Virtual Worlds in Recession?

Michael Pincher asked if the credit crunch/recession was going on in Second Life.

As a regular user and fan of Second Life, I can offer some sort of answer here – but with everything that is to do with Second Life ( SL), the answer is not as straight forward as it could be.

Overall, creators are reporting that there has been a smallish drop in sales of their products, but these are in the three preceding months – summer in the Northern Hemisphere, and traditionally a time when most people aren’t online, they are off enjoying the sun.

If sales continue to go down, I will be surprised – when there is belt tightening, people spend less on going out and entertainment – $30 USD will buy you a fair whack of L$’s (the Second life currency) – around L$8000. A good piece of clothing in Second Life will cost around L$200-350, and a small piece of virtual land will cost around L$2500 for a 512sqm plot. So there is a fair amount of play in much less than the price of your average night out, and USD$30/£18, can give a fair amount of retail therapy, to assuage the need to buy big value items in real life. The Linden Dollar is a form of currency, as it can be transferred in and out of the virtual world.

Linden Lab has seen some rough waters lately, with some new pricing levels that have attracted widespread criticism from its userbase, along with a marked and trend breaking slowdown and even reverse in virtual land and island sales. The stats do not make pretty reading for the past couple of months.

However, the number of users logging into SL has increased – signups to the service and at around 15k per day, and the users concurrently online are regularly at 75k plus.

I think once the recession starts to hit in real life, people will take refuge in SL as a way of escaping their woes, and also as a form of entertainment that is far cheaper than a night down the pub.