Tyche Shepherd

Here is my sneaky peak at the 1st Quarter 2010 SL economy. In a few days time I'm sure T Linden will present his official figures but again whilst I have the data it seems silly not to disseminate it further.

Grid Size
The Main Grid has shown steady growth this quarter,up from 29681 regions to 31219, a net increase of 1538 regions. Much of this growth was due partly to the new Linden Home Project which went live in mid February. Private estates grew by 674 region (2.8%) to 24707, even with the selling of Azure Islands to ACS and the following consolidation, whilst Linden owned regions grew by 864 (15.3%) to 6512.




Users

The number of unique accounts logging in in the past 7 days has shown a jump this quarter, now a daily average of 588,916 for each month of the quarter, up 5.4% on last quarter , This is now at it's highest figure ever, breaking the previous high in the Q2 2009 period.
Whilst regular users are showing growth last quarters small but noticeable decline in the more infrequent users continued this quarter(i.e those who have logged in between 31 and 60 days)




Monthly past 7 day logins are as follows:



I don't have historical concurrency figures prior to last December, but the trend in concurrency seems to show that this quarters figures are up on December 2010




Land Sales


This quarter there has been a small decline in the amount of land for sale and the number of residents selling land , marginally down from the more or less constant rates for 2009. As with last quarter the number of parcels for sale has declined at a faster rate, indicating that whilst there are fewer parcels for sale, the trend is for these parcels to be larger.




Actual land sold per month this quarter was over 131 million sqm, 4.9% on last quarters sales and about the same as the peak figures seen in Q3 2009. However ,this quarters land prices declined yet again to an all time low mean price of L$0.85 per sqm.This means that whilst volume of sales is high the actual value of land has plummeted. This drop in land value does mean that the relative importance of Land sales to the SL economy has also dropped, Q1 2010 total land sales only account for 0.79% of all transactions by value, a significant decline from earlier periods, though only marginally down on last quarter.



L$ Sources and Sinks

L$ Sources were overall significantly down on Q4 2009, Stipend payments remained steady compared with last last quarter but Linden Sales on the LindeX for this quarter were significantly down by 58% .


However L$ Sinks activity was significantly up this quarter. Classifieds were down 6.3% on Q4 2009, a similar trend to last quarter. However Group charges were up 5% whilst Upload charges were stable on last quarter . The Other Sink category was significantly up on previous quarters , mainly due to an exceptionally high figure of L$439 million in March , the average monthly figure for the past year has only be about L$70 million. I'm unsure of what this figure is exactly but I suspect it may have something to do with the merging of Xstreet and SL transactions.



EDIT: 9th April - Looking further into the L$439 million Other Sink figure for March I'm suspecting that it is an error - the Month to Date figures for 29th & 30th March were L$76M & L$78M - there was no 31st report and then 1st April report showed L$82M - By the 2nd April the monthly switchover had occurred and the figures was now reporting as L$439M for Previous month (March) - Sounds like a glitch ... or something very structural.

LindeX Activity

As with concurrency figures, I currently only have a small amount of back data (Daily figures back to October 2009), recent months have shown marginally more LindeX activity than those of last quarter




Transactions, Expenditure and Profit

Resident transactions stayed steady in terms of overall number from last quarter. Whilst the total number of transactions has remained constant the average value seems to have increased, with a large decline (7.9%) in L$1 transactions and corresponding increases in all other transaction amount categories. The Median Transaction is now L$34 up L$1 from last quarter whilst the mean jumps 6.8% from L$480 to L$513.






Monthly Customer Spending tells a slightly different story with a small increase in the number of customers spending L$1 or more, up 3.5% on last quarter to a new peak monthly average of 498461. All categories of customer expenditure showed increases so whilst more customers spending, on average they are spending about the same amount each, resulting in overall total expenditure being up by 3.1%.






Total unique users with positive monthly L$ flow was up on last quarter reaching a new high of 71168 per month, up 4.1% on Q4 2009. The largest percentage growth was in the $2000-$5000 category who grew by 7.6% on Q4 2009 though the largest increase in number was in the <$10 category, followed by the $10-$50 group. Using midpoint estimates total In-World Profits came to US$7,153,447 1.5% up on last quarter. Whilst a small number of individuals , there were however decreases in the $500-$1000 category (1.1%), $1000-$2000 (down 2.9%) and the >$5000 category (down 3.4%). The brings the mean PMLF value down overall, dropping by 2.5% to $100.52 USD whilst the Monthly Median showed a very small rise up 0.7% to $8.91USD





PMLF includes all L$ Sinks and Sources (such as Classified charges and Stipends) but it excludes all US$ costs such as land rental costs.
So if we take the total PMLF figure of $US$7,153,447 per month as gross profit
We can calculate overheads as Private Estate monthly tier of US$5,138,000, Mainland Tier of US$1,077,000, Monthly Premium Account Subs of US$507,000 and typical Monthly new region purchase costs of US$130,000 for a total cost of US$6,852,000 (these figures are based on my Land survey estimates).
This leaves a Net profit of US$301,447 (4.21% of Gross Profits).

