Running the Numbers on Second Life

38 Comments

1. 1 Yoick - Hightechwire — January 9, 2007 at 12:28 am

   [IMG sl1.jpg] We’ve cov­ered the froth about Sec­ond Life’s num­bers before, but thanks to Tris­tan Louis, we now have more data to sift thro. [IMG sljan07.jpg] Tris­tan began track­ing the num­ber of users and finan­cial data (caveat — listed on the SL site, not inde­pen­dently ver­i­fied) from Octo­ber 2006 thro to Jan­u­ary this year. The out­come of this

2. 2Phasing Grace — January 8, 2007 at 1:21 pm

   across the many out­lets afforded to those with a voice and an ounce of blog *fame*. The con­ver­sa­tion is dif­fi­cult to fol­low and I am cer­tain that Clay’s reported ini­tial “reporters beware” point has been lost. Most recently, I found Tris­tan Louis’ analy­sis inter­est­ing albeit still lack­ing any mean­ing­ful dis­cus­sion past the num­bers, the bloody num­bers. I was won­der­ing how Clay and oth­ers might report on, say a street per­former that draws an inor­di­nantly large crowd at Wash­ing­ton Square. I sus­pect it

3. 3Quinta 's weblog : Il Blog di Stefano Quintarelli — January 11, 2007 at 10:05 am

   pro Io non credo sia sosteni­bile nel lungo ter­mine a meno che non cambi. Un ambi­ente chiuso e’ des­ti­nato ad essere super­ato da un ambi­ente aperto a meno che ci siano for­tis­simi fat­tori di lockin e net­work effect (per una anal­isi appro­fon­dita, consiglio

4. 4Communities Dominate Brands — January 11, 2007 at 6:24 pm

   … and though I am still fas­ci­nated by SL, I have pon­dered from time to time.… why SL? Why all the media atten­tion, is it because of Mil­lion­so­fus and Rivers Run Red or is it some­thing else? Some­thing more… mer­cu­r­ial. Tris­tran Louis, has done some num­bers . He says 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

5. 5 Madame Maracas’ Blaaagh — January 26, 2007 at 12:41 am

   breath­less tid­bits about stuff of all sorts. Lawrence Lessig a name well-known around Sec­ond Life, blogs about many other things as well, but you might want to check out his Jan. 5th 2007 entry about SL pop­u­la­tion and eco­nomic growth. Jimmy Wales is the founder of Wikipedia amoung other accom­plish­ments. An inter­est­ing guy to be sure. Ok that’s all I have for today, I’ll see about putting these links over on the right later on!

6. 6Tame The Web: Libraries and Technology — January 18, 2007 at 10:28 pm

   http://tnl.net/blog/2007/01/05/running-the-numbers-on-second-life/ Fas­ci­nat­ing dis­cus­sion and analy­sis of SL stats. Read the com­ments too. And Reuters offers a list­ing of SL arti­cles at: http://secondlife.reuters.com/stories/category/second-life/ — Thanks to Jody at Hen­nepin County for send­ing that link.

7. 7Как арбуз, только вкуснее — March 9, 2007 at 2:05 pm

   независимое исследование

8. 8BGNonline Business Growth Network — March 5, 2007 at 1:11 pm

   The Tris­tan Louis blog eval­u­ates the growth rate, and eco­nomic activ­ity claimed by Lin­den Lab for Sec­ond Life. His series on vir­tual worlds from last sum­mer includes a close look at the economies of vir­tual worlds. Tech­no­rati Tags:

9. 9Global Neighbourhoods — January 14, 2007 at 3:55 pm

   Doc Searls recently point­edto this posted chart that indi­cates Sec­ond Life will have 3.7 mil­lion reg­is­tered users by April. The num­bers will grow at an astound­ing rate and the appli­ca­tions for this vir­tual real­ity seem to be lim­ited only by the user’s imag­i­na­tion. Nicole Simon recently wrote the the

10. 10Of Interest — September 2, 2010 at 9:42 pm

11. 11GigaGamez » Archive » Second Life: People Light, Cash Heavy? — January 5, 2007 at 9:49 pm

