SL’s slow loss of sims affect on LL’s bottom line


as of yesterday, Second Life has lost 2,660 private sims this calendar year which sounds like a big number in itself. but . . . Second Life still has over 21,000 private sims so maybe their loss isn’t that big of a deal

to put it into a perspective that might have more meaning, what does this loss of sims mean to the monthly bottom line for Linden Lab?

using Tyche Shepherd’s private sim statistics of 56.0% being full, 43.5% as homesteads, and 0.6% as openspaces means we can figure out the monthly revenue flow

i’m going to assume that the percentages have held relatively steady and compare what the monthly revenue for private sims was on January 1st of this year and what it was yesterday, December 2nd. i’m also assuming that full sims are $295 (not calculating grandfathered sims, ed discounts, etc), homesteads at $125, and openspaces at $75. the January revenue total calculated here will be higher than the actual one because of education/non-profit sims at $150 and grandfathered sims at $195. the December number will be closer to the actual number because there are less of both types of discounted sims now

January 1st monthly revenue: $5,249,175 ($62,990,100 yr)

December 2nd monthly revenue: $4,663,800 ($55,965,600 yr)

the monthly revenue has dropped by $585,375 ($7,024,500 yr). the actual drop is less than that but i’m not sure what that would be (10-20% less?)

when looking at these numbers, any drop in earnings is bad in corporate America but somehow 5.2 million per month versus 4.7 million doesn’t seem as bad as the loss of 2,660 sims. with new products in Linden Lab’s offerings as well as buying a company or two, Linden Lab may not be hurting that much from their private sim loss

sl loss

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written by Ener Hax

December 3rd, 2012 at 12:57 pm

posted in second life,virtual worlds

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6 comments to 'SL’s slow loss of sims affect on LL’s bottom line'

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  1. The real teller, to me, isn’t the revenue but the rate of loss itself. The year is not finished and SL has lost 2,660 private regions. Out of a total of 23,857 at the beginning of the year. That is a loss of 11.15%. I say we call it a loss of 12% by the end of the year.

    And that IS a hefty loss to a business.

    Which justifies their recent ventures. They see the loss as ongoing. Eventually, there will have to be a major downsizing, perhaps even shutdown. But they have a good cash flow now, so they are using it to invest in other ventures.

    Its a good idea for SL, too, if Linden Lab believes that SL is a long term project. If Linden Lab accepts that they will always have a loyal base of users, SL can last for a very long time, though not as big as it is now. Having many revenue streams would help to offset the costs of running a smaller, restructured SL.

    I think the next two years will see some major changes in Second Life.

    Sarge Misfit

    3 Dec 12 at 4:58 pm

  2. LL may be loosing money as more sims disappear but they are not the only losers. Has anyone noticed how many yellow for-rent plots are on the Linden grid these days? Well, all of that is empty property owned by Land Barons who must be feeling the loss too. Given that over a third of the grid is rental property (20 top estates owned by Land Barons) it is not likely sustainable even in the short term. One wonders how much the Barons can afford to loose if the downturn continues. Economic forecasts for the real world are not good either and virtual worlds are a luxury for the most part – perhaps not in terms of education but must be if considering it in gaming terms. Education at least has seen the light and shifted to Opensim.


    4 Dec 12 at 11:48 am

  3. As a very small scale “land baron” I can confirm that there is still way too much land in Second Life compared to the demand. My rental units are running a vacancy factor of between 50 – 75%. The Mainland and the estates I visit look to be about half yellow these days.

    I believe there is still untapped potential in virtual worlds, though. Second Life itself continues to improve (slowly), with new features and functions.

    These platforms are wonderful vehicles of expression, imagination, and creation. The more complete and the more integrated the tools of creation are, the more they will attract the creators who want to use them.

    Lindal Kidd

    4 Dec 12 at 2:44 pm

  4. hats off to you Lindal for being able to run at those occupancy rates. my price per prim was too low and i needed 80-85% to break even =(

    i think SL has lots of potential and unfortunately, it is up to land owners like you to get the word out. LL does not do much in the way of actively marketing SL, imo

    Ener Hax

    4 Dec 12 at 3:29 pm

  5. Well 2660 less regions (most of them private ones) also means 2660+ less customers for landscaping items, houses, off sim items, sim surrounds and so on. All that would be bought with L$, which in the end would land in LLs pockets. So I would think your bottom line is not really the bottom line.

    Daniel Regenbogen

    11 Dec 12 at 2:04 am

  6. very good point Daniel – you are correct in that it means some large number of estate owners (someone may have dropped more than one sim so it’s not a one-to-one relationship)

    for those that let go of their only sim or of their entire estates (like me dropping 19 sims in a three month period), that does meana loss of people that were willing to spend big money inSL

    and something you bring up too is that for some people who maybe rented on those sims, losing their home and thinking of starting over might be enough to make them quit completely

    thanks for that insight Daniel, interesting chain reaction there

    Ener Hax

    11 Dec 12 at 7:20 am

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