the women’s dresses category in that price range isn’t even a dress, but a tank top collection:

        https://marketplace.secondlife.com/p/Blueberry-Miki-MaitreyaBellezaSlink-Fat-Pack/8017908

        All the following items are ball gowns. Where would you even wear those? In RL, I haven’t worn a ball gown ONCE.

        • There are lots of ballerinas in SL ;-))

        • Marketplace sale numbers only reflect web sales not in world store sales and some of the biggest stores in SL don’t even bother with marketplace.

      • LL stopped publishing financial performance data in 2010, and the $500 mill GDP quoted by Ebbe has not been backed by anything as far as I can find out. As far as I can remember they quoted $620 mill in the 2009-2010 timeframe. Given the retraction in land area and active users since, $500 million seems reasonable.

    • Theresa

      Nowhere in that article does it say that it was a single model of dress, nor that the sales took place in a year.

  • Theresa

    Nowhere in that article does it say that the sales were all one single dress, nor that all the sales took place in a year.