    […] Analy­sis Om just passed on a fas­ci­nat­ing entry from the blog of Tris­tan Louis, an appli­ca­tion devel­op­ment VP with finan­cial giant HSBC. Inspired by Clay Shirky’s scathing (and some­what dis­puted) take­down on the media hype sur­round­ing Sec­ond Life, Louis began crunch­ing the eco­nomic activ­ity num­bers avail­able on the vir­tual world’s home­page, and in the company’s finan­cial stats sec­tion.  Was Sec­ond Life as small and as sparsely used as Clay claimed?  Track­ing that and the users who’ve entered the world since August, Tris­tan Louis came up with a some­what con­trary, and entirely stag­ger­ing, con­clu­sion: 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. [emph mine] […]

12. 12Planblog » Blog Archive » Second Life: More numbers… — January 6, 2007 at 3:06 am

    […] The TNL.net weblog (01/05/2007) — Run­ning the Num­bers on Sec­ond Life […]

13. 13Growth predictions for Second Life at NevilleHobson.com — January 6, 2007 at 7:19 am

    […] Via GigaGamez, I found a fas­ci­nat­ing post by Tris­tan Louis, an appli­ca­tion devel­op­ment VP with finan­cial ser­vices group HSBC. Louis’ post is about sta­tis­ti­cal analy­sis of Sec­ond Life num­bers relat­ing to how many users there are, how much money is spent, and other eco­nomic data. […]

14. 14Clay Shirky — January 6, 2007 at 7:27 am

    But there is no pub­lished met­ric of “Reg­is­tered Users” — the Res­i­dents fig­ure includes peo­ple who signed up but never logged in, as well as alts. “Res­i­dents” rep­re­sents a 50% infla­tion over actual peo­ple, and most of them bail after the first month.

    David Kirk­patrick of For­tune just got some real fig­ures out of Lin­den, and only 1.5M peo­ple have ever logged in (the gap between 2.3M Res­i­dents and 1.5M peo­ple is from the alts and sign up/no login peo­ple), and of that fig­ure, only 250K have logged in more than 30 days later.

    In other words, the high­est pos­si­ble fig­ure for active users is 250K — the actual num­ber is lower, but we don’t know how much lower. It also means that only a minor­ity of the Last 60 Days logins are active users.

    http://many.corante.com/archives/2007/01/04/real_second_life_numbers_thanks_to_david_kirkpatrick.php

15. 15Tristan Louis — January 6, 2007 at 11:37 am

    Clay,

    Thanks to your com­plaints and David Kirkpatrick’s efforts, we have more num­bers to ground our­selves in. How­ever, there are two other things I find inter­est­ing:
    1. The rev­enue fig­ures: If you’re cor­rect then my num­bers in terms of dol­lars spent per user are actu­ally on the low side, which would point to an even wealth­ier crowd which is much more finan­cially active than we’ve come to expect. That, in itself, could war­rant some inves­ti­ga­tion.
    2. The growth rate is the other thing that we should take a look at. Assum­ing that the num­bers of res­i­dent they report are inflated, let’s assume that we half the growth rate num­bers. So that would be a growth rate of roughly 3 per­cent a week! Through the magic of com­pound­ing, this rep­re­sents a fairly stag­ger­ing yearly growth rate.

    So the ques­tion is: con­sid­er­ing that the “res­i­dent” num­bers were inflated, should we com­pletely dis­miss Sec­ond Life or should we look at the other met­rics before we actu­ally claim the emperor has no clothes?

16. 16Clay Shirky — January 7, 2007 at 7:19 am

    We should of course look at the other num­bers, and there’s no rea­son to “com­pletely dis­miss” Sec­ond Life — there are thou­sands of active users, which means it obvi­ously has some value. Its just a dif­fer­ent value, cal­cu­lated via social proof, than hav­ing mil­lions of users.

    To take your ques­tions in reverse order, we don’t know what per­cent­age of users in any given month have accounts that are more than a month old. In Decem­ber, the high­est that num­ber could have been is 250K (which is a mea­sure of any­one who has _ever_ logged in in two months, even if it was last July and August and they never came back.)

    The actual num­ber of cur­rent users with a month of expe­ri­ence — call it X — is smaller than 250K, but we don’t know by how much. This unknown num­ber mat­ters because it is the pop­u­la­tion mea­sure of active users a new­bie or busi­ness could expect to encounter in SL and estab­lish any sort of rela­tion­ship with.

    One pos­si­bil­ity is that once some­one comes back twice in two months, they’re hooked, so growth in the “ever logged in twice” fig­ure tracks X closely. This is Kirkpatrick’s hypothesis.

