Is Linden Lab wasting its time on the existing Second Life population?
by Tateru Nino 
Dec 7th 2009 at 10:00AM
Filed under: Business models, Culture, Economy, Opinion, Second Life, Virtual worlds
Going over the Second Life metrics that are available to us, it seems clear that this virtual environment has reached one of its most significant growth plateaus, and one that it doesn't seem to be able to push past. User-to-user transactions, active users, weekly/monthly logins, all remain very flat.
All the while, more than 9,000 new user accounts are created on the service every day, though the retention rates appear to be extraordinarily low, making up only for what appears to be an almost negligible attrition in the medium- and long-term user-base.
That user-base, admittedly, appears to bring in the bulk of Linden Lab's revenue. While there's a large number of organizations and educational institutions using Second Life, their contribution to Linden Lab's overall revenue seems to be quite minor.
With growth pretty much stalled for two quarters or more, should Linden Lab even be paying attention to the existing users, who largely seem to exist as self-sufficient communities unfazed by the actions of the Lab, or should the Lab be bending its energies on courting and converting new users with little regard for the existing population?
Overall, the smart money for continued growth seems to be with a new-user focus, and the evidence suggests that this is essentially the plan that the Lab is following. Dealing with ad-farms, adult-content and traffic gaming aren't strategies that are focused on the midbie and oldbie population. Any benefits to that population are purely incidental. Policies (including the new house and land promotion) are targeted to improve experiences for new users, because catering to midbie and oldbie users just doesn't create growth.
The only way to substantively grow the economy and population of Second Life is to improve the orientation and retention of new users (or institute some sort of secret cloning program for midbies and oldbies).
Admittedly, once that is done, the transformative wave will need to follow those users as they in-turn become midbies and oldbies, otherwise there is simply no long-term gain. If you're planning a fish-dinner it doesn't do you any good to keep throwing the fish back after you've caught them.
Second Life, it seems, has reached the limit of its current user-experience and brand-identity. Linden Lab is in the throes of transforming that experience (and we really wish they'd pick a more appropriate and mass-market friendly brand-name, the name 'Second Life' doesn't really do anyone all that many favors). The question is how far the Lab can and will go, and whether it can follow through.
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Reader Comments (Page 1 of 3)
Crap Mariner said on 10:09AM 12-07-2009
But then, failure to cater to middle and old populations means less desire for those sectors to create content on the SL grid and more incenting to look at other girds or platforms.
Although based on the dismal retention rate, it's not like the Labbies have found a way to translate user-level content into permanent growth that isn't high-profile CSI/Gossipgirls/Hype-of-the-week sourced.
-ls/cm
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Toxic Menges said on 10:20AM 12-07-2009
How does the retention rate fare against Twitter? Much as I love Twitter, the drop off rate on the service is probably high as well, and if you take into account the relative simplicity of twitter compared to the Mt Everest like leaning curve of Second Life, then there may well be more to say about the attention span of users, rather than the first hour failure of newbies in SL.
That saying, the Lab sorely needs to deal with how it's new users fare in their first hour.
It's all very well having flashy machinima (we can all do a spray transition you know!), that shows all these people having a great time in SL - but unless you effectively handle the sharding of your load so users can see anything when they get online, let alone move, and then give them no real help to find their niche community... why would they stay?
I want SL to succeed, I want business to use it - it's a perfect platform for collaborative work - in a way that blows Google Wave out of the water.
The Lab needs to stop being scared of their best resource and their most important customer - their community.
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Tarvish said on 11:01AM 12-07-2009
Personally, I've hoping the Lab would isntitute a type of daily 'job' that would allow residents who cannot otherwise make any decent money in SL (either because those don't subscribe or don't want to buy lindens) to make some decent daily, or weekly cash that they could then use to help fuel the SL economy.
If new players realized they didn't have to struggle all the time to make L$, or come home from their jobs to login to their SL jobs to make L$, that might help retain some users and get more returning users as well.