Of course this calculation assumes that all costs of business are borne by only the 71,168 PMLF residents and all other users have no overheads and also excludes other external income or costs (such as rental income paid vi PayPal) and ignores VAT costs for European Users.


Summary

Generally Q1 2010 looks good, almost right across the board shows a small rise in economic activity over last quarter. There are more frequent users logging in , and more people spending, with individual expenditure being stable . When one looks at the individual months making up this quarter we also tend to see that March is the best month on most measures, with the shorter February tending to have the "worst" figures of the quarter, so things look positive. I think there is some small cause for concern at the drop in many of the the higher PMLF categories, though as representing a relatively small group of people they have tended to show more volatility over previous quarters as well as this one, it's something to watch over the coming months.

EDIT: All the data used to create this analysis is available at Second Life Economic Metrics Repository and is available for download

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Jura Shepherd

Bless yer lil' heart cousin Tyche

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Camille Serpentine

When you have gaps in the information (ie. logged in last 7 days graph), is it due to LL not putting out the data?

Tyche Shepherd

Yes that's the main reason - basically the information is just not available . In particular there was a big hiatus around May 07 which creates a gap in several series . Though potentially there could be a glitch at my end when collecting ,but to date (touch wood) there hasn't been one at my end with the above data .

Jesse Barnett

Don't know what they all mean but the charts sure are pretty!

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Desmond Shang

Extremely good Tyche, did you see anything that indicates spending types? Land, clothes...? Merchants are telling me sales horror stories these days; I do see lots of new resident churn but maybe not solid fundamentals in the economy.

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Eclectic Wingtips

Honestly I think the horror stories come from increased competition and the lack of continued marketing.

The SL markets are extremely fickle and to keep your name remembered for the most part, especially in fashion you need to keep your name constantly on people's minds. This means marketing and lots of it. Not stopping when you are getting sales and not relying on one form or old forms of marketing, as the areas marketing works bestis constantly changing.

I have worked my business up in less than a year to a point I am extrememly happy with. If the markets were going bust like so many scream and shout no way on earth would I have been able to achieve the sucess that I have.

I think in the end many of the older businesses ARE seeing a loss due to an increase in competition, but more importantly a lack of understanding or willingness to compete within the now bigger pool

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Tyche Shepherd

No. Other than Land I don't have any stats which say how different sectors are doing - All I can say is that Land is still selling well, though at incredibly low prices and now accounts for less than 1% of the economy. The rest of the economy seems to be at least as active as last quarter, if not better. No signs of a crash or crisis ... or maybe no changes in the ongoing crisis that is SL .

Evil String

Basically they mean.... "The Sky has been falling during the 1st quarter"
Nothing changed.

Evil String

I just think SL is too complicated so that only one person can handle a decent business in SL. You can't be an expertesee in all the areas needed and sooner or later your problems grow. If you work in marketing, you can't design if you invest your time in designing, you can't promote. You also need time to think about new products and also get inspiration and browse for new templates you can work with or sculpt maps you can use or textures you'd like to test.

Either you are a very very organised person or it gets too complicated.

Not to mention service in the weekends, many people shop weekends and need help, what makes SL business a kind of deamanding job also in the personal area. It is complicated to have holidays if you are alone. The more you grow, the easier to get furstrated.

However, what I ahve talked in person with a few people is guiding me to something different. Many dicrease of merchants began when the new search was released. Since it is a secret, I can't confirm and I need time to run my test, however I think the new search is biased <---- insert a conspiracy theory here

Eclectic Wingtips

Ohhh i agree it takes a LOT of time and effort and exploration within marketing to get yourself noticed and doing it on your own is seriously overwhelming at times.

SL businesses are demanding, and I think if you dont continue to enjoy it thne it becomes harder and harder. I have been growing at a rate of around 15% per month, which is steady growth that I am happy with but not too fst to overwhelm me.

Hmmm interesting about search being bias, if it is then yay me? I show up on the first two pages of most of my main keywords

Anya Ristow

Sorry to do this here, but your post hits all my hot buttons.

1) Just do more marketing

Can you provide links to or descriptions of your marketing? Sorry to be a skeptic, but I see no good marketing in SL, and no good avenues for marketing in SL other than very expensive ones provided by LL, which I don't see you taking advantage of. When pressed I find that by "marketing" most people mean "search gaming". So, if you're going to claim that success is a matter of marketing, can you please point to your own marketing?

