Week 4 - Post Two

As mentioned in my last post, this week will be dominantly focused on the economics and market of Second Life.  Some examples of purchasing were shown in the last posting, but for this one, I kind of wanted to get down into the nitty gritty of it all, and therefore, I will only be using text, and references.

Like any company, Linden Labs, Second Life's owner, makes quarterly financial reports.  As the funding for the game is largely provided through player transactions, these statements are available on their website.  Also, because of this, there have been articles about both the in game economy, as well as the effect that it has had on the real world economy.

In an article authored by Dean Takahashi from 2010, it indicates that the Second Life economy's size grew by 65% to $567 Million Dollars.  Linden Labs estimates, that with that increase, Second Life accounts for roughly 25% of the US virtual goods market.  The article goes further in depth, detailing the fact that Second Life users cashed out $55 million REAL dollars, with the top 25 players earning $12 million collectively.  With this, Second Life hired a Chief Financial Officer, by the name of Bob Komin.  Players logged roughly 113 million hours in Second Life for the 4th quarter of 2009.

Reading through some of the comments of an article titled "Second Life economy flat but steady", shows that many people believe that Second Life is on the way out as a virtual world.  While the economy was steady at the time of that article, it appears that it had suffered a roughly 11% decrease in user hours since the article I previously referenced.  While the user hours have no direct effect on the economy, it is quite possible that because people were playing less, they were also spending or selling less as well.

I hope to spend more time in the world this coming week, learning and possibly creating, but most of my emphasis has shifted to interaction, as it appears to be the best way to learn.

-DM


Works Cited

Cremorne, Lowell.  "Second Life Economy: Flat but Steady." The Metaverse Journal.
          November 10, 2010.  Web.  Accessed March 25, 2012.
          <http://www.metaversejournal.com/2010/11/10/second-life-economy-flat-but-steady/>.

Takahashi, Dean.  "Second Life's Economy Grows 65% to $567M." VentureBeat.com.
          VentureBeat, January 19, 2010.  Web.  Accessed March 24, 2012.
          <http://venturebeat.com/2010/01/19/second-lifes-economy-grows-65-to-567m/>.