It's the Stupid, Economy.

Get my home-made Halloween Treat Tray here at Ravenglass Rentals Office!

At one level, we're all "the stupid" about the economy because we don't have the facts. I'm not even sure the Lindens have the facts, as they may not track them, and can't track things like PayPal payments for rentals or credit card payments for X-Street content offsite. For all we know, like the private plots and kitchen gardens of the Soviet Union which provided one third of the food source for people and took up something like a fourth of arable land or more, such offsite payments could be a third or more of the SL-related economy that don't fit in the socialist model.

Gwyn has a HUGELY long post about the "hard facts" of the SL Economy. I indeed read it all the way through, and I think it boils down to saying, "But the economy, or at least that part of it I can see, is saturated with content producers and new people can't compete". My reply -- but there are at least six economies, all fighting each other, and frankly, new people keep coming and pushing out old people and competing successfully -- prefabs is one area where this is very visible.

Gwyn never answers her comments unless it pleases her and they are very tekkie -- but I can only reiterate the same indicators I have had all along for the economy, which I put in her post, which tells me it is doing better:

o traffic on infohubs, especially resident-made, and welcome areas
o traffic at major attractive venues
o attendance at live music and other events
o concurrency
o Lindex volume — higher than ever
o my rentals
o sales of my dumb little items, which are even more ridiculous than yours by far
o prefab prices!

However, if we zoom out to the entire industry, and take the jaded view of a former avid LL NDA-signer, Electric Sheep Company, we will come to think that "the entire Metaverse" is in trouble and is going to lose "80 percent of its ad campaigns" -- a prediction he makes based on WSJ reporting that experimental ad campaigns (which may or may not be VWs, but could more likely be on YouTube) will be cut. Maybe that's a good thing lol? A corrective in all the hype is a natural outcome to all the frenzy of 2007.

I always marvel that Sibley is able consistently to be so negative and pessimistic about his own industry, and yet continue to attract orders for his own services in virtual world management and creation. That alone should tell you it isn't the gloom-and-doom he imagines lol!

I don't know if we can take this to mean much, but Zee Linden is lately out stumping, countering those sour Australian press articles about "the world failing because some of our Australian projects failed", saying that despite the real-world recession, SL is fine.

Well, of course it would be, from his perspective, as he continues to sell islands, and he can control the economy and keep the currency rate stable -- and the land supply managed.

Lindens have still not moved to full sims on the mainland auctions yet, which means the spigot has been turned off now for about four or five months. They are selling large parcels for dollars, and hustling abandoned land very quickly. I just reported a piece of land that had a half-finished build and an extortionist sale price for a year on nit as abandoned, and it went to the auction within a few days, and I had to pay $16/m to get it (to add to the build in Iris where we have the Moth Temple Infohub).

In a reply to me, Gwyn says:

"the important thing is to realise that the consumer market — the number of residents willing to spend money to buy content/services in SL — is not growing significantly, and did not do so for at least one year and a half. But in that same amount of time, the landmass grew three times and the population doubled (and so did the number of simultaneously in-world residents)."

But again, look at the number of people who spend one dollar or more in world -- it is now 405,000, increased singificantly from 350,000 only a few months ago. The consumer spending class *is* growing, and growing fairly rapidly.

The land mass only grew because people got openspace sims, which are inflationary as to the reporting of land mass, as people get 65,536 m2 for just $250, with only 3745 prims. There are more spenders because there is more concurrency, but there will still be a significant number of bots and people who don't spend and don't stay long or come rarely.

I don't see how you can continue to claim an economy is "saturated" when the number of spenders and the number of concurrent log-ons go up, and new language groups come in and get into business!

Sibley tells us gloomily that only kids worlds will grow, but I think he has left out a niche that has been growing steadily, albeit never appreciated by developers like him, and even by the Lindens: small inworld business and their communities of consumers. The satisfaction that people get even from making something amateur-like and basically stupid (like my Halloween Treats Tray which you can buy for $25 at my office to help support the land preserve), not to mention the move from amateur to semi-professional or professional available from the SL platform -- well, it's indescribable. It keeps people coming back for hours and hours. Yes, it's a challenge to advertise and get noticed. Yet people do, and there are many quiet success stories. All this home-made stuff, outside the bounds of professional content makers in worlds where there is no UGC -- it's glorious, it's exhilarating, it's inspiring.

This facet of SL is what enables LL to keep thriving, and enables M Linden even to be invited as keynoter again to the Virtual Worlds meeting in LL, after a hiatus of Linden keynoters. It's what enables people to keep enjoying SL and still filling up blogs and websites and still keep making money. The ten languages that LL is now working on is tremendously important, as a lot of the growth is in the non-English world, and commerce without English can be very rocky, even with things like the free translator from Hank Ramos or various commercial translators.