    Another view is that aban­don­ment con­tin­ues after the first month, at lower than the 85% one-month rate, but high enough to make a dif­fer­ence. (At a guess, the 3 month activ­ity fig­ure is a third lower than the 1 month figure.)

    So Kirk­patrick got us a snap­shot of growth in poten­tial active user base — we do not yet have a sec­ond data point to mea­sure change in growth (the 23% fig­ure he quoted was from the month of the Busi­ness Week cover) and we do not know how closely active user base tracks poten­tial user base.

    To your sec­ond point, about eco­nom­ics, since cur­rency is a big per­cent­age of the trans­ac­tions in SL, and since aban­don­ing avatars leave their $Ls in-world, some of the eco­nomic activ­ity may be a trans­fer of in-world cur­rency from the absent to the present. (I’ve been talk­ing to some­one run­ning a bank in SL, where a chunk of their rev­enue comes from just such abandonment.)

    If you are look­ing at eco­nom­ics, drop me a line — [Tristan’s note: Email address has been removed to avoid spam­ming] — and I’ll intro­duce you to some of the folks I’m talk­ing to.

17. 17Tristan Louis — January 7, 2007 at 3:06 pm

    Clay,

    I agree that the per­cent­age of users in a given months is some­thing we don’t know (which is why I started track­ing reported data so I could get a more accu­rate view). How­ever, what we do know is that There is growth in the num­ber of logins. If I read the stat cor­rectly, the logins in the last 60 days rep­re­sent­ing unique accounts that have logged in dur­ing that period. That’s why I tried track­ing per­cent­age of users who have logged in the last 60 days. That num­ber seems to be around 40%, which would point to an aban­don­ment rate of 60%. That last fig­ure could be con­sid­ered high but it appears that it’s not affect­ing SL than much due to the fact that their new users are com­ing in at a fast clip.

    So the analo­gies could be along the lines of what hap­pened to AOL in the begin­ning or what hap­pens to mobile phone com­pa­nies. The churn rate is high but there are still peo­ple join­ing in.

    I wish I knew when the data Kirk­patrick had is from and what was the reported num­ber at that time. It’s true that there is a large delta between what Lin­den reported pub­licly and what it appears to have reported to Kirk­patrick so Lin­den Labs needs to come clean on this. The pro­vi­sion­ing of his­tor­i­cal data would also be an impor­tant thing (as far as I know, this post is one of very few to show his­tor­i­cal data on Lin­den Lab at a time when the com­pany could pro­vide that for free).

    As far as eco­nom­ics are con­cerned I see your point. My view is actu­ally that there is another thing to take account which is the num­ber of times a Lin­den dol­lar is recy­cled. It may be that a sin­gle dol­lar is respon­si­ble for 50 trans­ac­tions a week (and there­fore open­ing up the specter of online gam­bling and Sec­ond Life) so once again, more trans­parency would be nice. How­ever, to your note about dol­lars stay­ing in as a result of aban­don­ment, there’s also the ques­tion of dol­lars going out. Based on the Lin­dex activ­ity, it’s not hard to think that there’s about US$1 mil­lion leav­ing the game on a monthly basis (my own assump­tion here) and so there could be some inter­est­ing effects there. I’ll drop you an email sep­a­rately on this to get con­tact info from peo­ple look­ing into this or you can point them to this thread so we can keep it all in the open for every­one else to read

18. 18A Second Take on Second Life’s Economic Situation by Video Games — January 8, 2007 at 1:12 am

    […] Tris­tan Louis, an appli­ca­tion devel­op­ment VP for HSBC, recently made pub­lic his eco­nomic analy­sis of the per­ti­nent num­bers avail­able on Sec­ond Life’s web­site.  For those of you who don’t know, Sec­ond Life is the highly con­tro­ver­sial MMO 3D dig­i­tal world in which pay­ing sub­scribers inter­act in ways analagous to real life.  The only things truly con­nect­ing it to real­ity are a) sub­scrip­tion fees for high-tier mem­ber­ship plans, and b) its in-game econ­omy, which can be exchanged for real money.  Like all real cur­ren­cies, the exchange rate  from “Lin­den Dol­lars,” as the cur­rency is called, to USD fluxuates. […]

19. 19Mobil Avenue » Blog Archive » Out with the old - in with the new — January 8, 2007 at 7:15 am

