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Dec 26, 2006




My overall point was that incremental change is better than no change in reporting subscriber and VW economy data.

Only if the increment is positive, no? What Linden has done is produce more numbers than most companies, but the end result is that the average reader has less information, because they don't even have a very good inventory of what they don't know. There is incremental change, but it is in the direction of less informative.

If I ask Valve how many HL2 users they have, and they tell me to fuck off, I recognize that as an uninformative answer, but if I ask Linden how many SL users they have, and they say "We have 2 million Residents", I am unlikely to recognize that as an uninformative answer.


@Randolfe, I have a hunch you're right, and that the illiquidity issue is the secret bug in the SL economy -- extrapolating that a hundred of X are worth the last sale price of X times 100 is a fairly serious error. But reading this:

assuming that they are all nothing more than not-so-clever disguises for online gambling and debauchery.

put me on another track.

I'm concerned with demographics (news flash), and I've been thinking about the avatar/account ratio. Rosedale has suggested that it is about 1.25 avatars/account on average, but I'm also willing to bet that the average is uninformative, b/c a plot of the avatar count is probably heavily left-weighted and my be a power law distribution. Since most Residents either never log in or login in and bail, a sizable majority have 1 avatar per account, meaning the 1.25 average over the whole system is really a much higher average over a much smaller pool of active accounts.

So your reference to debauchery makes me wonder: are prostitutes in SL mainly street walkers or call girls? Because if its the latter (which is to say if patrons book in advance), having a high avatar-to-account ratio in that line of work would be as advantageous as having many scripts but few women working the phone sex lines.


Found the link I wanted to put in just to illustrate we we of the "SL Blogosphere" were on to this long before Clay Shirky -- here's a post from *October 25, 2006* for God's sake:

"Believing the Fake Numbers"

Interesting to compare and contrast what Tateru said back *then* about the fake numbers, more trustingly, and even counted on them to so dilute the "known" people that new people coming in would never know who Prokofy is! Hehe. I'll bet.

And in the Herald, noting that we surely had one million minus one, after failed presidential candidate Mark Warner dropped out:


There's more, but I'll spare you.



On the liquidity issue and to your original point:

I read that Linden had with SecondLife created something at least an order of magnitude larger than it turned out to be in reality. I first read about the SL burgeoning economy in The Economist, which I generally trust to get quant stuff right.

But, playing around with some hedge fund experimental money -- not much more than $10K -- I discovered that SL is really pretty small. That amount of real money can impact spot exchange rates by upwards of 50% in the "open market" exchanges. On the Lindex it requires all kinds of penance be paid to LL. In actuality, a small handful of large operators comprise nearly all material transactions. The thousands of micropayments are not signifcant and have no impact on exchange rates whatsoever. Further the major operators don't exchange L$ for USD in an open spot market, but by a more quasi-fixed exchange regime, probably conclusively. And why not, LL is effectively acting as irresponsible central banker of a floating-fixed peg regime.

So you can make the $1m USD at least one of these operators claims, but you're not making it by and large through in-game generated economic activity, but instead by the exchange mechanism. The true parity value of their profits in game are far below their potential realized USD exchange value.

This cannot go on forever; probably not even all that much longer.

As a final epitaph to the experiment, we tried to do some bets on the direction of the above logic in-game. This resulted generally in either (a) breaking the in-game bank when their moment of liquidity came due or (b) getting ripped off by in-game counter-parties when they found out they actually didn't know how to run a bank.

I thought about starting my own bank, paying 100X the prevailing in-game 'interest rates', and still making ludicrous USD arbitrage profits by keeping reserves in real world dollars. But the exchanges won't support this (no liquidity) and counterparty risk is too great in game (no accountability). No wonder the big operators run their own exchange. Participate at your own peril.

This doesn't sound like an "economy" to me at all, so much as a ponzi scheme.



I'm certainly not questioning that you all were here first. Everything I know about MMOs and VWs I've learned from Terra Nova or from the people who write for it.

But if you want credit for doing the work, you also have to take credit for the results, and the figures you were complaining about got worse on your watch. There are many more people today who wrongly believe that SL has a teeming population that is growing by leaps and bounds than there were in the summer of 2006.

So either you don't care what the general public thinks, at which point we are actually working on different problems despite the similarity of our demographic concerns, or you do care what the general public thinks, at which point the previous strategy was ineffective, and you should welcome another pair of hands.



