Running the Numbers on Second Life
There’s been discussion lately about Second Life and how its reported numbers seem to be off. Clay Shirky, on Valleywag, has been deconstructing the numbers claiming that the emperor wore no clothes.
The funny thing is that this was coinciding with some research I’ve been doing to better understand whether SecondLife is a flash in the pan of whether it holds real meat. Since October, I’ve been tabulating the numbers listed on their front page, once a week, on Mondays. From there, I ended up with the following spreadsheet:
|Date||Total Residents||Logged in last 60 days||US$ spent in last 24 hours||Lindex Activity last 24 hours|
But the data itself wasn’t that interesting when it came to raw form. So I started thinking about some of the things I could do with it. Calculating weekly growth rates was the first thing I looked into but, as more financial data became available, I also started looking at how US dollars to Linden dollars moved along. From there, I ended up with the following spreadsheet:
|Date||Total Residents||Logged in last 60 days||US$ spent in last 24
|Lindex Activity last 24
|Total Residents added
since last check
|Increase in 60 days
logins since last check
|Increase US$ spent in
last 24 hours
|Increase Lindex Activity
last 24 hours
|% of residents who logged in the last 60 days||$US spend by resident|
Some data became clearer as a result of this. Here are a few key findings:
- On average, the number of logins over a 60 day period seems to be about 35 to 40 percent of the total population reported
- The people who log in, however, seem to spend a fair amount of money ($50-60 a week) within the Second Life economy. This seems pretty impressive to me. Now, I’m now accounting for the fact that this is not a standard distribution (meaning that some people may not be spending a single dollar in the world) but it seems to point to large amounts of US dollars coming into the Linden economy.
- The amount of dollars spent seems to vary greatly from week to week with some week seeing a drop compared to the previous week but the averages seem to be going up.
- Except for a drop around the christmas season (I’m assuming because people had better things to do), it seems the average number of logins no a week by week basis is increasing (based on the 60 day average)
The data seems to support claims of growth relating to Second Life. But how far can it grow? To do that assessment, I decided to make a few assumptions
|Â||Total Residents||Last 60 days login|
|Lowest Growth Rate||2.55%||0.14%|
|Highest Growth Rate||9.67%||15.51%|
For this data, I decided to take an approach where I would have a conservative projection (based on the lowest week on week growth number), a liberal one (based on the highest week on week growth number), and a most like estimate (based on an average of all the numbers I had). I then baselined against the most recent reporting period. From there, I now had three scenarios for population growth and 60 day logins. I started estimating it out over the next few months:
|Â||Population Growth Rate Projections||Â||60 day Logins Growth Projection|
So, it looks that, under the most conservative growth rate, we will see 3.5 million users registered and over 600,000 using the service by the end of April 2007. Under a liberal interpretation of the data, those numbers would shift to 9.6 million and just under 7 million. However, in the most likely case, it is probable that there will be 7.2 million users registered with 1.6 million logging in over the previous sixty days. Not too shabby. For the sake of planning, I would advise my readers to go with the most conservative estimate because my data set is still relatively small. Even then, this type of growth mirrors some of the growth patterns we’ve seen in the early days of the commercial web and seem to support the contention that LindenLab is going to be a very strong player in the future.