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Nightbird Glineux said on 2:32AM 12-09-2009
Work? I've transferred up to L$10,000 (~US$46) to my account every month, not counting Premium Membership and Tier. But these days I don't spend much time or money in SL, maybe 1/10th the cash on shopping.
iggyono said on 11:02AM 12-07-2009
Tateru, you are right-on about the name--"Second Life" is about the worst name you'd want for a virtual world, only beaten out by "Loser in Basement" (trust an academic Rhetorician on this).
If you want retention rates for 18-22 year olds who encounter SL in a class, my personal experience shows that 2% of them stay for another semester or more as social users.
I'm more artsy-fartsy than statistical, but I've taught approximately 100 kids in their first or second years of college, these past 2.5 years. Two have remained in SL, irregularly.
Reasons that they give for leaving SL:
--They have a community at Facebook and IRL, and they don't feel the need to drive avatars
--They all have laptops, and for many SL runs poorly there
--The UI and inventory system, even changing clothing and appearance, remain non-intuitive
--They find SL "creepy" or lonely--though some who travel about with friends report having more fun
--SL's risque aesthetic (see "creepy" above) spooks them. They are young, beautiful, and sexually aware IRL. The notion of "cybersex" or even "cybersexy" equals "losers in basement" to them
--LL's promotions of SL on "The Office" and "CSI: New York" reinforced the negative perceptions of SL for the few who knew about it
--They consider SL something for 30-somethings (ie--old people). I am, of course, the ancient and crazy uncle with this bizarre hobby
Unstated reasons? SL was for a class.
Maybe LL can get more 30+ SLers, but I'm not confident they'll ever reach the Millennial market.
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Tateru Nino said on 11:14AM 12-07-2009
Maybe there's still hope for the Hundredth Monkey Effect?
If I was still in the 18-22 range, I'd probably be running around barefoot, staying out till all hours, and drinking vodka-cranberry in private bars with folk musicians -- at pretty much every available opportunity.
Age and advancing infirmity however keeps me in a chair more often than not these days, and being able to use a virtual environment to nearly instantly collaborate with interesting people from all over the world? That has a lot more appeal nowadays.
scott grant said on 5:08AM 1-07-2010
iggyono, very nicely and succinctly put. i have had over 200 students do a series of classes in SL, and as far as I am aware, basically none of them have staid in SL beyond the classes. From an educational perspective, this is not a problem for me in that my students enjoy and look forward to (mostly) the lessons we design for them, but once the lessons are over, they most definitely do not look to SL for their social networking.
Tetaru, as a parent with a 21 year old I fully concur that kids between 18-mid-20s (or even later these days) on the whole want to be 'out there' experiencing real life (parties and all), and then talking about it with their peers on sites where they can post text and pictorial records of the 'real' them (although we all know that what gets posted on social networking sites like Facebook is indeed also often a carefully crafted 'identity'). People in this age group haven't seen enough of RL to want to spend much time in a virtual world like SL. I have traveled extensively over my 5 decades of existence and lived overseas for many years. I still love to travel and see new people and places, but I also immensely enjoy experiencing new (and familiar) things/places/people in SL. I think it is because of my rich life experience that I enjoy SL so much.
breezer said on 11:03AM 12-07-2009
I think it was CNN or somewhere similar that I saw a segment on Second Life, back when it was relevant, or media companies were pretending it was (much in the same way they pretend Twitter is an even bigger deal than Facebook because they can advertise with it). The segment said while Second Life technically has a healthy population of accounts, the number of active accounts was estimated to be as small as 15,000 log ins per month.
This was years ago, so I've wondering what's happened since then and how SL hangs on...
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Tateru Nino said on 11:09AM 12-07-2009
From the charts ( http://dwellonit.taterunino.net/sl-statistical-charts-testing/ ) the number of active accounts logging in per month is hovering around one million. It's been pretty steady around that number for most of the year.
Maggie Darwin said on 11:18AM 12-07-2009
We may observe that, given current levels of customer service, creativity and software quality, Linden Research may have hit a plateau in audience level.
May I be forgiven for noting that phrasing your question as "is LL wasting its time on the market where it actually has demonstrated it can make money" might make the true answer even more obvious.