I've been watching this debate progress for a while and thought I'd weigh in.

Your core accusations are both serious and presumably easily addressed:
1. Define exactly what #'s you want explained by LL. They've always been pretty obsessively transparent and my guess is that they'll continue to do so.
2. Keep chastising the press

What I'm observing however is that you've thrown down a serious gauntlet by calling their competence and credibility into question. Hence they're probably not falling all over themselves to answer your questions. Additionally, it's incited a debate/discussion amongst a legion of us, none of whom is really equipped with the data needed to settle the matter. Most irritating, the target keeps shifting because the core question of "What are the real #'s and how are they calculated?" has not been squared away.

In this secondary realm, you've speculated that the #’s are inflated by lots of Looky-Loo’s and are not in-line with industry standard reporting metrics. This may or may not be true, but it raises a really interesting question: “What Industry Standard Metrics Should Be Used?”.

Second Life lies at the union of web-based social sites and MMOG’s but the metrics for each of these don’t quite work for it. The implication being made is that there is some sort of deliberate sleight of hand being performed on the #’s. The truth, I think, is that it’s just plain hard to figure out what #’s/standards to apply. Second Life is NOT an advertising supported website and therefore Commscore #’s and the like are not particularly relevant. On the other end of the spectrum, the #’s typically reported by makers of MMOG’s radically undervalue Second Life’s population because they only reflect paying users. While this appears to be level-headed, it’s also offbase because the small percentage of paying “landowners” in Second Life are able to pay very high monthly fees because those fees are offset by their sales of virtual goods to “non-paying” users.

For those of us who have been really into SL for the last few years, it all seems a little moot. That is to say, we don't believe there's any deliberate manipulation going on but would certainly appreciate clarification/definition of the #'s from Linden Lab. But whether they are clarified, revised or unchanged, my feeling is that the core question is really a different one.

It's that SL lies at the intersection of two seperate fields: gaming and social software. For the past few years, the game crowd has looked at it funny for reasons ranging from bad graphics to lack of a goal or originality or mainstream appeal. Now the social software folks are weighing in with a seperate set of concerns.

This #'s thing will work itself out and then we'll move to the larger implied set of questions which will probably focus on whether SL will have mainstream appeal.


>But if you want credit for doing the work, you also have to take credit for the results, and the figures you were complaining about got worse on your watch

This is truly preposterous -- truly.

We don't run Linden Lab or have influence over it -- at least people like me don't, and even their special feted ones only influence them by anticipating what they want 5 minutes before they articulate it.

I can't control their pitches to the media.

When Fortune Magazine and New York Times interviewed me in the last year, I gave them all kinds of statements and back-up materials. For example, on the "Anshe million" stuff I gave them what was a much more realistic budget and ROI for buying land off the action and selling or developing it. For the Times, I also questioned the numbers months ago. But they didn't use this material or these quotes. They picked out whatever fit with their own yarn. The media has a narrative -- it's hard to derail it.

And frankly it's a narrative *you all* tought them, with your 7 million WoW subscribers (or is it 6 million? I see 6 million more and more nowadays and hear the urban legend that they expelled 1 million Chinese gold farmers lol).

I would welcome another pair of hands in debunking the numbers if they came with a pair of ears that would hear and acknowledge what we keep giving you again and again and again, and you keep ignoring or not accepting. I found yet another independent source from me, Anshe, or anyone else mentioned so far:
Wayfinder Wishbringer, the elf leader who left SL in a huff recently:

I'm sorry that Chinese virtual millionairesses, transgendered landlords, elves -- they don't have that compelling clout with the media or the blogosphere and the eggheads that you have. To blame us for not getting in the mainstream media is absurd.

Long after you lose interest in this story and go back to your lathe commenting on social software or whatever, we will still be dealing with the fake numbers and debunking them. And more importantly, recognizing that there is still growth and significant growth and still something totally revolutionary here -- which numbers cannot quantify in the way that you wish. It's not something you wish to concede or wish to take the same enthusiastic approach to. That's ok, but you're adding nothing useful to the discussion at this point, and not either providing a real template that we could use to confront LL on their phony numbers, or supplying some scale that you would find acceptable. You've just never acknowledged -- likely out of some ideological allergy -- that buying land and having a paid account is a significant number we all need to watch. So there's an ideological obstacle right there to having any kind of cooperation with you -- you won't accept land purchase as a metric (and in that you are ideologically akin to the Lindens, who, despite selling land, have a leftist queasiness about it and won't include land sales as a legitimate business activity).

