Looking at the Second Life 2017 year-end Grid Survey report

La virevolte; Inara Pey, December 2017, on FlickrLa virevolteblog post

On December 31st, 2017, Tyche Shepherd issued her year-end summary on the general size and state of the Second Life main grid.

In terms of a percentage loss, 2017 saw private region losses return to the 2014/2015 levels, with a 4% decrease through the year, somewhat lower than seen in 2016. In all, 677 private regions of all classes were removed from the grid in 2017, compared to 992 in 2016. At the same time, the number of Mainland  / Linden held regions increased very slightly from 6,744 to 6,806 (up by 62), leaving an overall net loss of 605 regions across the grid as a whole.

Taking the year-on-year figures from 2010 onwards (that being the last year the grid exhibited a growth in the number of regions), we get the following breakdown for private regions:

2010 2011 2012 2013
24,483 23,857 20,994 19,273
Increase
%age
Loss %age
Loss
%age
Loss
%age
810 3% 626 2.56% 2863 12% 1719 8.2%
2014
2015 2016 2017
18,600 17,775 16,783 16,106
Loss
%age
Loss
%age
Loss
%age
Loss
%age
673 3.5% 825 4.4% 992 5.6% 677 4.0%

Working on the basis of Tyche’s Full Private Region surveys I have to hand, a breakdown of approximate recent monthly revenues from private regions over the most recent four-year period might be given as:

  • November 2013: US $3,857,000 (+/- US $52,000)
  • March 2016: US $3,385,000 ( +/- US $43,000)
  • December 2016: US $3,162,000 (+/- US $39,000)
  • December 2017: US$ 2,970,000 (+/- US $36,500)

This represents around a 23% drop in monthly tier revenues over a four-year period. Of course, there are other revenue routes associated with Second Life – notably Premium memberships (which the Lab has in the past indicated account for around 20% of revenues). More directly, the end of 2016 / start of 2017 saw the Lab generate an estimated US $80,000, which doubtless help offset the decline in tier revenues to some extent. So, taking these factors into consideration, I would suggest that overall, the Lab might still be generating around US $48-49 million in revenue, or roughly the same as my estimate from my 2016 end-of-year article.

In 2016 there was some speculation that any opening of Sansar might have an impact on SL’s landmass. In my 2016 piece, I expressed the opinion this would not be the case, noting:

Some have raised concerns over how much of an impact Sansar will have on SL’s landmass in 2017. I actually don’t think it will. While I anticipate the decline in land will continue (but hopefully at a slower rate than 2016), I simply don’t think Sansar will have any immediate impact on Second Life one way or the other. Not in its first year, at least.

Unsurprisingly, this has proven to be the case: region losses for the second half of 2017, following the opening of Sansar’s public Creator Beta, remained pretty much on a weekly par with the months prior to the Creator Beat opening. I expect this will continue to be the case through much – if not all – of 2018.

Private estate numbers downs and ups in 2017 – click for full size

For me, the question remains as to how the Lab might respond to the slow tier revenue decline. As unpalatable though it may be to some, the answer still isn’t any tier cut, for the same reasons I gave back in 2013.  Simply put, from the Lab’s perspective  – and contrary to popular misconceptions on the matter – what users might consider  a “reasonable” tier reduction could actually be more immediately damaging to LL’s bottom line revenue generation, and bring with it no actual guarantee it would be overcome through any sustained demand for private land.

A better way – again from the Lab’s perspective – to relieve any pressure causing by reductions in revenue would be to reduce the costs involved in running ad maintaining Second Life. Doing so may not yield direct benefits to users in terms of tier reductions – but given the Lab’s sensitivity to the subject, they could over time provide the means for the Lab to reduce the tier paid by users. In the meantime, reducing costs allows the Lab to better leverage revenue into bankable profits. This is true, as well, for the work to move Second Life to the cloud – although hopefully, as the Lab has indicated, this might also eventually result in new land products / more flexible pricing. We just perhaps shouldn’t anticipate this happening in the near future.

Might we see Horizons expanded or a re-run of the buy-down offer in 2018? Possibly; although if either were to be tried, I suspect were there to be a move towards one or the other, it would likely be more to s further run of the buy-down offer, rather than an expansion of Horizons. That said, I actually anticipate that 2018 will see a further drop in region numbers, albeit one hopefully / most likely slower as then year unfolds than that of 2017. I doubt there will be any significant reversal unless something happens to cause a sustained growth in the overall numbers of users actively engaged in Second Life.

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2 thoughts on “Looking at the Second Life 2017 year-end Grid Survey report

  1. Maybe the Lindens should expand projects like the Blake Sea. That place is very popular and land prices go through the roof. Residents there own rather small plots but have a huge public space that they can use. So the value that they get for their small plot is much better compared to isolated private estates.
    Regarding the private estates, I know many people that would love to own land, but just cannot affort it. 100 USD for a sim would be a reasonable price. I would get a complete sim immediately. Land is needed to create good content, which then is the reason for people to log in to SL. Also owning their own land is a reason for people to log in to SL. Imagine Youtube would charge people a certain amount each month to upload videos. It would have a tiny userbase and not a lot of interesting content. SL is like Youtube. It’s both user created content. SL even has a big advantage through it’s economy. That is where Lindens should tax it’s users. Small property tax, require Premium for all serious use of the platform and rather high sales tax.

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