When first surveyed, some 30 minutes after the sale had finished, it appeared that some 322 private regions were added to the grid, leading to a net gain of some 311 regions.
However, a later survey revealed that in fact a staggering total 689 regions were added to the grid as a result of the sale and sims returned to use, leading to a net gain of some 508 private regions after accounting for losses.
Of the total number of sims added to the grid:
464 were open to public access, and so could be surveyed with:
343 being full regions
117 being homestead regions
4 being OpenSpace regions
225 remain closed to public access and have yet to be surveyed as to type
The 464 accessible regions were purchased by a total of 381 individual estates with 252 purchasers having no other holdings. Only five of those purchasing multiple regions brought more that 3.
The revised totals are liable to be the focus of further debate around the “new” and “used” land markets – and those seeking to offload sims to other users may well feel every harder done-by on seeing these revised figures. Those who have paid the set-up fee, and who that have to recoup that on top of the cost of tier might also be aggrieved by these results as well, particularly if the new sims coming into the grid as a result of this sale are used within the commercial / residential markets.
It will be interesting to see what the overall impact of the sale turns out to be in terms of LL’s thinking. 689 regions does make even more of a powerful case for the set-up fees to be reduced (if possible) to something reasonably sensible, as I ruminated on when reporting the original figures released by Tyche.
Of course, the precedent for lowering set-up fees has already been set. Leave us not forget the fee for a full region was once $1675, so on the surface at least it’s not unheard of for LL to adjust this figure in line with costs. As such, it is something the company may opt to do again, and it is certainly more palatable to them than lowering tier, as some are calling for within the community.
Tier is something that will have to be reviewed; the case for reductions being needed in the future is growing. but for now, given the outcome of last weekend’s sale and that it is a) it is easily reproducible as a promotion and b) will likely achieve the same level of success if repeated in a few months time should a boost in revenue be required, one rather suspects LL may well sit on their laurels for a while longer and not hurry into any moves as regards tier or set-up fees just yet.
Note: there is now further information available on the total number of sims leased as a result of the sale.
I had doubts that the weekend’s Land Sale would prove popular among independent users and smaller estate owners. Rather, I thought that if it had any appeal at all, it would be with the larger estates.
I was completely and utterly wrong on both counts.
As Tyche Shepherd reveals, during the offer period, some 322 private regions were leased. Overall, this resulted in a net growth in private regions of some 311 – around 300 more, Tyche estimates, than might otherwise have been the case.
The 322 regions added to the grid currently comprise:
152 full regions
43 Homesteads
127 currently closed to public access (could be either full or Homestead)
In terms of purchasers, in the 195 regions open to public access:
177 are owned by different purchasers, with no single individual buying more than 3 regions
111 of the new owners have no other active land holdings
Some purchases were made by larger estates, but again, none exceed 3 purchases during the period of the sale
So, what does this mean? Certainly, it is a braking (I wouldn’t go so far to say “reversal”) of the recent private region losses. Whether this remains so will only be seen in the release of figures over the weeks.
In terms of stemming LL’s revenue losses resulting from the fall-off in private regions, it tends to demonstrate that far from having to take “drastic” action as some have been demanding, LL actually need to do very little. Just imagine how many more sims might have been leased had the offer run for a week, or how well another such sale would be received if run, say, some time early in the New Year. Of course, whether such promotions have benefit beyond the balance sheet is quite another matter.
Certainly, the sale has generated a lot of debate around abolishing the set-up fee altogether. Some were actually making the call even before the sale was over, and the success of the sale would seem to support them. But abolishing set-up fees is not without risk; many have been reporting for a good while now that they are finding it increasingly difficult to “offload” sims due to the $100 transfer fee. Abolish the front-end set-up fee for new sims on a long-term basis, and this situation could get very much worse.
Perhaps the middle ground would be for LL to restructure (i.e. reduce) the front-end set-up fee while at the same time abolishing the sim transfer fee for “used” sims. Assuming contractual obligations with their co-location hosting company would allow this to happen, one might suggest that dropping set-up to the cost of tier might be a happy medium (so a full sim would cost $295 set-up + $295 tier, for example), alongside of transfer fees being dropped altogether.
When looking at the set-up fees, one has to say there does appear to be a gross imbalance, which suggests there might be some room for manoeuvre here. What is it about a full sim that makes the cost of setting it up some 2.5 times greater than the fee for setting-up a Homestead? At the end of the day, surely, both are more-or-less the same in terms of software, and both have to go through the same load, configuration and test processes prior to being released to the customer. As such, one would have thought that actual costs involved for both would be more-or-less comparable.
