Second Life transactions, second half 2007
by Tateru Nino 
Dec 30th 2007 at 10:00PM
Filed under: Economy, Opinion, Second Life
The chart above represents the user-to-user transactions in Second Life (in US Dollars) per day, over almost the whole second half of 2007. The day the gambling ban was enacted is marked with the red line.
From the data we have, it appears that proceeds of the gambling culture that existed prior to that ban did not significantly flow on into the broader Second Life economy, but tended to circulate within itself and via the LindEX currency exchange.
On the whole, the economy shows signs of a slow but steady upwards trend, offset by some noticeable dips that coincide with widespread grid problems.
Christmas Eve and the few days leading up to it saw a dip in cash transactions, which largely started to recover on Christmas day, but will doubtless take another dive as New Year comes down on the grid.
Interestingly, the economy - at least as represented by user-to-user transactions doesn't seem to have been impacted at all by a 15% decline in active-users-per-60-days in the same period. As we've seen, the fall in active users has been mostly offset by overall upward trends in user-hours (crappy grid months, notwithstanding, obviously - which also are represented in sudden downward falls in user-to-user transactions in the charts above).
Falls in overall user hours, however will generally be experienced by the market as dilution - reduced sales, fewer customers, and lower demands for services. Most of that however, only really becomes readily apparent after the fact - it takes time for weather to become climate, or sudden changes of focus among users to become identifiable, longer-term trends. The conditions prevailing in previous years were far too different to use as a basis for comparison for this data this year.
Reader Comments (Page 1 of 1)
Natascha Seiling said on 11:59PM 12-30-2007
I'm no economist but I wonder if keeping the L$ fixed to the US$ rather than a basket of currencies is such a wise idea? The deflation in the US$ lately means Aussies like me can buy 40% more L$ for our Aussie dollar in the last 12 months, but it also means that all our assets in SL have been loosing value.
Keeping reserves of L$ is kind of silly. It isn't real money but it sure can fall in value. LL must have taken a hit too just keeping L$ stable.
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Tateru Nino said on 12:18AM 12-31-2007
Well, as I understand it, there isn't a true reserve. We asked under what circumstances Supply Linden sold on the exchange. The answer was "Whenever there's demand but no supply".
Honestly, we were expecting a more complicated growth or budgetry formula than that. :)
I still don't understand the "it isn't real money" view, though. It's a currency that can be used to trade for goods and services. How much realer does it have to be?
Nacon said on 1:27AM 12-31-2007
Actually I do believe that Gambling Ban (not that I support it) did make a big impact with SL when it come to marketing ground. The chart may only represents the user-to-user transactions, but most of them are actually shopping transaction. With something cut by more than 35% of the market is quite a damage, but not clearly enough to wipe us out.... but close. It's like having more than 35% cut on your income for where you need to pay off rental fee and such.
While there was some fear of market crash, some designers/builders/scripters doesn't want to admit such loss effect to market ground transaction would have to force them to lower their prices. Not that they should... If we all do, then we would lose about 35% or more of Linden$ value.
Ideally for them to do is losing their land/rental spots than lowering their prices for where they could make monthly/weekly saving. Estate owners would have most effect with their pricing. Thus, Real Estate owners would need to drop about 1/3rd of their sims. In LL's Monthly Staistics Data for Land, Island growth rate had dropped from 55% to 36% since the ban.
"To save your Linden$ value, best to lose some land than lowering your prices" has been set into most people's mind. Estate owners didn't like that, Anshe Chung clearly didn't like that either due to her new rental term and fee rules change.
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Ghen said on 8:14AM 12-31-2007
Its too early in the morning for black on white graphs, can you make it light blue instead?
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Tateru Nino said on 8:20AM 12-31-2007
Actually, I was planning to plot it in blue - but I forgot about it along the way. I blame the heat this season!
Ghen said on 11:39AM 12-31-2007
LOL
Hiro Market said on 10:32AM 12-31-2007
I've only been subscribed to the Massively SL feed for about a month, but can we have more of these longer term graphs. The daily stats are interesting, but what I'd really like to see is a regular post of usage stats with graphs for the last week, month, quarter and six months.
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Green Armadillo said on 7:37PM 12-31-2007
This is me eyeballing the graph, since I don't have the underlying dataset, but it looks like the average daily transaction value for the pre-ban time period is somewhere around US $1.7 million per day (am I really reading that number correctly?), there was a brief transaction spike after the ban (one might guess this represents casino owners divesting themselves of their assets rather than re-purposing their property), and then the average settled down somewhere around 1.2 million (again, give or take). Is there actually a significant change in the MONTHLY average transactions (which would help to normalize for off days like holidays) since the initial spike settled down that shows an upward trend?
Regardless, and again this is based on eyeball numbers so I'd be curious to hear what the real results are, it looks like nearly a third of the business that was transacted on the exchange prior to the ban was gambling related.
I'm not surprised to see transactions hold relatively constant even with a drop in active users - it isn't your least active users that are collectively spending over a million dollars a day (again, this figure boggles my mind), it's your most active ones.
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Tateru Nino said on 7:42PM 12-31-2007
These aren't exchange transactions - which are exempt from the data-set. These are user-to-user transactions. Sales, purchases and gifts.