Day: December 20, 2024

During the December 6th, 2024 Blogger Town Hall, the company’s co-owner and Executive Chair Brad Oberwager, revealed some outstanding facts concerning the platform: how much, cumulatively, Linden Lab has spent on building Second Life, how much has been paid out to creators, and how much money the company’s various owners have taken out of the company over the years.

At the time he revealed these figures, he did so under and embargo preventing them from being reported until such time as the number were officially released – which occurred on December 20th, 2024, with the publication of an article by VentureBeat’s always excellent Dean Takahashi – see: Linden Lab has spent $1.3B building Second Life and paid $1.1B to creators.

In summary, the figures Mr. Oberwager revealed were that:

• Linden Lab has spent in excess of $1.3 billion in building Second Life over 20 years, and
• $1.1 billion over the above, paid out to creators in that time, and
• $0.0 taken out of the company by shareholders / owners (presumably outside of buy-outs).

That is not a company that strips out profits. That is a company that puts its residents first. 1.3 billion dollars building Second Life. That is something I’m incredibly proud of, and I want the rest of the world to know.

– Brad Oberwager, December 6th Blogger Town Hall Zoom event

However, in talking numbers, the VentureBeat article goes much further, presenting some interesting comparisons between Second Life and Roblox (a platform which also published its own economic summary), are made. These include:

• A breakdown of pay-outs the two platforms made to their respective creator communities in 2023 (shown below).

• Despite increasing the costs of cashing-out over the last 8 years, Second Life still only takes some 10% in fees; with Roblox taking an estimated 27%.
• When taking the comparative size of the two platforms creator communities, it is estimated that a creator in Second Life is 100 times more likely to achieve $10,000 pa income (or greater) than a creator in Roblox.
• Given the relative sizes of the platforms’ creator pools  / active user counts, the Second Life figures on creator pay-outs are not that far removed from those for Roblox. This is something Philip Rosedale ruminated on (in a wider context) during the December 6th Zoom round table.

Second Life has generated about as much economic opportunity for its community as Roblox has. The population of Roblox, though, is about 50 to 100 times higher than Second Life; so one of the other things it suggests is the ability that a community needs to participate economically in its own activities is probably a lot higher with Roblox … People have made that much money [as those in Roblox], but they’ve done it in a much smaller community in Second Life,  and that’s probably what’s necessary to get the virtual world looking more like the real world. 

– Philip Rosedale, December 6th, 2024

And if the 14 people cashing out US $1 million (or more) comes as a surprise, keep in mind that the SL mesh body / fashion market is huge (and has even led to ventures involving physical world fashion designers); thus, the earning potential within this particular market segment is potentially equally high for gifted creators.

Further, the article notes that the Second Life economy continues to equate to some US $650 million a year, with $78 million paid out to creators in 2023 (up $10 million compared to 2017). And whilst the number of engaged users remains smaller than Roblox, individually, those users have on average been involved in Second Life for some 14 years. All of which offers food for thought – and I recommend reading the VentureBeat article in full.

Looking Ahead

When revealing the numbers on expenditure and total pay-outs to creators on December 6th, Mr. Oberwager noted that since starting his tenure as a co-owner of the Lab in 2020, he has placed the emphasis on spending almost entirely on investment within the platform and it services – and going into 2025, this will be changing.

I can tell you [that] over 20 years, investors have not taken money out of this company. Now the company is worth money [but] everything that we’re making, we’re putting back in.

What I am going to do, is I’m going to start changing where I’m putting that money; and I’m going to start to put that money into marketing dollars, because I want to bring folks into the world – a re-energising of that. It’s not going on be a $100 million dollar marketing campaign, but I think that [with] Second Life, there’s an imperative that it continues, and that it is extremely valuable for folks out there to learn about and come in. 

– Brad Oberwager, December 6th Blogger Town Hall Zoom event

The marketing effort will primarily be focused on attracting users to Second Life through the desktop (as I’ve previously noted – see here and here – the SL Mobile app is currently seen as more as supporting existing users rather than a tool with which to engage new users). Some of this spending actually started in December 2024, but it will become more involved from January 2025.

However, it’s not going to be a case of throwing money in the hope of generating an immediate return in terms of new users (although that would obviously be nice!), but rather a case of spend, review and extend / change, depending on how initiatives work. That said, one potential interesting aspect with the upcoming marketing drive is that it will be synced to the likes of product releases and “new things” LL plan to release in 2025, thus potentially generating more of an interest in those to whom the Lab is marketing in actually signing-up and giving SL a go.

Obviously, how successful these marketing initiatives are remains to be seen. And there will doubtless be more to report on them in the future. For more however, I’ll close with a further recommendation to read Dean’s article over at VentureBeat. Meanwhile, the numbers mentioned above make for interesting reading for the curious and interested; while the VentureBeat article makes for positive reading above Second Life as a whole as Linden Lab commences a new drive towards marketing and (hopefully) growth within the platform’s user base.

Related Links

• Linden Lab has spent $1.3B building Second Life and paid $1.1B to creators – VentureBeat, December 20th, 2024