Sibley also makes a prediction that SL will not take off as a meeting space. This is an interesting debate to have. Of course, it already IS a meeting space for people who haven't waited for Sibley's permission to make it so lol. Businesses talk a lot about the things they need for such a meeting space -- secure transmission of data, utter control over the parcel, etc. Perhaps these new undemocratic group tools that can ensure even voice moderation on a parcel will lure more of them in, even while I find it a turn-off and against the spirit of SL.

And sorry, this putative problem with downloading isn't a viable argument against the use of virtual worlds. Young kids download World of Warcraft and its numerous patches constantly -- not to mention the many songs, movies, casual games, etc. etc. they download constantly all day long. Downloading isn't the issue. As I have often said, the dirty little secret of flash worlds is that even if they don't have a download, and they "play in their browser," they constantly tell you they are LOADING...on Lively, even on IMVU, you see these meshes and underpinnings of the games constantly, especially if you don't have the most stellar system. If people can stand the LOADING...they can stand the rezzing of SL.

Sibley seems to argue that if there is an economic downturn in general, companies won't sponsor or hold conferences, and won't be willing even to experiment with cheaper alternatives like a virtual world. Critics of the concept of VWs as meeting spaces also sound off in comments, to the effect that webinars and various 2-D web solutions are easier to run.

I'm not too worried about whether companies flock out of SL just as they flocked in. What's more important is that stability, concurrency, volume of transactions grow *like a country*, and not important if "unique users" *grows like a game*. When there are sufficiently regular and sustained residents of a *country*, the companies will show up, too.

Reuben of Millions of Us remains more optimistic than Sibley, although sobered by the recession. He comes up with figures that there are 100-130 million unique registered; 75 percent are 8-24. A $1.5 billion industry, he says. He thinks we can say about virtual worlds, "this is beginning to turn the web into a place where you can actually meet face to face, closer to real life". He thinks there are "tail winds" behind the industry because there are global teams of designers you can assemble now at a low cost. Unlike Sibley and company, he believes that the cost of gas and travel in general will in fact drive people further to virtual worlds, he is confident about this, as a natural extention of the Internet with these major features: simulation of space; virtual currency; characters.

Comments

[Ann Otoole]

The SL Economy is like the ancient game of Go. If you do not comprehend why then your results are probably not so great while people that "get it" are doing well.

[Tara Yeats]

"Critics of the concept of VWs as meeting spaces also sound off in comments, to the effect that webinars and various 2-D web solutions are easier to run."

Those same critics, or their predecessors, said the same thing about the 2-D web solutions for meetings & conferences of 10-12 years ago... and there were the same range of technical difficulties then, just with different stuff. I'm confident they'll get to eat their words in due course!

[Yumi Murakami]

That article and your response to it were both very interesting, Prok - thanks very much for pointing them out.

Your point about the "rise to professional" is excellent for people who manage to do it. Unfortunately, the problem is, it isn't sustainable as a model for the economy in the long term. If the only attraction of the economy is in being eventually able to take US$ out of it, or (at least) avoid putting US$ into it, then it will fail to attract genuine paying customers (who willingly pay in US$) and collapse over time. It's the people who _buy_ their L$ who have to be the stars of SL, because without them, the entire economy breaks down. Even if every content creator left (as they tend to threaten to do over CopyBot), as long as the paying customers remained, new content creators would pop up to take advantage of the money available. But if all the customers go, the grid shuts back down to just those people who will work on creating content - and then pay their own tier. And, well, the whole economy is running on the assumption that there aren't many of those.

Another recent effect has been the loss of a lot of colour from SL. The "rise to professional" is now only available if what you enjoy doing is "art for the sake of art" - if you are creating things for the sake of doing something else, you are unlikely to succeed, because you will lose out to the people whose sole interest is creating. It was this fact that enabled the buying and selling of L$ in the first place, so it's a pretty obvious phenomenon. That has also combined with the removal of dwell (which led to the loss of a lot of social contexts on SL) to remove a lot of colour and versimilitude from SL. The only place I can think of that still retains that kind of feel is Caledon, which is a tribute to Desmond's management skills, but the rest of SL is slowly turning from a virtual world into a fancy dress party, and the loss of value - to EVERY piece of content in the world - is significant.