2) I have worked my business up in less than a year

You have 3000 items listed on xstreet. Is that the key to success? I won't comment on your items, but I'll say that it took me hours to release each product, independent of the time it took to create them. I have no damned clue how you can even make 3000 xstreet listings in a year (or two), even if your products are appearing out of the ether.

3) vague stories of success

You have not defined success. Frankly I think stories like yours are ruining people's lives. Not yours, specifically, but the abundance of stories like yours, encouraged by LL. People are spending more time and money on SL than they can afford chasing vague possibilities of success, except that success isn't defined. When pressed, most stories like yours turn out to be people making tier, or able to buy virtual dresses without a credit card.

Are you making even minimum wage on your time spent?

I believe SL is powered by desperation and deception. These are not sound fundamentals.

It makes no difference to me if the trouble for merchants is competition, marketing, LL fraud or something else. I believe the ones who have a healthy balance of honesty, time spent and real-life return are hurting, and this needs to be part of the story people hear before they spend a lot of time and money on SL.

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Anya Ristow

I believe resellers and copybotters are doing just fine. I believe it no longer makes a lot of sense to spend real time developing products. I think the market isn't large enough to support real-world effort. I believe it's possible to earn real-life money on content creation only if you can release content unrealistically fast. And I believe that even as unimpressive as the numbers are, some of it isn't even real.

Eclectic Wingtips

My marketing includes a vast range of things, while I wont list everything I do here this is a snapshot of what i do:

-List items on Xstreet and slapt.me
-List items in the new products section here
-IM new customers and thank them for shopping with me and inveite them to my update subscriber (this has around a 30% yes response and in the year i have done itonly one negative response)
- Send notices to the various fashion groups i belong to
-Blog my items and have my blog linked to the various fashion feeds
- Send review items to bloggers once every 2 months or so
-Give occassional freebies and send notices to the freebie groups when i do so
-Also give those gifts to freebie bloggers (though most belong to my updat group now and blog me before i send out a package now)
- Add a description to all my items for sale in my store including usefu and relevant keywords
- Invvite people in various ways to add my store to their picks
- Offer gift crtificates to a few clubs in exchange for advertising my store in various ways
- I am beginning to set up cross marketing ight now with a group of designers (hair, skins, shoes) which will go acorss all of our stores and update groups

No, my Xstreet sales account for approximately 15% of my total sales. though i would gues at it acounting for possibly another 10% in world? So possibly 20 to 25% of all sales.

Most of my items are the same thing offered in various colours (thanks to LL's incompetance in offering us the ability to offer all colour options in one listing). when i do a new release adding to Xstreet takes around 1/2 hour to an hour depending on how much i am procrastinating while I do it.


You are quote right, sucess IS relative and it will depend on what your end goal is. Right now I make enough to cash out a decent chunk each month. I am not happy to discuss the specifics of exactly how much on an internet forum, but it goes beyond just paying tier and buying thing in world. It pays for a nice protion of my expenses while I finish school

I have no idea if it pays a minimum wage, probably not, but then again I enjjoy it and I am able to do it on and off when my uni work load isnt too heavy. There are very few jobs where I would have the ability to not show up for three weeks when I have major assignments to do, so for flexibility im willing to take a pay cut.


I agree in some respects. I dont believe that we should be touting that SL is able to make people great money easily because it ISNT. But for established busiensses who say they are losing 50% or more of their earnings, well in those cases much of that lost income can be seen by lack of marking and increased competition.

Not saying they are the only factors but they sure as hel are a large part of it. As hs been shown the economy is still growing, which means that money is going somewhere

Eclectic Wingtips

this may be where I see the continued noticability. I release on average three new items a week. for me that isnt a big stretch. I make items with reasonable ease and have my boxing and ads etc down to the point I can do them rather quickly for me three items a week is not uunrealistic

Candace Morgwain

I agree with your points here Confused and follow much the same path with my business. Fickle describes the SL market to a tee and I've used that description myself often.

I agree that marketing in SL is a lot of hard work and we reap little reward compared to what we actually put into it. I'm really happy with my success right now too, but I've been open two years this week and it's taken a lot to get here, but much more to STAY here. We're more enthusiastic as business owners when things are new and things go well. When we hit a few bumps in the road (whether from LL changes or RL-SL market downswing) and have to adapt, then it starts to get harder. Do we learn to adapt, try new things, actively look for new ways to market, and reach customers? Or do we give in to the sometimes overwhelming feeling of defeat?

