Can You Help Me Figure This Out?

Financial, Linden Labs

While looking through the Economic Statistics for Second Life, this morning, I noticed something that seemed a little odd. In the last graph, titled “L$ Sources and Sinks”, the is a description for “Stipends”. The figure for the sources (or the amount paid to residents by LL for January 2008 was L$165,319,050. Breaking this number down to the amount of stipend paid to each resident, we can see that in January, they paid stipends to 551,063.5 avatars. Exactly “where” that half avatar is, I’d like to know.

For some reason, there may be people who received more or less of a stipend, depending on certain criteria. Not being sure what that criteria is, I’ll just adjust the number of residents that received stipends to ~400,000. This would bring the average stipend payment to avatars to about L$413. Maybe this number is too high or low, but let’s work with it, anyway, since it’s got to be “close”… right?

Now, consider how many people that you interact with on a daily basis. How many of them are NPIoF and how many are actually paying members of Second Life? Remember, you only get a stipend if you are a paying member. Normally, a large percentage of the avatars that you interact with are not paying members. Looking back up at the “Population” graph at the top of the page is when things get a little more interesting.

In January, 919,196 residents logged in. One thing I’d like to point out is that if people are going to pay $9.99 a month to play, they are going to log in more often that people who don’t pay, or NPIoF accounts. Assuming that all of the paying members logged on at least “once” during the month of January, we can see that just over half of the people that logged on were “free” accounts. That should mean that about 45% of the people that you interact with a “paying residents” of SL. Is that close? It’s not close, by far, for me.

About one out of every 10 avatars that I see is actually a paying member. About 10% of the population that I come in contact with actually pays Linden Lab to screw up their first life. Maybe I just hang out in the wrong places, and there are others that experience 90% of the people they come in contact with that are paying residents.

So, my question is, where are these 400,000 avatars? Where are these 400,000 people that continue to pay to be residents of Second Life, rather than flushing their money down the toilet for a better experience?

The “Total Residents” number actually reflects closer to what most users feel about the world, though. Only about 3.3% of the total residents receive stipends. When you see that only about 7.5% of the total residents had actually logged in during the month of January, you realize that not only are users leaving and never coming back, but there may be a large amount of paying residents who never actually log in, any longer, yet thier avatars still collect stipends.

Just look at the “Monthly Spending by Amount” graph, for example. 919,196 residents logged in, in December, but only 341,791 of them actually spent any money. Looking at that graph, do you see the problem? Only 37% of the people that logged in during the month of December spent any money, at all. The majority of them (238,921) spent less than L$5,000 which is about $17.50 USD. Keep in mind that it’s also a good bet that all of the In World Business Owners have “premium” accounts, so they are also collecting stipends. My results are also slightly skewed, since December is the last month we have economic data for, yet January is the last month that we have population data for. My results are actually a little generous.

Now, thinking about economics, for a bit, consider the statement, “the more you make, the more you spend”. Everybody knows that this statement holds true, so we can be sure that those “business owners” are spending money, also. Considering that, let’s subtract them from the total amount of users that spent money in-world, since essentially the transactions between one business owner and another cancel each other out in the “Total Customers Spending Money In-World” because the money had already come from a different source. We are left with 291,113 actual customers spending money in-world. We are left with 52,192 residents that spent more than L$5,000 in-world.

I will ask, again… where are the thousands of residents that are receiving these stipends? Are they still paying for something that they’ll never use again? Maybe these are all accounts that paid for a full year, yet decided somewhere within the year that they wouldn’t be coming back.

I guess I should also note that Linden Lab says this about the economic data that they provide: “While we hope to provide accurate and useful information, please note that we do not guarantee the accuracy of any information…”

If only 3.3% of the total customers I claim were paying customers, I wouldn’t guarantee anything, either.

Malignant Narcissist @ February 3, 2008