During the “gold rush days”, content creators and land owners — and then LL itself — all of a sudden exploited this market as never before. The advantage of exponential growth was an infinite supply of newbies. And all of them had a few L$ to spend (L$1000 in the early days, later just L$500, but all of them got L$50 weekly if they logged in during that week). That meant you could push anything to them — the same dress could be sold over and over again, months after months after months, as newbies came in, bought it, and then left, never to return. In those days, “herding newbies” by driving them and their easy L$ to one’s shop/venue was a major drive for the economy. Becoming an established business overnight was easy. Just imagine: since those days, we have been having 10,000 user registrations every day, but back then, they would come in with L$1000 or so to spend. That meant ten million L$ that would be spent, every day, split among all content creators — there weren’t so many back then, but still, there was plenty for all. They couldn’t produce enough content to please all those masses of newbies — the demand was huge, way way higher than the capacity of production.
Nobody was really worried that none of those newbies actually remained in SL. That was not a problem. They just came in, spent their L$, and never returned. Content creators became richer and richer and bought more and more land. The economy was growing at an incredible pace, and the beauty of it was that you didn’t even have to be a talented creator. Since during those days gambling and banking was still allowed, you can imagine the economical paradise that SL was…
Well, the irony is that we could get all that back. LL would just have to give the newbies L$1000 when they start 🙂 We still get over 300,000 new registrations every month — almost none of which remain at the end of the month — and that would mean that content creators would get richer every month by over a million dollars just by selling to newbies. But of course it would also mean inflation… or wouldn’t it?
Instead, of course, content creators have to aggressively compete for the few active residents who are still willing to buy content from them. By doing so, they have increased the quality of their products to levels never seen before, defying all limits of SL’s technology, and lowering their prices to as little as possible. Content was never so cheap and so good in SL as nowadays. And since the market continues to be fiercely aggressive, over time, more and more lower-end SL businesses close, and the competition level is raised another notch as the remaining content creators try to establish their hold over the customers of a former business. It’s tough and it’s hard, but, as Philip said on the SLCC keynote speech, a lot of the top content creators are really making money out of it.
What seems to be completely out of the picture are the newbies.
Once they were the focus of interest. Pleasing newbies was actually important, because they had free L$ to spend. During those crazy years of explosive growth, newbies were pampered and treated like Gods. It would make sense, since the ability to please them would mean their money would be spent on you and not on your competitors. Even though the vast majority wouldn’t remain in SL after a few weeks, it would be irrelevant — their money would already have changed hands.
Newbies without money are not so interesting. There are a lot of altruistic organisations like NCI who patiently teach newbies everything they can, but it’s really pointless: in my theory, we have reached the upper level of all possible people in the world with self-entertainment abilities and that have the possibility of connecting to Second Life. LL could offer Hermès handbags or Patek Philippe wristwatches for newbies to remain in SL for a year, and it wouldn’t make any difference.
All newbies that have self-entertainment abilities are already in Second Life. In a way, this is both a blessing and a curse. One one hand, it means that LL has already got all possible residents that will remain active. On the other hand, it also means that SL won’t grow much more — of course, there is always the odd person with self-entertainment abilities who has never heard about SL, or heard about it but never bought a sufficiently powerful computer to run it, but suddenly got one and gives it a try. These are the ones that join SL and make it grow very slightly, barely compensating for attrition. And there is not really that much attrition. The residents who were gone — and we all have lots and lots of missing SL friends from our lists — were the ones that really had no self-entertaining abilities, or just very low ones. They might have survived one year, some perhaps even two years (perhaps because they found a partner who entertained them for a while) — but then eventually got bored and left.
Of course, some self-entertainers also left SL, for other places where their innate abilities are better employed; I would like to be optimistic and believe that’s actually the major reason why some people remain in SL for 3 or 4 years and “suddenly” leave. I don’t think they’re back to watching TV — instead, they found other, more appealing things to do. Most were disappointed with something related to SL: loss of a partner or catastrophic failure of their SL business are the most common reasons, being angry at LL for some reason and being unforgiving is another one. Luckily for LL, these are not that frequent — we’re talking about thousands and thousands, but not hundreds of thousands — and are compensated by the odd newbie who all of a sudden discovers SL and finds out that this is the best (if not the only one!) outlet for their self-entertainment abilities.