At the end of the day, however, what this sale has demonstrated (besides being very good for LL’s balance sheet) is that when given the right incentive, there is still a healthy market willing to invest in new sims. As such, it’s far to call the promotion a success. Nevertheless, whether it has itself been beneficial to the SL land market as a whole is another matter entirely. That is only likely to be known in another two or three months time via Tyche’s on-going grid surveys.
So here we are in October, and we have the news that the simulator software is undergoing some kind of “critical software upgrade” that is affecting all channels and could see a higher than usual number of restarts over the course of the next week. At least updates on this are being pushed out via Twitter and the Grid Status pages (rather than it being one or the other in a lot of instances of late).
As I’ve been away for the last few days sunning myself and enjoying Swiss hospitality, I’ve no idea as to whether LL have finally recommenced in-world announcements where they know that restarts, etc., are going to impact object rezzing, transactions and so on. If they haven’t, it’s really about time they did.
LL CEO Rod Humble
We also have Rodvik sharing a post as a follow-on from comments relating to the platform made earlier this year, and which is intended to “Update you on each area and share with you our plans for the remainder of the year”.
Certainly, there were some tidbits – but I couldn’t help reading some elements of the post with a sense of disappointment at what was left unsaid.
Let’s take the items Rodvik discusses in order:
Viewer Usability
The two modes (Basic and Advanced) to be merged “soon” allowing changes made to the Basic mode to be integrated into the Advanced mode. Precise details are scant, but Rodvik specifically mentions avatar and camera movement. Ergo, expect to see the Basic mode “click to move” and perhaps the “goto” movement options appearing in the Advanced mode.
One would hope, as well, that the HOW TO button finds its way into the Advanced mode – and has potentially been extended to cover other important functionality, a point I’ve touched on in the past.
How To: cue-card style help in Basic mode: soon to be seen in advanced? One hopes so
At SLCC 2011, Rodvik indicated that the Sidebar’s days were numbered – and it would probably be a better than even guess that this is what he is referring to when he states, “After these modes are merged and deployed, you can expect us to release an improved UI into the Viewer”. I’ve little doubt the improved UI will see other nips and tucks made – but anyone interpreting this as meaning the V2.x/3.x UI is “going away” or going to receive anything approaching a major revamp … is most likely going to be disappointed.
Mesh
This was the real eye-opener statement in the most negative sense. “Thankfully this massive feature got deployed on time”. Hardly the best opening line to describe what is supposedly one of the biggest changes to SL’s capabilities. Rather than championing a new and exciting medium, this reads almost as if Rodvik is saying, “Thank God that’s over!”
It is certainly an odd statement to make given LL went to some lengths to avoid being tied-down to any precise dates. Even the May “mesh roadmap” was so full of caveats and warnings one fully expected mesh to slip beyond the broad deadline of “the end of August” for full deployment.
Yet now it would appear that – as I’ve commented upon in the past where LL is concerned – dates were the driving factor in the deployment, not matters of usability. How else can one explain deploying a mesh upload dialogue which was, by LL’s ownadmission at the time, as much a cause for confusion as anything else when it comes to trying to optimise mesh for SL use?
Beyond this, there is the fact that we know from Charlar that mesh in SL is due at least one more “non trivial” update – possibly before the end of the year. Whither then, is the pointer towards this in Rodvik’s comments?
True, in the context of this post, he’s not directly talked about the future of mesh in the past, but that doesn’t mean he cannot give at least a hint that LL are striving to overcome shortfalls and issues. Even something like, “We are working on a series of updates to improve how mesh objects are uploaded to SL, and how you can better understand their resource impact, and we’ll be blogging about that soon,” would be better received than what amounts to something of a brush-off – especially for those suffering under LL’s refusal to respond to the likes of JIRA SH-2374.
Improved Service
This was more honest: improvements have been made, but more investment is needed and will be given. This is good news all around. Of greatest interest to me was the comment relating to revised policies. At SLCC 2011, Rodvik hinted that things could soon get particularly unpleasant for griefers in-world. At the time, I got the impression he wasn’t just talking about deploying tools estate owners could use to handle griefers directly. Are we about to see a revised ToS that also makes the consequences of anti-social behaviour in-world a lot clearer to all?