Current management seems focused on imaginary revenue from fantasy markets such as SLE, .gov and .edu (who they've been at particular pains to alienate in the person of Jokay), to the detriment of their actual already-profitable customers. (Describing them as "seemingly...unfazed by the actions of the Lab" seems to me to betray a writer who's spending more time and energy playing pundit than participating in-world....a common affliction of late.)
I'm sure when M's current ill-thought strategy falls through he has a nice pre-negotiated golden parachute awating.
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Tateru Nino said on 11:24AM 12-07-2009
Hah :) No, actually I have been having a terrible time battering my head against customer service the last few days. Even more so than many otherwise deficient customer service experiences I've had with the Lab over the last few years.
But again, we're inworld are we not? Despite the complaints, the gripes, the awareness campaigns and all of that, only a very small number of us actually depart. The attrition is minor. We grumble and squirm and then after a couple weeks carry on as if nothing had happened.
botgirlq said on 12:14PM 12-07-2009
I don't think LL is spending much time on the existing SL population. Recent initiatives such as the creation of the Enterprise version, the segregation of adult content to Zindra, elimination of volunteer mentors, end of no-cost freebie listings, website makeover, simplified client, etc. are all largely directed at potential newcomers.
And I think that makes good business sense, since no matter how much residents bitch and moan about things, very few are willing to pack up their inventory and move to an OpenSim grid. Oh wait. You CAN'T pack up your inventory because of DRM.
So, truth is, LL doesn't have to worry too much at the moment about their core users because they have too much invested in Second Life that they can't move offworld.
I also have a feeling that the very high immersion/presence factor makes SL have limited appeal. I'm posting on that dimension of the issue on my blog later today.
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SignpostMarv Martin said on 7:13PM 12-07-2009
Last I checked, the only things preventing you from backing up your inventory were:
1) Time (assets in your inventory are not held in a single monolithic file ready for easy download)
2) Bandwidth (oldbies have inventory counts pushing towards/over 6 digits)
3) Morals/TOS.
There's probably something in the TOS about exporting content created by others for archival, more likely for redistribution (backing up my inventory isn't a major issue for me, so I'll leave clarification on that subject to Tateru).
However, if there is anything intending to prevent you from archiving data/assets associated with your account (e.g. your inventory, whether the creator granted you the right to or not), there's nothing physically or technologically (e.g. no workarounds required like there are with nabbing DRM'd WMV content) preventing you from backing up your inventory.
Granted, there's a steep learning curve in order to do this yourself (learn how to work with libopenmv), but it's still in the realm of possibility.
Anda said on 12:28PM 12-07-2009
I suppose now might be a good time to weigh in on the whole new user retention thing.
I fit between the 18-22 age demographic and I'm a new user! or to be closer, i'm a new user who spent around an hour in the game before becoming hopelessly confused (I followed the orientation island stuff and got through it) but i felt that i needed my hand held a little longer than what was. Afterwards i was a little confused about what to do, coming from things like EVE Online and World of Warcraft. I understand Second Life shouldn't be compared with these, but i was a little overwhelmed at being thrust into the open world.
It seems theres a lot of users like me, who within the first hour mark, head for the close button and don't return until the time comes again.
I tried about two years ago, and have been on once or twice since and remained hopelessly confused.
Before trying out Second Life (I say "trying out" lightly, i don't feel like i've given it a proper chance), i understand it had taken a lot of flak. I'm a regular Massively reader and i do pay particular attention to the SL articles on this site because the whole concept interests me, but i never really gave it a good go. But it's taken a hit because, as mentioned above, it has this "loser in a basement" reputation, no help really from The Office or CSI: Miami or even newspaper articles, The British couple who divorced over something happening in SL etc etc. Whenever i've mentioned SL in a conversation with friends i'm typically met with the same resentment towards it. They feel the game is "dodgy", with regards to cybersex and similar activities, but it's something that SL has took significant damage for, which Linden Lab will have an extremely hard time recovering from.
