Wagner James Au found some interesting Second Life data points buried in Linden Lab's economic statistics for the virtual world, where users find information from the financial state of the company to exchange rates for in-world currency.
In the numbers, the average price for land shares in Second Life dropped from 3.23 Linden dollars (L$) to 2.86 L$ per acre. But an even greater concern for Linden Lab is the ratio of user hours to premium subscribers. Paid subscribers (those who pay a monthly fee for the privilege of spending more money on land rights) have been on a steady decline since December 2007, while the total number of hours users spend in-world has been on a steady upswing over the same period.
Second Life Premium Subscriber Numbers:
Second Life Total User Hours:
It doesn't take Alan Greenspan to know that a larger user base spending more hours in-world without paying for the privilege isn't a trend Linden Lab wants to see, which might be why there has been no announcement on their blog of the latest figures. Linden Lab can always hope that some of those non-paying users convert to premium subscribers, but with the U.S. (Second Life's largest user base, with almost 37% of total accounts) economy sagging, spending money on a virtual life may take a back seat to the real one.
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Comments
This article is misleading it is not measure "per acre" it is measure "per square metre"
You should know that Linden Labs made the decision months ago to increase revenue through island sales and island tier payments ("rent"). So far that is still increasing. Do your homework!
I think there are a number of interesting plot points here.
1. if joblessness increases in the real world, does that mean virtual attention spans grow?
2. if user subscription rates increase in an economic downturn, will those users start to spend money when they return to the real economy?
3. does this for tell a huge upswing in future profits if these users convert?
if this is true, manpower's virtual world of work initiative might have a huge opportunity now as the users spending more time in SL might also be looking for work.
The trend has a lot to do with new "Landlord" rentals fad going on now where some few Premium account individuals are purchasing land and renting it to other non-Premium account residents. This way more people can go without ever becoming premium and still have land.
And recently Linden Lab lowered their island setup fee from 1600+ USD to just 1000 USD to spark a new wave of real estate purchases. That is the real story now and how that works out for the lab is more pertinent than user hours vs. premium memberships.
Alot of this has to do with all the problems Second Life has been having with there asset servers and equipment. The game has almost become un-usable to alot of people and as a result alot of the in world business owners have been loosing money by the handfulls for several months. Alot of people that have spent coutless thousands of real world dollars to be in Second Life have become fed up and have either cancelled there premium accounts or down graded to free accounts or just cash out and take the loss and never return. Linden Labs does not seem to relly care about any of this if you take the time to read the blogs in Second Life you will see the anger and frustration being spwed out by the residents and the people at Linden labs just ignoring them.
a HUGE percentage of land sales are now through private companies (not Linden Labs) who buy sims and sell/rent plots to new users, so the article above is not useful in determining how many new users are purchasing land. This entire article is misleading. What is truly happening is that Linden has shifted the responsibility of supporting new customer land purchases onto the independant land sellers by encouraging private island sales (and lowering the price).
@bambooser Revenue is revenue. And if the number of paid subscribers constantly decreases, I don't care where LL is focusing their efforts. You need growth to survive.
@Alicia I agree that probably plays into it. The premium subscription is on the high side to pay for the right to spend more money, and I think there are a lot of people who go with renting because of that.
@Jimbo I think you are probably the commenter I agree with the most. I refuse to pay for the constant outages and stability issues. It's just not worth it to own land, and I have several friends who sold their land because of it. It's not even as if the premium subscribers see more uptime than those of us who don't pay, so why would anyone bother to upgrade?
@Sara Where did I say that the numbers showed that new users aren't purchasing land? The land transactions reflect all sales on site, so that doesn't impact the number, as I understand it. Renting is probably an issue, but again, that's a problem for Linden, because they don't see money from land rentals. They need the paid subscriptions.
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