OS sims: numbers and questions

I read an interview with Mark Kingdon (aka M Linden – has he mistaken Linden Lab for Britain’s MI6, or has he an innocent love of all things Bond?) with Wagner James Au (known in-world as Hamlet Au) on the OS sim situation that raised some interesting questions – and which lead me to do a little research and some math (which I’ve been able to verify as being reasonably correct thanks to Vint Falken’s excellent work). The interview also lead me to again question where Kingdon actually see the future of Second Life residing….

The relevant quote on the numbers front came early on in James’ piece, quote:

“While Kingdon won’t say what exact percent of the world is now comprised of Openspaces (“That’s not a number we publish”), he acknowledges it’s been a significant portion of SL’s geographic growth.”

Coupled with comments published elsewhere by James on the farago following the original hike announcement, I started thinking about sim numbers, percentages and suchlike.

At a recent Virtual Worlds conference in London, Kingdon and CFO John Zdanowski (or “Z” – another with a Bond fetishist?) intimated that there are around 32,000 sims deployed on the SL grid, of which we know some 5082 are Mainland, and supported figures put the number of Openspace sims at around 13,000.

By my reckoning that makes just under 42% of SL “OpenSpace”, which kind of makes Kingdon’s assertion that “, “this price adjustment affects only a portion of land in Second Life;” something of a stretch.

It also reveals something far more interesting of note:

• IF the hike went through at 66%, a loss of around 40% of these OpenSpace sims (5200) could be absorbed by LL without significant financial hardship
• Some 1300 servers would be saved out by LL, ready to be recycled back into the grid, the majority of their original cost already covered
• SL would suffer a land mass reduction of some 20% in the process (which might be viewed as a good trade-off by LL, given the amount of Mainland lying fallow).

Now, were we to take these figures a little further and adjust them ever so slightly, the trend remains favourable.

For example: if the tier hike is dropped to 30%, LL could still absorb around an 18% loss in used OS sims before feeling the pinch, and see around 600 servers saved out for a more manageable reduction in overall landmass (under 10% lost).

So… could this be the real art of LL’s game?

Will we see that tomorrow’s announcement will offer a “compromise” wherein LL will still up tiers, but at a “reduced” rate of no more than 30%? After all the furore over the original announcement, this could certainly be spun as a demonstration of LL’s “willingness” to “respond” to resident concerns – and yet get what they original set out to achieve: increased revenues from the surviving OS sims while cycling servers back for re-use and in part redressing land use towards the Mainland?

Others have already speculated that LL’s game had always been to bring in the tier hike in at a figure somewhat lower than the original 66%, and thanks to Vint’s research and my suggested figures above, it’s pretty evident that if this is indeed the game plan, it has some pretty positive results for LL all around.

There is something else within Kingdon’s comments during his chat with James that caused eyebrows to rise, quote:

“Somewhat related to that, he spoke to a point mentioned in my GigaOM article about the protest, which described the steady decline of Premium subscribers as a subject of great concern for the company. According to him, my inference there isn’t accurate: “That’s one of the only figures that’s going negative,” he said. “You can’t use that as an indicator of the overall health of the land market… Premium subscriptions are immaterial in our overall business.””

…TILT!!!!….”Premium subscriptions are immaterial in our overall business….”

Now…either Mr. Kingdon received a sharp whack to the back of the head when saying this (and as such should a) be forgiven for such an utterance, and b) needs to avoid people standing behind him when speaking in the future) – or he has not just let the cat out of the bag – he’s also given it a first class plane ticket to a destination of it’s own choosing.

As pointed out by the redoubtable Anne O’Toole, if this really is the case – that Premium Account holders are “immaterial”, then it could be extension be argued that Mainland usage is “immaterial in our overall business”, as one of the “perks” to Premium Accounts is access to Mainland parcels at reduced tier. Similarly, given the higher level of support promoted by LL for Premium Account holders, it could be said that technical support is immaterial to LL (actually, some would likely argue this is very much the case anyway, but you get the picture).

And if Premium account holders are “immaterial in our business”, where does that leave the vast number of “free” account holders…?

One could be generous to Kingdon (as Anne herself is) and point out this is an “innocent” (if massively unfortunate) slip of the tongue that simply needs to be redressed.

But “slips of the tongue” like this are more usually the result of the brain accidentally revealing the real thought processes, rather than just getting “words muddled”.

As such, and taken alongside the recent corporate annoucements I’ve previously mentioned, one can’t help but feel Mr. Kingdon has, in this “slip” again indicated he believes the “enterprise solutions” market is where he wishes to pitch the grid and SL, and the rest of us are little more than deadweight Linden Lab has to lug around.