Another thing is that i've not really heard good things about Second Life since i tried it out. Controversies over Land Ownership, Loss of Subscribers, Controversial changes in merging the Main and Teen grids, companies dropping their SL presence, there's hardly been a positive spin on SL, and if there has, there's been more negative than positive. (I do read other sites!)
I'd be willing to give Second Life another chance, but i'm unsure whether the new user experience has changed much, or rather, what i can do in SL. Whether i'll return or not remains to be seen, but i'll keep reading up until the time comes where i'll try again.
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Vooper said on 5:04AM 12-09-2009
Hi Anda,
Please contact me in SL next time you log in (SL name: Vooper Werribee) there are a bunch of people slowly building up some great sci fi Roleplaying content that as an EVE online players you might really love - but you'd have to be lucky to find it through the SL search function! You might also want to take a peek at this wepbage to get an idea of what is going on in SL regarding Sci Fi Roleplay http://splintered-rock.ning.com/
SL has a lot of people in it who have dabbled in MMORPGs but which for one reason or another found that they were not quite what they wanted and also found that SL has given them the opportunity to build something that is. So if you want to see what the next generation of MMORPGs might be like you'll probably find hints of that on SL.
And to address the Tateru's article (rather than shamelessly plug my own work :D), as a midbie content creator I don't really care what Linden Lab do, so long as they keep the grid up and running! They have already given me the tools to build and program content that is valuable to others - I don't really need anything else from them! If they could do anything else for me ... well, it would be to do somethign that attracts more new users to SL and improves the profile of the platform :)
Mimika Oh said on 12:34PM 12-07-2009
“Is Linden Lab wasting its time on the existing Second Life population?”
No.
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wizard.gynoid said on 12:46PM 12-07-2009
I seem to recall M Linden remarking recently that current "active" accounts is running around 250,000. Despite all of the various rhetorical comments flying around about this topic recently, that number sounds reasonable to me, taking into account the numbers of "concurrent" users that I regularly see as i log in. (And I've even suggested that New World News do an in-depth analysis of those numbers. If there are about 35,000 sims and 70,000 concurrent users online at a time, then our anecdotal observations of an average of two avies on a sim seems accurate.) The comments above about the perceptions of dis-affected younger users sounds spot-on to me. I think most people are intimidated at first login, because SL's UI experience is so different from what they are used to, or might be expecting. This is old news, but I will mention again that I would have left almost immediately except that I happened to meet some avies who took me under their wing and helped me to learn the ropes. I suspect a lot of first-time users aren't that lucky, and so they leave with a bad taste in their mouth. It takes some aptitude, decent hardware and persistence to become an "active" resident. Do we want a "dumbed-down" SL?
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Tateru Nino said on 12:50PM 12-07-2009
It depends on how you define 'active'. Number of accounts that logged in within the last 60 days is flat at 1.4 million. It's possible the number is much larger out to 90 days, or six months or 12 months. Without a definition, it's hard to tell. Whatever that number is, it doesn't seem to be one that's among the published statistical feeds.
maria said on 12:54PM 12-07-2009
One option is to make it easier for existing users to bring in their friends and colleagues, by setting up a Web front end (no building, no advanced tools) for quick meetings. I can think of two ways to do it right off - the Unity platform, and the 3Di platform.
Right now, to hold a meeting in Second Life, I send someone the SLURL -- and then they have to download and install a massive piece of software and learn how to use it. A Web plugin, while useless to existing users who want the full functionality of a robust standalone program, would be invaluable to people who just want to come for one event.
So they register, pick one of six default avatars, and they're in. (They can register and choose the avatar while the plugin loads in the background.)
Then they attend their meeting or their club or their conference, and decide that there's a use for Second Life after all. At this point, Second Life becomes more like Facebook. (Integration with Facebook groups and events would be a major plus, by the way, and possible with a Web interface.)
-- Maria Korolov
Editor, Hypergrid Business (http://www.hypergridbusiness.com)
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SignpostMarv Martin said on 7:20PM 12-07-2009
A 22.1mb file, by contemporary means (re: virtual world/environment clients with a fixed set of content/no user content creation), is nowhere near massive.