For example, I've heard of people believing that at most SL performances, most of the audience are either friends, or alts of the makers of the costumes/props used in the performance - who are there knowing that by idling and typing "/clap" a few times they can create a phoney significance for their products and quietly laugh into their sleeves all the way to the bank. The issue isn't that people believe that - people will believe any weird thing - the issue is that SL still hasn't evolved to the point where such a belief would be obviously nonsense (which would require abandoning the "pay for content, free events" model).

[Prokofy Neva]

Always the socialist, Yumi. I don't say that "the rise to professional" is THE sustainable market model. Nothing of the kind. I am *not* a creator fascist, "create or die". What I'm advocating -- and appreciating, as it is still very much present -- is CHOICE and FREEDOM. That the path to professionalism is THERE for those who chose it and have the talent; for the rest of us, they can make goofy home-made Halloween treats that someone might buy out of pity because they are so hilariously made out of prims -- and for many people, a sort of middling success where they make $50 US a month selling dresses to their friends and are delighted at the fun it involves.

There are clearly more people putting US into the economy than taking out -- look at the PMLF accounts -- hundreds, thousands at the most take anything out.

In fact, the people who BUY *are* the stars of the economy, but of course, you're there at the doors to greet them, cautioning them against trying their hand at business -- even resale -- or scarifying them with stories of ripoffs so that they are afraid to change a dollar.

There are many, many more places than Caledon that have a successful Second Life. You really need to get out more. Indeed, Ravenglass Rentals is one of them, and I'm only one of many small businesses of this type.

I go to live music performances and I would say most of the audience divides into newbies and regulars, and I can't say even as a regular that we are "friends" of the musicians as such. I don't see alts, I see mains, some very old, some very young.

[Yumi Murakami]

Prok, well, "having the talent" is a complete confounding variable. How do you judge if someone has talent? If your answer is "by seeing if they succeed or not" then you are assuming your own conclusion, making your assertion self-evident and meaningless. Or do you have an objective and independent way of judging talent, so that your statement can be verified?

And calling $50 a month "middling success" is also wrong - according to this month's Economic Statistics, such a user is in the top 20% of in-world earners (let alone the overall userbase).

I don't know where you get the idea that I or any other Mentor put people off running businesses. I don't, and neither does anyone else I know. And live music performances are an exception to the rule - they aren't SL performances, they are RL performances using SL as a conduit.

Caledon is successful as a business and I'm sure many other places are too, but that isn't what I was talking about. What I was talking about is that Caledon is one of the few places where the mechanics of a genuine virtual world remain. Does Ravenglass have a similar theme? Do people respect the appearance of an avatar there, and treat the av's SL identity as a persona? Or is it simply a vehicle for the RL person? I honestly didn't think that Ravenglass had any similar situation, but if it does, then good for you!

That's why Caledon adds value to every item it sells - if you buy a steampunk-themed outfit, it doesn't just change the appearance of your avatar, it can change your role in their society and how you are treated there (to some extent). That used to be the case on the grid as a whole, but that has broken down now, which has reduced the value of everyone's content.

[Desmond Shang]

I'm recusing myself from these comments in general so I don't come off sounding funny.

All I'll say is that I'm really not all that good at management, other than making sure I've got requisite tier reserves & suchlike. Poking with the estate management-stick typically backfires, in my experience, so I try not to do it unless cornered.

[ichabod Antfarm]

"Do people respect the appearance of an avatar there, and treat the av's SL identity as a persona? Or is it simply a vehicle for the RL person? I honestly didn't think that Ravenglass had any similar situation, but if it does, then good for you!"

Just because Ravenglass doesn't have a specific aesthetic doesn't mean it isn't as valid a virtual world community as any other. Besides, it does have a theme, a political one - respect a few basic common sense rules and enjoy the freedom to live your second life however you wish even if that second life is nothing but a fancy dress party.

The odd thing about what you are saying is that when I want to actually do "fancy dress", I visit Caledon in my best Jane Austen finery. It's wonderful and, when I am done, I put my tail and ears back on and go back to being the punky neko that I truly am in RL.

[Darien Caldwell]

I don't know Yumi, My store is packed every day with Roleplayers dressed in their roles, which vary from A to Z. In fact I probably have a very skewed view of SL, as I rarely if ever see anyone 'normal' just being 'them'.

I was taken aback recently when someone put forward the notion that if an avatar didn't have a RL picture in the 1st life slot, you should not have anything to do with them. A more foreign concept in SL i've not heard, but perhaps there are places in SL where the Second Life aspect has broken down and people are just being their ordinary selves. It's just apparently nowhere I've ever cared to go. :)

[Yumi Murakami]

Darien - I'm not sure if you mean BDSM roleplayers there, or roleplayers in general. BDSM is an exception, because it uses sex as the OOC motivation to enable a lot of roles that would otherwise be impossible - that's why, I think, it's popular on SL.

