Linden Lab business as usual

Linden Lab business as usual

SL private regions July 2014Reviewing the contents of it happened to me to read a few pieces  of about three years ago or in which I was referring to as the peak of sim was now exhausted and the “islands” of Linden Lab virtual worlds shoud be under 24 thousand, mark already passed in 2009. Well, three years later, the number of private sim maintained online on the “grid” of Second Life declined further and now for Tyche Shepard (who whit his blog constantly monitors the numbers of SL) at the date of July 27, had slipped to 18,988, which is more and more distant from the historical high of 26,363 private sim touched October 19, 2008. Which has generated some noise among the small but fierce community of fans of the Californian virtual world.

It must be said that the total number of sim maintained online in Second Life (therefore including those owned by Linden Lab, and not leased to any private player) remains close to 26 thousand (sims have slipped to 25,980 on July 27 while the previous week were still at 26,003) compared to a high of 32,988 sims touched June 13, 2010. Seen in this light, the numbers do not say much, but as a matter of fact Second Life (a “game” for creative and experienced users, since that Linden Lab has always considered in this way his virtual world, for over 11 years on the market) has returned to the levels of 2008. With some differences.

In 2008, the media hype had just exploded, now it is not even a pale echo. In 2008 (to be true in the Spring of 2009, since data are not available prior to) the domestic economy of Second Life recorded on average $ 2.4 million per day exchanges between residents, now worth about 1.4 million. In 2008 (to be true at the beginning of December 2009, since even these data are not available prior to) the mean “concurrency” was between 45 and 60 thousand users per day, now is between 40 and 45 thousand users per day. Making business with Second Life, if you are not Linden Lab, is clearly more difficult, but the hard core of loyal users (which is estimated at 150 thousand users, in the absence of any data from some part of Linden Lab that since October 2010, no longer publishes statistics on the logins of the last 60 days) is more than sufficient to ensure accounts in profit for the company for some time, which probably was not true in 2008.

Bob KominIf you take a look at the LinkedIn profile of Bob Komin (ex Coo an Cfo of Linden Lab, who leaved in August 2012), you can see, for example, that after the drastic treatment (including shots of layoffs) of Komin only in October 2010 the Californian company “became profitable and cash flow positive each month in October 2010 with over 20% adjusted operating margin and over 30% Ebitda”, having registered in 2011 the “highest cash generation in 10-year company history”. The reason is easy to understand: while revenues are still estimated at around $ 4 million per month (taking a simple average of of current prices ranging from $ 345 per month for a “skill gaming region” to $ 75 a month for an “openspace”), by approximately $ 5 million per month four years ago, once cut costs parameterised to expectations of a “mass market” developme of virtual worlds (never happened at least for “senior” users as those of Second Life), budgets have turned positive.

At the expense as known were mainly employees (more than halved from 300 to the current 150 or so), but is likely to be a substantial savings come from reducing the number of servers required to maintain online the entire grid (still in 2011 the famous blogger Tateru Nino talked about 31,2150 servers, including even those in the number required for the maintenance of inventories), also because updating the same servers from the first to the current version (in theory class 6, but the numbering has been disposed of) the number of sims that can be hosted on each server (which remains variable) should be increased, on average, from the initial 3 to 8 sims for server and then you should not go beyond  3,250-3,500 servers for the sims, to which must be added a few hundreds / thousands of servers for inventories, given that the number of those who register in Second Life is stable around a little more than 13 thousand per day, with a total of members who now has 39 million superstate.

While waiting for the elusive “Second Life 2officially announced July 11 with a note that states that Linden Lab is hiring new staff for the specific purpose of creating “a new virtual world (that) will go far beyond what is possible with Second Life”, world that will still maintain some specific elements of Second Life as “users’ Linden Dollar balances, identities, and social connections” and probably “more modern content from Second Life, such as meshes”, Linden Lab seems to have sufficient resources to continue the maintenance and further a slight improvement of its most famous creation.

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