    […] Just the day before Tris­tan Louis, a VP over at HSBC, crunched some SL num­bers fore­cast­ing 3.5M accounts and +600k users at the end of April 2007. Regard­less of whether you believe Tristan’s num­bers to be con­ser­v­a­tive, accu­rate, opti­mistic or some com­bi­na­tion thereof each of the above posts rein­force the ongo­ing inter­est around SL which con­tin­ues apace. SL is no longer a fad some quar­ters were pro­fess­ing but rather a very real trend of where things are headed as we enter the third wave of the Inter­net — the Liv­ing Web. […]

20. 20Information Politics | Blog | Just how big is Second Life? — January 9, 2007 at 4:49 am

    […] Tris­tan Louis and Clay Shirky debate the num­ber of Sec­ond Life par­tic­i­pants (hype ver­sus real­ity) in this blog post and com­ment / dis­cus­sion. Today, for exam­ple, Sec­ond Life claims that Lin­den has approx­i­mately 2.4 mil­lion ‘residents’. […]

21. 21Lawrence Lessig — January 9, 2007 at 7:02 am

    ve been a long time sup­porter of Sec­ondLife. Yes­ter­day, they made me proud. Sec­ondLife announced it will GPL its client soft­ware. And it com­mit­ted itself to free­ing the back-end as well. How sig­nif­i­cant is Sec­ondLife? Here’s a really inter­est­ing empir­i­cal study by Tris­tan Louis about Sec­ondLife activity.

22. 22links for 2007-01-09 at Metaverse Territories — January 9, 2007 at 3:54 pm

    […] Run­ning the Num­bers on Sec­ond Life The TNL.net weblog> 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 (tags: busi­ness data sec­ondlife sta­tis­tics trends pop­u­la­tion online mmorpg) […]

23. 23The Doc Searls Weblog : Sunday, April 8, 2007 — January 9, 2007 at 11:06 pm

    [IMG] Tris­tan Louis runs the num­bers on Sec­ond Life. A con­clu­sion: 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

24. 24Venture Chronicles — January 10, 2007 at 6:50 pm

    […] The link below has an inter­est­ing analy­sis of the SL num­bers and how much money peo­ple are spend­ing in the vir­tual world. The TNL.net weblog » Run­ning the Num­bers on Sec­ond Life: 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. Tech­no­rati Tags: Sec­ond Life Posted in Uncategorized || […]

25. 25update: Second Life in nrc.next at 0031 New Media Development — January 11, 2007 at 4:43 pm

    […] Naast alle hal­lelu­jaberichten over Sec­ond Life zijn er gelukkig ook mensen die ‘harde’ cijfers bijhouden over Sec­ond Life: check: http://tnl.net/blog/2007/01/05/running-the-numbers-on-second-life/ […]

26. 26CC — January 12, 2007 at 7:33 am

    Lin­den Labs num­bers are being bloated by the use of res­i­dent cre­ated bots. I own just one sim and have banned over 150. If this is any indi­ca­tion of the *num­bers* then every­one is being fooled.

    Appar­ently LL doesn’t allow it because they did delete over 100 bots with greek first names in Decem­ber. Now the bots have pro­files and group names and are hard to dis­tin­guish from other residents.

    I would rather see on Lin­den Labs front page the actual num­ber of pay­ing res­i­dents or res­i­dents with pay­ment info on file. All this hype over their grow­ing num­bers is hilarious…but then Lin­den Lab is laugh­ing all the way to the bank…

27. 27Prokofy Neva — January 14, 2007 at 2:35 pm

    You need to keep your eye on the num­ber of those who buy pre­mium accounts who own land on the main­land. I think it’s a good num­ber to watch to see if the world is really grow­ing. Add to that the num­ber of new islands bought and num­ber of island own­ers. The tier-payers and island-bill pay­ers are the peo­ple who pro­vide 70 per­cent of Lin­den Lab’s rev­enue, they are like another ven­ture cap­i­tal­ist, taken as a group, spend­ing more than $10 mil­lion a year. This fig­ure isn’t over 40,000 peo­ple right now, but they account for most of the high end of the eco­nomic transactions.

28. 28Raph — January 14, 2007 at 5:36 pm

    So, am I mis­taken in think­ing that the $50–60 is just a mea­sure of liq­uid­ity? I give $5 to you, you spend it, that per­son spends it, the next per­son spends it, and it looks like $20 in trans­ac­tions. That’s what those fig­ures are mea­sur­ing. It in no way means that all of that is rev­enue flow­ing into Lin­den or (net) into the hands of users. It’s veloc­ity, not quantity.