Better Customer Value
This came across as a very self-congratulatory pat on the back. Frankly, I’m not sure it is due. It is good to see LL moving to make Premium accounts more relevant and attractive – but much more needs to be done in this area before LL can really start to feel good about things. This is particularly true with regards to re-engaging with people like myself; those who were Premium members but who “downgraded” to free accounts.
Rodvik, stipends here don’t cut it – I don’t particularly care if I get “most” of my subscription back in stipends (assuming I pay annually, that is) – I’d still be spending $24 (incl VAT, thank you) a year to enjoy what I already have. Nor does anything else currently on offer present anything approaching a “must have” factor for me – and I’m not alone in this. You need to give more thought to making Premium attractive to your established user base.
Shiny New Things
This section offered perhaps the most interest. At SLCC 2011 (again), Rodvik made mention of the introduction of NPCs – Non-player characters with whom it would be possible to interact with to a degree, and which can be set to perform specific tasks.
While bots, etc., have been possible within SL, they’ve tended to rely on a mis-match of enabling technologies: external data servers in some cases, or heavy reliance on server-side scripting resources (such as with many breedables) that draw down the anger of those impacted by such entities.
NPCs: New opportunities
Second Life itself actually had the capabilities to manage artificial life at one time – specifically plants and animals. Whether or not this capability is being revamped and re-introduced into the platform or not is really beside the point (although if it is there and is robust enough, making use of it would seem to make sense).
What is important is the fact that a massive capability is going to be added to the platform that could have a huge range of potential applications in-world. NPCs alone – human, alien, animal – have a wide range of applications in the likes of role-play and so on. As Rodvik states in his post: imagine a town filled with NPCs going about their “business”, allowing for a certain degree of interaction and so on, generating enormous depth to any gameplay or role-play environment.
Nor does it end there – assuming it can be done robustly and intelligently – the opportunities for using such “artificial life” capabilities has implications well beyond those of gameplay, many of which fall into the realms of education and practical research. Self-navigating agents? The avenues for schools and educational institutions to engage in things like robotics are simply mind-boggling.
Native AI in SL: potential educational / research / modelling benefits beyond RPG
According to Rodvik, we can expect some of these new capabilities to commence testing in December of this year, although (wisely) no roll-out data has yet to be pinned to the wall. Given the impact and benefit such capabilities could bring to Second Life, I really hope that LL strive for two things:
Make sure the capability is properly developed and implemented – sorry, but at the end of the day, mesh came across as a half-arsed implementation to many, and I’d suggest further that it is a practical demonstration why (again) the push, test, polish, test, polish approach can actually do SL as much harm as it can potentially do good.
They openly engage with a wide range of potential “beta testers” from within and without the SL community to ensure as wide as possible spread of potential use cases are identified and catered for and are the determining factors as to when the functionality is rolled out. Let’s not have the calendar again dictating what can and cannot get done in the “first release”, because many using SL already equate “first release” with, “That’s all LL are prepared to do”.
Last week an article appeared in New World Notes (NWN) which seemed intent on giving the impression that Second Life is in a state of terminal decline. The headline proclaimed: “Second Life Has Lost Over 650 Sims & $1 Million in Yearly Revenue in 2011; This is Why SL Can’t Survive as a Niche”, followed by a comment that, “The only future for Second Life is several millions of users, or none at all”.
Provocative reading perhaps; but how reasonable is it to make such assertions?
Well, first and foremost, I don’t dispute the figures in terms of region losses or potential revenue drop. They’ve been taken from Tyche Shepherd’s excellent Grid Surveys, which week-by-week look at the overall status of the grid in terms of regions, private and mainland. Rather, I tend to find the conclusions the author draws from Tyche’s figures to be somewhat questionable.
The Ebb and Flow of the Statistical Tide
Let’s try to put things in a little perspective, starting with two points in particular:
650 regions is around 2.6% of the total land mass
Linden Lab has an inward flow of revenue of some $75 million a year. As such, $1 million amounts to a 1.3% drop in that revenue. All things considered (economic climate, etc.), that’s not an horrendous drop.
Now let’s take a look back at private regions in SL over the last three years (a not unreasonable time-frame in business terms).
2009:
Jan-May SL suffered a loss of 1095 private estates during the first 5 months (from 22406 to 21311); no doubt fuelled in part by the OpenSpace fiasco
June-December: SL grew to 24033 private estates, an increase of 1627 regions over the start-of-year
In 2010:
SL grew by 6% overall in terms of regions
44% of this growth lay in private regions, representing an overall growth of 3% for private regions
In 2011:
Jan-Aug: 2.6% loss of private estates
A potential 3.9% loss by year-end.
