News and Commentary: Second Life Revenue Reportedly Down By Half In Eight Years, Number of Sims Drops Below 24K

Some troubling news was posted on the SL Universe forums by Tyche Shepard, and passed on by Hamlet Au. In Tyche's private estate survey in January, she estimated that the revenue Linden Lab makes from Second Life sim tiers had dropped to just under three million US dollars a year, or 36 million a year. Hamlet Au when seeing this information calculated that as the Lab makes about 80% of it's money from Second Life through tier payments, the rest through premium accounts, Linden dollar purchases, and fees, their total income from the virtual world was about 50 million US dollars.

While that is a lot of money, consider that in 2009 Linden Lab's income was estimated to be about 100 million dollars. This represents a drop in income of fifty percent. The Lab is making only half now what they were eight years ago.

This drop in revenue can easily be seen as an explanation for certain actions Linden Lab has taken over the past year and a half, such as reducing the set-up fees for getting sims, lowering sim tiers for a time (in exchange for a fee), and increasing the prim capacity for sims. It's also a partial explanation for why Linden Lab is making a gamble with Sansar. They're not making the money they used to.

But according to Tyche's statistics from January 2, despite the moves Linden Lab has made, the overall slow decline of the number of sims in Second Life continued throughout 2016. In the first quarter of 2017, the total number of sims dropped below 24,000. Linden Lab may very well conclude Sansar is their sole chance for stopping their revenue slide. Hamlet's earlier observation that Sansar was starting to remind him more and more of the old Blue Mars virtual world, which after less than two years was pretty much on it's way out, is not exactly an encouraging sign.

While Sansar may not be "do or die" for Linden Lab as Hamlet also suggested, it's failure would be a huge blow as it would mean a significant investment in resources would get no return, and limit the Lab's options. In the short term, it might mean more tier reductions and more advantages for premium account members as Linden Lab takes more steps to try to stop the decline. In the long term if the decline continues, the Lab may decide to let some of it's members go in a "restructuring," reduce customer service, and other steps to reduce their overhead. And if that doesn't work, well, that may be best left unmentioned.

Sources: New World Notes, SL Universe, Second Life Grid Survey

Bixyl Shuftan

Update on Linden Lab's Blocksworld

Last month, New World Notes reported that Blocksworld, the building game bought by Linden Lab earlier this year, had become number three of the most popular  iPad apps, "For the first time … Second Life is not Linden Lab's sole hit product." A few days ago however, the reports were less rosy. It wasn't in the top 100 in either the "Overall" or "Games" categories, where the big bucks were made. Where it was showing up was in the "Family" selection of apps. A small source of revenue through parents making purchases, though not nearly the amount top apps like "Candy Crush" make.

Ener Hax's "Iliveisl" blog did a post with a graph showing one reason why many feel it's important to Second Life that Linden Lab gets another product bringing in money: declining tier revenues. From it's peak in 2011 when nearly 25,000 private sims were raking in over five million US dollars, the number has shrunk to less than 20,000 private sims with an income of less then four million US dollars. While the rate of decline seems to be slowing down, it's still a shrinking source of cash for Linden Lab.

Fortunately, there's still Linden Lab's indie game distribution site, Desura. And there are hopes that Oculus Rift could give Second Life a second wind. But it appears the earlier hopes about Blocksworld have been cut down to size.

Sources: New World Notes, Iliveisl 

Bixyl Shuftan

Linden Lab's Blocksworld Proving A Success

In Janurary, Linden Lab bought "Blocksworld," a game described as a mix of lego and Minecraft" designed for use on the iPad. At the time, it was one of a number of acquisitions by Linden Lab that appeared to some to be shots in the dark. Recently however, Blocksworld has been doing quite well.

According to New World Notes,  Rod Humble announced that Blocksworld had rose to become the third most popular of Apple's iPad application, "Woot, number 3 in the appstore for Blocksworld HD!" In the words of Hamlet Au, "For the first time in its 10 year+ history, Second Life is not Linden Lab's sole hit product." The game was being downloaded at a rate greater than "Candy Crush," which was making "an estimated $880,000 a day. If Blocksworld made just a fourth of that … it would be making more money than Second Life."

Among the responses Hamlet got was, "And how does this help the SL community exactly?" Hamlet reminded that Second Life's source of revenue, land tiers, has been in decline, and before there had been the danger of eventually "Second Life at ultimate risk of going up on the auction block in a fire sale - and who knows what would happen to it then." That it now had another source of revenue, perhaps it would be inclined to take chances in finally lowering it's land tiers. Hamlet was also confident that many of Blocksworld's fanbase would eventually be inclined to try Second Life, suggesting that Linden Lab revive Teen Second Life for young Blocksworld users.

It's good news for Linden Lab that it's revenue problems are starting to ease. Whether that means the fortunes will soon spread to Second Life, time will tell.

Image and article source: New World Notes

Bixyl Shuftan

Linden Lab Offering Half-Off on Premium Account Upgrades, With a Catch

Just after Linden Lab brought back the return of it's 50% off for educational and nonprofit sims, they're offering another discount as well. The Lab is offering a 50% reduction in the price for upgrading a free basic account to a paying Premium one. There are announcements on the Second Life website, and according to Daniel Voyager through emails.

However, there's a catch. First, the discount is only available "for a limited time." Also, it's limited to those choosing the quarterly billing plan. And the discount only takes place for the first quarter you signed up for. On your second quarter under premium, you would be charged $22.50 US dollars instead of $11.25.

Hamlet Au thought this was a sign of Linden Lab taking the initiative on attracting more revenue. Others felt differently. One posted in the official forums the discount was misleading. Hamlet Au's article had a few commentators who felt the Premium account itself was misleading in that it's benefits were few.

There is no word on how long the discount will last.

Sources: Daniel Voyager, New World Notes, Second Life forums, 

Bixyl Shuftan