29. 29Morris Vig — January 17, 2007 at 10:36 am

    Agreed with Prokofy Neva. The pre­mium accounts are critical.

    In addi­tion, it would be worth­while to track the num­ber of unver­i­fied accounts. An ind­vid­ual griefer attack (a mali­cious user, using an unver­i­fied account for the pur­poses of anonymity) can cre­ate a hand­ful of unver­i­fied accounts in a sin­gle attack.

    An exam­ple for the unin­formed: A griefer logs on to an unver­i­fied account and launches a mali­cious, self-replicating object at an event. SL res­i­dents advise Lin­den Labs staff, who ban­ish the account. Griefer, hav­ing been banned, reen­ters SL with unver­fied account #2. SL res­i­dents again advise Lin­den Labs, who in turn bans the griefer’s new account. And so on. A given griefer attack — like one I per­son­ally wit­nessed this week — can cre­ate 5 new unver­i­fied accounts before the griefer appar­ently gets bored and leaves.

    Now, unver­i­fied accounts also are used for more pro­duc­tive aims. But I would haz­ard to guess that many of the accounts where users are NOT log­ging back in are griefers.

    As a side note on griefers, their attacks are increas­ing in Sec­ond Life. I sus­pect that con­trol of these attacks will be a major focus of future soft­ware upgrades — espe­cially as more and more cor­po­rate (read: big dol­lar spend­ing) cus­tomers are com­ing on line and Lin­den Labs can­not afford any egg on its face just as it appears to have hit the tip­ping point.

30. 30Venture Chronicles — January 18, 2007 at 8:59 pm

    curve to get up and going was suf­fi­ciently steep (mean­ing I had to read some­thing) that I never both­ered to get past sign­ing up. The link below has an inter­est­ing analy­sis of the SL num­bers and how much money peo­ple are spend­ing in the vir­tual world. The TNL.net weblog » Run­ning the Num­bers on Sec­ond Life: 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

31. 31CNET Japan Blog - Lessig Blog (JP) — January 18, 2007 at 9:00 pm

    SecondLifeがどの程度重要かについては、Tristan Louisが興味深い実証的研究を発表している。

32. 32Second Life’s accelerating growth at NevilleHobson.com — January 29, 2007 at 9:57 am

    […] Still, impres­sive — and expected — growth. […]

33. 33SES: Search Supports Sitemaps Autodiscovery | WebProNews — January 29, 2007 at 9:33 pm

    days. Indeed, many peo­ple sign up for a Sec­ond Life account and do not log in within 60 days (back of the enve­lope cal­cu­la­tions based on Lin­den Lab’s pub­lished sta­tis­ti­cal data say around 8,500 per day sign up but don’t log in).Still, impres­sive — and­ex­pected — growth. Related post: Growth pre­dic­tions for Sec­ond Life Com­ments [IMG]Reddit | [IMG] Furl Book­mark WebProNews: [IMG] [IMG]

34. 34Second Life Growth Accelerates | Latent Semantic Indexing — February 15, 2007 at 2:47 pm

    […] Still, impres­sive — and expected — growth. […]

35. 35Welcome to TNL.net — February 21, 2007 at 2:17 pm

    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 […] 20 Com­ments — in Busi­ness, Convergence

36. 36CARNET DE NOTES — March 4, 2007 at 3:53 pm

    Vejam o relatório, Run­ning the Num­bers on Sec­ond Life com vários dados sobre o Sec­ond Life. Segundo os dados, em 01 de janeiro são 2.287.108 res­i­dentes e nessa data, cada um gasta em média $57,12…and counting…

37. 37The Vandiver Group Blog — April 12, 2007 at 5:15 pm

    grow­ing world. CNN/Money reported a two-month growth rate of 77% for November/December 2006. As Dr. Paul Lein­berger recently pointed out in his lec­ture series enti­tled “Dig­i­tal Life: Liv­ing In A Con­nected World,” we are in the midst, not at the end, of a

38. 38Fauxpeness «The TNL.net weblog — August 26, 2009 at 2:05 pm

    […] But, only two years ago, the answer would have been Sec­ond Life (some­thing I learned first hand, hav­ing been part of the hype around it back […]

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