In other words, in 2009, private regions on the Grid grew by some 7.26% over the start-of-year figure, despite an initial loss of some 4.88%. In 2010 it grew by a further 3% in private regions.
So while a current 2.6% drop is cause for some concern – it’s not yet drastic. Even if the shrinkage continues through to the year-end (as seems likely, given Tyche’s latest figures), and yields a potential 3.9% drop in private regions, the situation still would not be terminal.
Recession does Nasty Things
There is another factor to consider here. Right now, we’re in the midst of a prolonged global economic downturn. The longer it goes on, the deeper it bites into people’s disposable income. A prudent observer of the current decline in private regions in SL would consider it possible – likely, even – that the recession is responsible for at least some of the shrinkage we are currently seeing. One sees little sign of this in the NWN article.
But downturns don’t last forever (or if this one does, we’ll all have a lot more to worry about than Second Life). Therefore (and while past performance may not always be indicative of future growth), it is no unreasonable to suggest that once the economy does start to improve, people will again have more disposable income they can put towards Second Life, and this is likely to result in an improved demand for land as a result and at least slow – if not reverse – the current trend in private region losses.
Alternatives
Nor do Linden Lab need to convert anywhere near 400,000 users to Premium membership in order to recoup falling land tier income (even should this be necessary), as the NWN article also dramatically suggests.
Right now, Linden Lab generates some 20% of its income – $15 million – through non-land related activities. As such, it only needs to increase that $15 million revenue by some 10% to help offset the losses experienced to date – a not impossible figure.
There have already been a couple of small moves in this direction; we’ve seen the introduction of upload fees charged for mesh imports and a push to generate more Premium memberships. While the former might not have a significant impact in the scheme of things, the same is not necessarily true of the latter. Were Linden Lab to offer a Premium membership package that gave clear and significant benefits to those already engaged in Second Life (rather than just new users, as seems to be the case with the current offering), then the potential uptake could be significant – and relatively rapid.
Beyond this is the fact that Linden Lab doesn’t necessarily have to look at Second Life to recoup “lost” revenue. The company is shortly to launch new products into the marketplace. While details have yet to be released, it is unlikely Linden Lab will do so without the means to leverage them into revenue.
True, the results may not be immediate (depending on how these new products are to be monetized and how they are received by the world at large). However, that the company is launching new products means that it will be less dependent solely on Second Life for revenue. An optimist might even speculate that as a result, Linden Lab might have a greater degree of freedom to better restructure / improve the Second Life platform.
Nor should these products be classified (/dismissed?) as some form of “SL Light”, again as New World Notes suggested.* To quote Rod Humble himself in reference to this idea: “I never said a lite version. I said and I mean new products which are in the area of shared creative spaces. or social creative tools or user-created virtual worlds/places if you prefer”.
Where is Everybody?
Truth be told, there is one figure that gives continued cause for concern for many within Second Life – and it is not region counts; it’s user concurrency. This has been in a steady state of decline for the last three years. In her end-of-year summary in 2010, Tyche Shepherd estimated that SL’s average concurrency levels equated to just 1.57 avatars per region. That’s an awful lot of empty space.
Now to be fair, the New World Notes article I refer to at the top of this piece does indicate that Linden Lab needs to do more to get people involved in Second Life – even if it does over-egg things by putting the figure in the “millions”. And keeping on the side of fairness, Linden Lab have themselves indicated that they are working on the means to get people directly involved in in-world activities (i.e. content creation, engaging in the economy as consumers, etc.) a lot sooner than is currently the case. However, one has to admit that it would be nice to see some practical outworking of these ideas before the year’s end. Even a gentle increase in user concurrency that can be sustained for more than a few months would be good news for just about everyone involved in SL.
Niche isn’t Bad
Finally, and in turning to the claim that SL cannot survive as a niche, one has to ask, “Why not?”. The fact is that Second Life has survived for some 10 years as niche product, and has managed to generate a tidy revenue stream for Linden Lab that has made them “Very profitable”, to use Rod Humble’s words, in the process. Get the flow of people into SL right and the mechanisms of engagement in place, and there is no reason why it cannot continue to do so and enjoy practical growth.
