The Hard Facts About the Second Life® Economy

Consequences of the 100,000-user-economy

The first thing that you have to understand is that the number of 100,000 users is fixed, but its individuals aren’t. What this means is that, over time, some of those will leave SL, and new ones will come in. So if you’re shaking your head and saying that you know about a dozen people who have left SL and who would certainly be part of that group — and if your Friend’s list has a thousand people in them, each claiming that 12 residents they knew have left SL too — this would surely mean my assumptions are totally wrong.

In fact, I’m only talking about abstract numbers and not individuals. At any given time, the number remains fixed at 100,000, but people come and go. For each and every Premium Account user who is a content creator and writes a blog that leaves SL, another steps in their shoes. While this number has grown exponentially (my claim is that they were about thousand in 2004; ten thousand in late 2005/early 2006; and a hundred thousand by the beginning of 2007) it has stagnated, but it also doesn’t change over time. And why not?

My assumption is based on one premise: the current Third-World-type of economy that SL has only allows for 100,000 people to be active participants in it. This is a corollary of the assumptions, but it is the ultimate explanation why the economy can only grow marginally from now on, even if the number of new registrations continues to be at about 10,000 per day. In fact, the number of new users is pretty irrelevant for all purposes, except for LL’s press releases. The 100,000 are the movers & shakers in SL; the economy is defined by them, through them, and because of them.

There are also further consequences: under the current model, Second Life will not be able to attract more than those 100,000. LL can certainly innovate a lot of things, and change the model completely, so the assumptions might not hold any more. But currently, right now, this is what we have to work from.

The 100,000 are the most active evangelists of SL. This is one of the first consequences of those assumptions. You might have seen how M Linden has subtly pushed LL’s strategy to increase stability and, most importantly, make sure that the first hour in-world is a pleasant experience, in order to hopefully retain more happy residents and continue the growth in new registrations. All this is irrelevant. Stability will benefit mostly the 100,000 — since they’re the ones actually having high expectations about SL. So all complaints about the lack of stability, grid problems, griefer attacks, copyright violations, unethical behaviour in business, etc. will come from the 100,000. The remaining millions are completely out of the loop; they don’t know, don’t care, and will not change their attitudes. The 100,000, however, do care, and they will definitely complain as loud as possible until LL fixes everything that needs to be fixed — but they will also be the ones supporting LL most. This means that the likeliness of one of the 100,000 to actually leave SL is several orders of magnitude lower than from the “other group”.

Profiling this group would be quite interesting to do, from the point of view of anthropology and sociology, and I’m so very sorry not to be able to do it professionally and thoroughly. But I can give some hints. It’s quite a heterogeneous group. Many of them are creative; many have a good business sense; most are charismatic; most are over 35 and very likely over 40. But many of the borderliners are also included in this group — and they might even be a very high percentage of the total. After all, these are the ones for which SL is truly a “second life”, and their commitment to SL comes because there is no alternative for them. So it’s not an uniform group (I would even claim the contrary, but I have no data for that); it’s my feeling that it’s one of the most extremely mixed groups in SL. And interestingly enough, they have little in common (or they would have banded together and decide the fate of SL long ago 🙂 ) and even usually work against each other.

After all, these are your competitors — not the hordes of “tourists” (residents unwilling to participate in the economy) that will be here one day and leave the next.

Let’s see a few more consequences, and then I promise to give some hints on how I’ve come up with those numbers!

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