Monday, 14 October 2013

Second Life's Irreversible Downturn

In 2007, warning signs was seen of an impending major problem with the banking indistry due to unsafe mortgages starting to pile up.

In 2008... the whole system crashed.

The effects of that crash are still being felt to this day in the real world, real wages are not rising, prices of certain things are at an all time high, the banks sucked up vast amounts of tax payers money to keep them afloat, the world, in many ways, became a little bit more darker.

Everyone, everywhere felt this.  The gaming industry was hit (over 40 game design studios closed in 2008/9), the entertainment industry in general felt the hit.  However, Second Life didn't.

Folks tightened up their belts, they didn't go on those planned vacations, they cut back on the more extravagant luxuries and spent more time socializing on sites like facebook.  It was no surprise that facebooks meteoric rise to fame kicked in during 2008.  It was 2008 which made the Internet as a whole the last bastion of a "Vacation Place" for folks who tightened their belts.

2008, 2009 and 2010 seen a rise in the amount of regions being bought within Second Life, it was almost as if a second wind had caught up with SL as more and more people signed up.  The 2008 generation hit SL.  I'm one of those hundreds of thousands of people in Second Life who made their account in 2008.  Either just before, or very soon after the news of that crash became public.  I'm one of the many, who came to Second Life because real life money was becoming tight, I'm one of the many who used Second Life as my real world "Vacation Spot".

For several years, 2008 to the beginning of 2011, Second Life seen a massive rise in income.  Many people decided to buy a region, or spend small amounts of money on a regular basis in world.  It's the reason the 2008 crash never affected SL.

I want to direct people to this thread in the SL Universe Forum... http://www.sluniverse.com/php/vb/virtual-business/8523-new-sl-sims-past-week.html

It's a forum thread crated by Tyche Shepherd.  Tyche has been running that thread since 2008, roughly every 2 weeks a post is made showing new regions that have shown up on the grid.  Its is now into a multitude of pages but you can see the rough pattern.  From 2008 to 2010... SL was continuously growing.

From roughly the end of 2011... SL has been CONTINUOUSLY on a downturn.

What has been causing this?

Well... many things.  The main one being that the effects of the 2008 crash have started to ease.  Some folks are finding they can go on those vacations, that they can spend a little bit more on those luxuries, that they can ditch SL and go to RL stuff.  It's also got a lot to do with other sections of the SL userbase now struggling with keeping up payments on their region they got in 2008/9.  The prices of the regions in Second Life has kept at the same rate of 295 USD a month INCLUDING a 1000USD "set up fee".

This worked in 2008/9.  People at that time was willing to pay, they didn't go on vacation, they sppent more time at their home, they wanted to spend money a bit more wisely due to the economic downturn that was going on.  The downturn shattered Europe, places like Greece and Italy found themselves up to their necks in debt and the government struggled to keep above water... heck Greece is still struggling now.  The countries which rely on tourism to bring in fresh money is still suffering to this day because people are not willing to risk their safety to go on vacation to a country which may implode any day.

That's why in 2008/9 SL seen a massive boom in land sales...and that's why SL is now seeing the delayed effect of that 2008 economic crash.

If you go to about page 52 of that thread you will land in the middle of 2011.  Tracking that thread onwards from that date you will see the steady decline of 2011, turning into the full out crash which has been happening since 2012 and is continuing to this day.  Linden Lab has been continuously losing an average of 30 regions per week, consistently since the beginning of 2012.

At its peak, Linden Lab had roughly 32000 regions on the grid, a mix of Mainland, Private Estates and Homesteads.  That number is now down to roughly 26000.  That loss of 7000 regions has all happened since the back end of 2011, has continued through 2012 and is still going on now.

Second Life is now in an irreversible downturn, it will continue to be in a downturn for as long as Linden Lab continue to ignore its user base, continue to bury its head in the sand to the lack of consumer care, lack of customer support and lack of any real future plans.

Linden Lab has lost its way...actually it can be argued that they never had a path to follow from the beginning.  The Lab as a company has been blindly stumbling around for the past 10 years with no clue as to what they are doing or what they can potentially do.

I remember back when Rod Humble was made CEO of Linden Lab, I thought to myself "Now the lab will get direction".  Instead Rod Humble is the FIRST CEO of Linden Lab to oversee a continued, unhalting downturn of regions.  To give you folks a monetary value.. 7000 regions at 295 USD a month comes to a monthly loss of just over two million US dollars.

Why is Rod Humble still the CEO?  Why has Rod not taken the bull by the horn and force Linden Lab to actually do the one thing which the Lab has never been able to do for the past 10 years...

WHY HASN'T ROD HUMBLE ACTIVELY MARKETED AND ADVERTISED SECOND LIFE IN A MEANINGFUL WAY?

While SL has been dying, what has Rod and the hapless idiots at the Lab beein doing?  They have been making pointless mobile device games which sell for a week and then drop off into obscurity.  They have been sitting back ignoring the staggering downturn of SL as they CONTINUE to make pointless kiddy games which have shown no sign at all of actually selling for more than a month before dropping off sales charts.  They continue to ignore the SL downturn whilst trying to make a new "cash cow" for Linden Lab.

I honestly believe, and this belief was strengthened after the recent change of the TOS, I honestly believe that Linden Lab will sell off Second Life as a platform to a bigger company by the end of 2014.  I believe that the reason that Rod Humble and the Lab have not been caring about the gradual steep downturn is that they KNOW they will be selling off the platform by the end of next year.

That is the only explanation there possibly can be thjat Rod Humble has been pushing on making these other games for The Lab as an income for the eventual sell off of Second Life as a platform.  If Linden Lab actually CARED about the loss of 7000 regions, if they cared about the loss of TWO MILLION US Dollars a month, they would be doing something right now, they would have started doing something a YEAR ago...

...but they have not.

Linden Lab will sell off Second Life as a platform to another company by the end of 2014.  They are showing the signs of a company who are getting ready to sell of of the platform or at least license the whole thing off to another company.

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