This is not to say that things won’t have to change in time; the reality is that Second Life and Linden Lab will be facing challenges in the coming years that may yet force significant changes to aspects of how things are run (such as, ironically, land tier). However, these needn’t necessarily be negative – although they will need to be planned for and carefully executed.
And what is so bad about being niche anyway? Many a company and product have enjoyed long and fiscally healthy times being precisely that.
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*Hamlet has pointed out that his article drew the distinction between any new products and SL; as such, I’ve amended this piece and apologise for any upset caused.
“I own three sims and have a Group of over six thousand plus people and…Customer Service won’t talk to me. So…I mean maybe y’all don’t have that experience or maybe y’all have 20,000…but how does a guy who’s never been to one of these conferences and is new get through when there is nowhere to go and Customer Services is … c’mon guys, it’s abysmal.
“I pay more for my Second Life than I do for my BMW – and they bring a car to my house, take my car away … they call me every day and tell me, ‘This is the problem’. I don’t get a call back [from Customer Support] for three weeks. I get nothing. I paid three hundred bucks just to come here to say that.”
The above comments were aired towards the end of the Social Life and Communities presentation at SLCC 2011, and were reflective of a growing frustration from sim owners and others at the lack of service from LL’s Customer Support.
This is not a new issue; Customer Support has been a thorn in Linden Lab’s side for a fair while. And not just Linden Lab, as anyone – Basic or Premium member – who has tried to raise a ticket and get a response knows only too well.
Such is the problem, that Rod Humble has, rightly, targeted Customer Support and Customer Services as something that needs to be overhauled. The problem seems to be the time its taking to see – or even read about – anything tangible that is being done, coupled with the fact that at times Linden Lab see it purely as a “usability” issue (the suggestion being that if people are given the right tools, the problem will evaporate).The comments passed by the frustrated sim owner above was met with more-or-less this pigeon-holing of his problems, which were seen in terms purely of griefing.
While it is true that many issues around sim ownership, etc., can most likely be eased through the deployment of improved tools from LL – this is only a small part of the problem, and the fact is that Customer Support really needs to be overhauled from the ground up, because it simply isn’t working.
In fairness, LL are probably working hard to get on top of things – at times, some improvement has been noted, even if it is unfortunately short-lived. But when one of Second Life’s oldest and most well-known content creation teams announces that they have disposed of 50% of the sims they run in Second Life, simply as a result of issues relating directly to Customer Support, then there can be no denying the issue is reaching a critical point.
Prim Perfect carries a report about Grendel’s Children, which has sold-off two out of the four sims it has been running for over four years and has been a star attraction within Second Life – not only for the quality of the products supplied by the team, but for the sheer magic of the sims themselves. Indeed, as the Prim Perfect article notes, such has been the fame of Grendel’s Children that even Philip Rosedale likened the success of the Grid itself to the success of Grendels when he said, “As goes Grendel’s, so goes the Grid”. Their reason for selling off the sims? Poor Customer Support.
I’ve been broadly positive about the change in approach and philosophy within Linden Lab when it comes to Second Life – and I still am. However, Grendel’s is a strong brand, it’s a known brand and one that has been making money in Second Life. As such, and while they are not planning on pulling out of Second Life entirely, divesting themselves of 50% of their land holdings simply because of ongoing issues around Customer Support is not a positive message to be hitting the airwaves where the Lab is concerned.
Controversy has recently been growing (yet again) around the so-called Justice League Unlimited within SL. This is a group of self-styled “law-enforcers” that has long been active in-world, supposedly protecting the innocent against dirty wrong-doers, with their avatars garbed in comic book superhero outfits.
Leaving aside their explicit violation of a certain comic book publisher’s IP rights – this group has long had a less than stellar reputation, and is not above overlooking inconveniences to their “duty” such as the Second Life Terms of Service. Evidence is now emerging that the JLU are (again / continuing to be) involved in RedZone-like data-gathering – and going a lot further in the process by attempting to put together dossiers on anyone in-world they consider a “threat”.
Avril Korman has written an excellent piece on the JLU’s activities, and it is a recommended read. For those that feel the same level of concern for the JLU’s activities as they did with RedZone, there is also an on-line petition aimed at Linden Lab to have the JLU’s activities properly scrutinised. You may also wish to consider adding your own e-signature.
Tyche Shepherd has issued a revision to her initial findings following last weekend’s land sale by the Lab.
Inara Pey: Living in a Modemworld 