About the economics of Second Life

The Register ran a story one week ago about the economics of Second Life. They are taking a very close look at the hard facts of the economics in Second Life beside the hype. Some measures are really interesting and were even new to me.

First, there is the churn rate. Only about 15% of the people who create an avatar in October 2006 logged in again after their first 30 days in SL. Very interesting measure, indeed. This drastically reduces the number of real residents, of course. Even more when you take all alts out.

There are about 4 million residents at the moment, when you do the math, this means that there are really about 600.000 residents who login regularly (alts included in this measure).

They are also pointing out that the maximum number of avatars in one sim is around 100 at the moment; also a very important restriction on doing business in SL. But then again, the business in SL has found ways around it.

70% of the revenue of Lindenlabs is generated at the moment by land sales and tier fees. No surprise in there. It’s a bubble at the moment, bound to burst sooner or later. Of course, LL would like it to burst later to generate more profit out of it.

Last number is that there are around 50.000 premium users at the moment; that’s not really much for such a big game/platform/whatever.

It’s a nice article with some new insides beside the mainstream and definitely worth a read.