In-World Economy Tanks? Part 2

Tuesday, September 2, 2008 Tuesday, September 02, 2008

In part one of this series, I proposed the theory that our in-world economy is having a few issues. This is reflected by lower revenues by seen by at least myself, and evidence from multiple other in-world businesses. Recently New World Notes ran a poll that indicated a slight majority of businesses were experiencing a downturn. In a healthy economy, a large majority of businesses should be expanding, not shrinking or remaining stable. Let’s try to identify what could be done about it.

The most basic measure of the economy is how much money is being spent. The formula would be: (Number of residents)  X (Average Spend) = Total Spend. It comes down to this: if that is our goal is to increase the economic activity, there must be more residents and those residents must spend more money. But how can we do this? Solutions must address either the number of residents or the amount of spend. Here’s some ideas to consider:

  • Increase machine accessibility. Windlight requires more hardware than many people seem to be able to provide. Solution: a dumbed-down viewer that runs smoothly, but displays less graphics fidelity. Is this as simple as setting graphics settings to less power-hungry defaults? Possibly. The Low-Mid-High-Ultra graphics slider is a good step, but obviously it is not nearly enough to counteract the tribulations of users who appear to be avoiding SL. I still encounter people who insist on running older viewers and others who claim they “don’t have a good enough PC”. Meanwhile, other virtual worlds have astonishingly low fidelity graphics (even comical 2D in some cases) and yet they have very high participation. Can’t we share our virtual world with those running viewers that can’t see quite as well? Instead of shutting out those users completely, why not let them “graduate” to better viewers over time? If they can use SL even in a simpler mode they might join SL instead of joining other simpler virtual worlds (and never trying SL).
  • Reduce Viewer Complexity. While we’re talking about the viewer, I have to say that the sheer complexity of the interface certainly scares off a large segment of the population. Just as people can survive without fancy graphics, they can surely survive without most of the controls. Think about it: how many buttons, knobs, sliders, menus and selections are available? Dozens? Hundreds? Thousands? How many of these do you Actually Use in normal activities? Very few, unless you are a content creator. For most users, just hide them. Users truly interested in them can turn them on when they are sufficiently competent, while the majority of new users would be less inclined to give up. By the way, a significant new initiative has started up, independent of Linden Lab, to address this:, which I hope will either solve or provoke a good answer to this important issue.
  • Rectify Asset Server Issues. As many regularly online residents may have noticed, these problems and associated official bulletins cause residents to avoid transactions, including purchases. Not good for business. The obvious solution here is to repair the asset server software and/or hardware configuration so that it is has consistent and trustworthy reliability. I don’t know the specifics of the technical issues, but Google and others have proven that it is quite possible to implement massively scalable real-time databases. If they can do, so can Linden Lab, and perhaps even with the same software.
  • Improve Real World Economic Conditions. Off-world, recession in the US and other countries looms, shrinking the available capital to spend in-world. There’s not much that can be done to counteract this issue, other than waiting. Lowering the price of entry to the virtual world and raising the overall attractiveness of SL so that more people try it out in spite of economic conditions could help, but I think that's been done already: free accounts are available. Also, the ongoing virtual population is still far lower than the real world, and there are many people who could take part even in bad economic conditions.
  • Reduce Tier. For all the chatter about the price of land, I believe the key factor in the economy is monthly tier. A business must produce more revenue than tier, every month or it becomes nonviable. The tier price affects everyone, even those who do not own land, since ultimately the tier is passed on to all renters and shoppers. I’ve observed businesses that operate at or near break-even levels, and these ventures are highly susceptible to variances in revenue. In other words, those businesses fail if their revenue happens to drop too far below tier. The solution: lower the tier, particularly on islands. Yes, it’s a major source of revenue for Linden Labs, but it could also be the major barrier to economic growth. Imagine how many businesses might not have failed if the tier were say, half of the current rates.
Will any of this come to pass? I have no idea, but I certainly hope some of it does. Especially reduced tier.


Peter Stindberg said...

I'm still accessing the grid with my Nicholaz BE-v viewer based on SL 1.18.5. This viewer is fast and rock solid, almost never crashing. Yeah, I miss a few things - the most prominant being the Windlight and the glow feature. But to be honest, glow is mostly used inexpertly anyways, and I trade it in for a stable and smooth experience.

Even my Spacenavigator did not convince me enough to permanentnly switch to 1.20.x - unless Nicholaz will finally make a new verson.

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