Growth predictions for Second Life

Last week, I wrote about Second Life’s growing pains with a conclusion that the combination of more users doing more things when online, and staying online longer on each visit, will likely lead to more grid downtime (such as the 2-day outage ten days ago) unless developer Linden Lab is able to scale the infrastructure – the servers and systems – on which Second Life runs to keep pace with and support the virtual world’s continuing growth.

Via GigaGamez, I found a fascinating post by Tristan Louis, an application development VP with financial services group HSBC. Louis’ post is about statistical analysis of Second Life numbers relating to how many users there are, how much money is spent, and other economic data.

Those numbers have attracted a lot of attention in the past few weeks, with strong and varying opinions on their meaning and, even, their validity. There’s also plenty of talk that Second Life hype is now peaking. The hype may well be (although I don’t think so) but overall interest certainly isn’t.

What strikes me in particular about Louis’ number-crunching isn’t so much his analysis of those numbers and the tables of data he presents – which I think Steve Lubetkin will find of interest – it’s his thought-provoking conclusions about member growth:

[…] It looks that, under the most conservative growth rate, we will see 3.5 million users registered and over 600,000 using the service by the end of April 2007. Under a liberal interpretation of the data, those numbers would shift to 9.6 million and just under 7 million. However, in the most likely case, it is probable that there will be 7.2 million users registered with 1.6 million logging in over the previous sixty days.

In October, the number of registered users hit one million. By the end of December, it had passed two million. Today, the number is nearly 2.4 million according to the stats on the Second Life home page.

If this growth rate continues, I’d say the liberal growth figure Louis mentions – 9.6 million by the end of April – looks quite feasible. Mind you, infrastructure problems really will be an issue if downtimes continue – today, for instance, the grid is currently down again [Update @ 12:40 – the grid’s back online as I’m now able to log in to Second Life].

As for another point Louis makes:

[…] this type of growth mirrors some of the growth patterns we’ve seen in the early days of the commercial web and seem to support the contention that LindenLab is going to be a very strong player in the future.

A strong player indeed, one that must surely be on someone’s radar as a nice little acquisition.

Google, perhaps?

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Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

  1. Webomatica

    After logging into second life probably five times now, trying to get a grasp, I’m still a skeptic.

    One question I have about this recent money research done by Tristan Louis: how is the money supply determinied? Is it a finite amount (backed by something like a federal reserve)? Meaning, when you gamble on a slot machine or sit on a chair getting handouts for time spent, is that money created out of thin air, or from the pockets of the creator of that object?

  2. Mike Keliher


    How do SL outages like the recent two-day affair affect organizations like crayon, for example, or other businesses (like Dell) for that matter? I know that businesses don’t have a right, per se, do Second Life access, but if companies are going to put more and more resources into virtual-world presences, these virtual worlds are going to feel more and more pressure to be stable.


  3. neville

    Take a look at the Second Life economy pages, Webomatica. That will give you some ideas re money supply.

    Good questions, Mike. Reality: if the grid’s down and logins are disallowed, that affects everyone, individuals and companies alike. Little you can do about it. The SL terms of use are pretty clear about service availability.

    Wholly agree with your view re pressure on stability. I can see that as being one of the elements in anyone’s speculation on whether Linden Lab is an acquisition target. If they continue with outages and an acquirer could “guarantee” better uptime, I would say that would add to the perceived value of SL.

  4. Prokofy Neva

    I’m glad more accurate reporting is coming out now about SL’s numbers, but it’s funny to see that people still go to the economics statistics page to get that accuracy — and it was there all along, and the Lindens have provided more transparency about their internal numbers than any other similar type of service.

    It’s important to cut through the hype about the numbers (the independent analysts inworld have been estimating only 100,000 to 200,000 ‘real people really logging in for last 30 days’ for awhile because of the churn, where only 10 percent of the new people return within 30 days. Still, it doesn’t matter, because the growth rates are phenomenal, and because of the steep learning curve and the graphics card and DSL line needed, not everybody can turn on the account and keep it working, they come back later.

    You need to be accurate about the “outages” issue, too. Second Life has never been down for a full 24 hours in the two years I’ve been using it nearly daily. When it has outages, they have teams, including people on their international team always on a different time zone, who get right at the problem and they usually get it back up within a four-hour time-frame from my experience. Their regularly scheduled patch is usually under 3 hours once a week. So these aren’t “two days of outages” but more properly “two outages of two hours over two days” or something.

  5. neville

    That economics section is undoubtedly getting more attention as a result of high-profile commentaries during the past few weeks. As you say, Prokofy, the numbers have been there all along although they’re not easily digestible.

    Someone (can’t remember who: do you?) said recently on their blog that a missing aspect in all this morbid fascination with raw numbers is some kind of analysis of the social element, ie, who are the people who make up the raw numbers. A kind of demographic interpretation that I think would add immense value to the overall discussion about Second Life.

    Good point re outages. Maybe like the economic stats, it’s getting more attention so more commentary. I’m a newcomer to SL compared to you (joined at the beginning of 2006) but I’ve been using SL almost daily for the past four months or so (and staying longer on each visit).

    It’s a lot to do with perception where you can’t log in and see posts appearing with others reporting the same issue. Time zone differences contribute, too, so you end up with an overall picture that the grid is offline for longer than it actually is. To be fair to Linden Lab, I find that their communication via their blog to be pretty good on what’s happening.

  6. Tristan Louis

    I doubt Google would be the ones to acquire them as I suspect that Google will introduce some similar functionality in maps in the not to distant future.

    However, Microsoft is probably a likely candidate to acquire SL, as would be Amazon. The reason I think of either of those two companies is that Amazon founder Jeff Bezos and Microsoft CTO Ray Ozzie are already investors in Linden Labs :)

  7. Tristan Louis

    The open-sourcing of the client is a good first step (allowing them to develop a true ecosystem) and I agree that it will lead to more speculation. I suspect, though, that Linden Labs will soon start selling grid servers, which is going to complicate things a bit in terms of getting some actual numbers.

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