I for one always choose adaptation. What helps A LOT is having an inworld group of friends that help each other with business marketing. I know I'm always willing, and have helped, new and existing business owners with new ideas.

In the end though there's no magic fix, there's no one thing (and we should never rely on just one form of marketing anyway) that will make us successful. It's ingenuity, creativity, and tons of hard work.

And thanks so much Tyche for the great analytics! I mostly lurk on these forums but have followed your findings for awhile

Candace Morgwain

*laughing* I remember on the old XStreet forums when you posted about your method of creation of new items and I was like...she's crazy! How can she do that?! I didn't get offended at all though, but I remember one or two did. I just took your advice, since you offered it so freely, and cut my creation time into a third of what it was before!

Ciaran Laval

Just what is wrong with resellers? I'm talking about genuine, agreed with the creator, resellers, which I admittedly do a lot of and the creators have thanked me for, so if they're happy, what's the beef?

Ciaran Laval

Do you mean Supply Linden sales are down 58%?

Tyche Shepherd

Yes , the monthly based chart is this



March was exceptionally low (and maybe a data glitch) but Jan and Feb 2010 were also down on the previous quarter

Edit: - and when I now look at L$ supply there has been a dip in the past few months - deflation hits SL!!!

Sin Toshi

Link please!

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Candace Morgwain

Hah! I can't even remember when or what thread! I do remember we were talking about time spent in SL but related to what I'm not sure. Confused posted how she organized her clothing she creates. I'm not sure what exactly her way was, but I based mine off it and it's cut down so much on my creation time! I have a folder of new clothing parts with permissions already set. They keep their default names. I wear the items, they get saved as with their new name. Maybe it seems simple to others but I began that over a year into my business life lol so I was a bit late in saving so much time.

Couldbe Yue

you're right about the time sink - just keeping the basics going takes a lot of time - let alone being able to develop more items/packaging etc. It's asking the impossible to be good at everything - from product identification to design, construction packaging, marketing and customer service but that's what most of us have to do

I'm in the band that tyche has identified as suffering a decrease. I've been watching my stats and since viewer 2 came out my sales have begun to nosedive and considering they were not particularly fabulous courtesy of zindra I'm not best pleased. LL were supposed to have released the new search appliance on mar 17 - they didn't blog it so i assume they didn't but something is certainly going on as I've changed nothing yet my turnover is declining at a rate that is quite disturbing and doesn't match the supposed 10% take up rate of viewer 2 (which is designed to hide ads etc)

but, we'll never know for sure as LL don't really care about telling us important stuff

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Liandra Hellershanks

If you think that the only good avenues for marketing in SL are those provided by LL, then it's no surprise that you don't see any good marketing in SL. You're not looking in the right place.

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Eclectic Wingtips

Ahhh i know what Candace is refering too

Basically I have a very specific method for making my clothing, boxng and doing ads which takes (for me) minimal time and I can have a dress on all layers in folders and redy to be boxed in around 15 minutes.

Basically I have a folder with all the layers (with sliders maxed out) saved which is called my starter folder.

To begin starting my clothing i put every layer on me and begin go into edit appearance. I add the texture and save as on the jacket layer (I always start on the same layer) and name it.

Use ctrl C to copy the name

Then i go to every other layer and repeat, but using ctrl V to paste the name (adding in things like pants or jacket as needed)

I continue this process until all layers in all colours are done. you do one colour at a time not one layer at a time.

Then if need be i rez the relevent skirt (I ahve all my skirt styles in another folder which I rez as i need in both sizes) make X number of copies for the colours.. add textures.. re name, pick up

Then just make folders using copy and paste again, but cjagning the colour in the folders drag and drop using shift, they should all be in sets already so just select all the layers.

Takes about 15 minutes and everything is in order.



May not work for everyone, but I can get everything completely organised in 15 minutes or less.


When I do ads etc I have a similar policy. I do everythign in bulk. This saves significant amounts of time. At any point I have a backlog of around 15 to 20 creations which can be added to the store when I like.

One day a month or there abouts I will stand on a pose stand and take ads for 20 or so creations in all their colours. This takes around 2 hours.

I save them to specific folders in my HD named after the item so everything is already organised.

Then One they are all done I go in and remove the backgrounds. I do this while watching a movie because itis tedious.

Ones that is all done all I ahve to do is copy and paste the pics onto my already set up ad boad, change a few words (the name of the item etc) and upload.

All in all doing around 20 ads in up to 8 colours each takes around 4 hours.

Doing it this way I save the files on the transparent background which I often use later for things like blog posts where I want to do soemthing different from my boring vendor ad.

Hehehehe I have a similar policy with boxing up.

Do everything in bulk, it works faster when you get into a rhythm