If the press were to do YOUR bidding (they won't do ours) and begin to say "Second Life has increased from 10,000 to 100,000 in the 3 years it has been open to the public" -- do you REALLY think that it won't get in Time magazine anymore? Do you REALLY think it won't attract looky-loos? Do you REALLY think IBM then won't buy islands in it?

Because those ARE the facts. Second Life increased from 10,000 to 100,000 users who regularly log on daily within 3 years. No millions here. But very significant growth.

I think Reuben has identified one of the nettles here. The gaming crowd looks at SL askance because there's no game, and the people in it are so disrespectful to the illustrious MUD/MOO thingie history. Now the social software peeps are all bent out of shape because here's a social software where it's hard to log on and socialize and also has a good bit of anti-social stuff in it. All makes sense.

So, meh..."she's my daughter AND my sister" *slap* or else he's "an errand boy sent by grocery clerks who've come to collect the bill".


I have been watching our own stats recently. We have over 1000 IBMers as part of eightbar. In that 1000 there are only 4 alts on the list. Of those 1000 a good few will have alts, but its no point having an alt and telling everyone is it :-)
If I had a virtual world running inside the corporate firewall we would instantly push 300,000 users the sam eway we do with sametime instant messaging and our various intranet apps.
The big numbers will come, the really really important piece is that the seed has been planted. SL is not a game, and people can explore new ways of communicating and doing business.
I wonder how many people Tim Berners-Lee had on day 1? Its taken over 10 years of serious business interest and community involvement to get us to where we are today with the web. So whats goign to happen with virtual worlds in the next 7 years (assuming we take the Before SL/LL date as the beginning?)
Yes we have all had the concepts and ideas, and some prototypes before, but this cycle of invention has taken this somewhere further.
It is good to question it, but I have yet to get very many real reasons to not regard this phase as important and influential whatever the number.


"My suspicion is that the numbers make SL subscribers nervous because a lot of them are secretly afraid of an "Earth and Beyond" or "Asheron's Call 2" scenario."

Ding, ding, ding! We have a winner!

I've been scratching my head why so many Terra Nova readers/authors are shooting the messenger here. My only guess is that deep down they see Clay as a harbinger of doom for their beloved pet VW. What else will the Terra Nova pseduo-intellectual crowd circle-jerk to if Second Life bites the dust? Worried that all your proclaimations of a future "metaverse" will amount to the value of the Linden dollar when the SL servers shut down?

You people need to wake the hell up. Linden Labs is a scourge on the virtual world community and Second Life a steaming pile of crap from its bowels. The sooner the mainstream press gets the facts, the sooner we can all move on to something that actually has promise and value.



And frankly it's a narrative *you all* tought them, with your 7 million WoW subscribers

You must have me confused with someone else. I have never written about WoW, or any other game world. I care about the SL numbers precisely because it isn't a game.

Long after you lose interest in this story and go back to your lathe commenting on social software or whatever, we will still be dealing with the fake numbers and debunking them.

I'm sure you will. You just aren't very good at it.

In less than a month, I've gotten pick up from C|Net, CNN, CNBC, and NPR. You can debunk all you like, but until you start combating the bad numbers where the press is actually reporting them, none of the debunking you are doing will have much effect.


@Clay: That's *quite* revealing. So being "good" at debunking the numbers is, to you, a media game -- about banging the right cheap drum in the right cheap venue. Good luck with that, but please don't mistake it for what most folks around here would consider a good effort to understand SL and its numbers. That is an effort that many here have tried to include you in, and with (to be frank) more graciousness, courteousness, and good will (okay, maybe not Prok ;-) ), than your tone and apparent degree of commitment to honest inquiry would merit, in my opinion. It is a testament to what TN is that an enormous amount of collaborative and productive discussion *and work* have sprung forth about this, to sort out the useful from the not useful data, and to build robust and nuanced metrics. I'm sorry if it has rather too much substance for your style.


@Clay - "In less than a month, I've gotten pick up from C|Net, CNN, CNBC, and NPR.

In addition to Thomas' comments, I'd like to add my congratulations. You've also proven that the media will listen to anyone - including a) those who admit they aren't really involved with something but will nonetheless speak as an authority on that particular topic, and b) those who themselves don't dig deep enough to get the full picture before they accuse others of exactly that same failing.

Bravo. You certainly do set a shining example of how the media operates.

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