The problem with "the freedom to live your SL however you wish, even if it's just a fancy dress party" is that it isn't as simple as that. If one person in a group starts using their avatar as a conduit for the real person (rather than a character) then others will tend to too, because real people are by and large more interesting than RP characters, and there is more to be gained by interacting with them. So if you give people the freedom to do this, you take away the freedom for them to stay in-character. It's the same reason why many RP sims disable voice - because if people are free to use voice, then it won't be long before people are not free not to use it.

[Timothy Zapotocky]

This web page inspired Google to slap up a John McCain ad repeating the claim that Obama voted 94 times to raise taxes. (McCain himself has voted 477 times to raise taxes, or some number like that.) Neothe McCain nor Obama have spoken up on the issue of tier fees :-)

[Darien Caldwell]

Well, BDSM has nothing to do with it. People wear collars for all sorts of reasons. Sure I get plenty of BDSM roleplayers, but I also get Vampires, Demons, And even Native American RPers. Nekos, Furries, ANd some things which defy description or category.

I don't know that I agree that if someone starts being their RL self, everyone else will follow suit. The fact is, I am my RL self in SL, and always have been, I don't put on an act. It doesn't preclude me from engaging in RP and being altogether different in SL than in RL. It's simply another side of my real being. And I think thats the norm rather than the exception.

Voice breaks the RP, that much is certain. There's nothing worse than finding out your demon friend has a falsetto voice. :)

[Prokofy Neva]

$50 is middling success in SL terms -- 20 percent of the PMLF *is* middling success, Yumi, you are *such a tool*. It's a significant amount for RL, too, as it means a few day's groceries, a gas tank, something that isn't just a latte.

Ravenglass doesn't have any theme or aesthetic. Some of the communities have a rough theme like "island" or "Tibet" or "Europe" but all kinds of people come into them -- furries, dragons, BDSM, Gor, elves, norms, gangstas, etc. I truly get all kinds. Goreans come to vacation at Ravenglass, it's funny. Furries are welcome and perhaps are taking a break from the Forest or something. Some people make elaborate role play out of the tower in Ravenglass or other buildings on site, but most people have a kind of suburban or beach cabana existence in modern human clothing and shapes. I think Tiny Empires is doing something on some of the land preserve parcels because they have people on them raising the traffic with those tags -- I have no idea. I don't pay attention to people's profiles. Unless they are some sort of blatant sexualized ageplay thing which is actually very rare, as long as they pay and abide by the rules, they are in.

People put up all kinds of houses, modern, Gothic, castle, hobbit, treehouse, etc.

I don't really measure this, but I think the clientele is divided about fifty fifty between those RPing something specific like "furry" or "Gor" or "elf" and those who are just more idealized versions of themselves in tropical garb. Occasionally I get very high-realism types who make themselves old or fat because they are in RL, or they adopt those avatars to stand out.

As far as I'm concern, the mechanics of a virtual world are alive and well in Ravenglass simply because they are alive and well on the mainland. The mainland in fact thrives, despite all the urban legends. Even if I folded tomorrow, it would thrive in other people's rentals and communities. The human spirit is indomitable. It defeats all socialism and hardships thrown at it, even by these hippie Lindens, but the worst problem, like hell, isn't the Lindens, but other residents. What people do to each other in SL is the worst of all; that's why I try to maintain Ravenglass rules.

*OF COURSE* mentors run off business. There is a hard core of mentors who hate commerce, think SL should be free and creative blah blah, and drive people away from it. And you are one! Constantly spread fear and doom and panic and gloom about business in SL -- but fortunately most people simply walk around you lol.

I think you are spouting nonsense about Caledon content versus other content. What eternally amazes me is how people sell stuff. They come up with a design or an idea, even something modest, say, a folding screen, or a one-prim chair, or a book system, or a prefab, or a fountain, and they work it and sell it. They don't wait for your approval : )

[Yumi Murakami]

Darien, I didn't mean "being your RL self" so much in terms of subtle personality aspects, but in terms of broad personality and behaviour. In other words, what I mean is doing something in SL that you could not do in a chatroom. (And I mean _doing_ something, not _looking at_ something.) And in many ways, SL is failing to provide that.

Prok, simply stating that people are building houses isn't enough - are they KEEPING them? If people are constantly building new ones, that means people aren't staying.

And, I don't hate commerce, Prok. I've even helped people start businesses. I _do_ warn people that SL isn't easy, guaranteed money, but anyone would do that.

And, yes, I know that "people sell stuff". But what percentage of people?