Second Life's Slide? Hard to Tell Yet...

Filed in archive Virtual Worlds on June 25, 2010

© John E. Lester


The official line is that Linden Labs and their virtual world brain child, Second Life, are growing and healthy. They're also laying off almost a third of their staff - cutting customer suppose workers so they can outsource customer support, and closing their software development office in Singapore.

If those two statements (the company is health and growing, and it's laying off workers) seem contradictory to you, well you're not alone. But according to the Wall Street Journal, Linden Labs is restructuring in order to focus more completely it's core business - helping residents of it's Second Life virtual world sell virtual goods and services to each other.

According to VentureBeat, virtual transactions in Second Life are up 30% Q-on-Q for the first quarter of 2010.

Many analysts have talked about how the virtual economy has continued to grow despite the Recession. Second Life often gets referred to as a barometer of sorts for the larger virtual economy. So layoffs at Linden Labs make some observers reconsider their assessment of the strength of the virtual economy.

I was pleasantly surprised to stumble across some revealing figures about the potential to make money in Second Life. The virtual world's population is hard to measure. The most common figures are 18 million accounts and about eight million active users. At any given moment almost 40 thousand people are playing Second Life. Given that context, Linden Lab said that 64 thousand people made a profit in Second Life back in February of last year. Of those, about 60% made less than ten bucks in real dollars. Some 233 people made $5K or more, and a handful made a million dollars or more (in real money).

Unless things have changed a lot in the last year, Second Life is a place to have fun (not to get rich).