So how's business?

Every now and then people start talking about the failing economy in Second Life. I always take these discussions with a pinch of salt because someone else will appear eventually to say business is booming. We are living in tough economic conditions in RL and some of this is bound to manifest itself within Second Life.

However recently a few things have been troubling me. One is a mall that I've rented at for about two years, this week I decided to throw the towel in there. This is disappointing for a few reasons but mainly because I have a fondness for this mall because it was the first place I tried setting up shop. Currently the mall is awash with rental boxes, this has been going on for some time, the demise of this mall started with the bot ban.

Until the bot ban the mall had huge traffic, I thought this traffic came from a ballroom, being a place I went to early on in my Second Life, I didn't thik to check for bots and I didn't check for bots at any point. However since the bot ban traffic has plummeted and so have sales. This exemplifies why people have used bots and camping to inflate traffic, they both clearly increase visibility to consumers. Now an oft made argument against bots and traffic gaming has been that it's only used by those who have inferior products, but this mall had some very popular designers renting there at one stage, so that theory doesn''t hold water here.

Now fair's fair I can hear you say, the traffic the mall generated has gone somewhere else, or it should have gone somewhere else, but where that something else is we'll never know.

Another mall, where I've only been renting for a short while, will be shortly closing due to a lack of traffic. As far as I know this mall never used traffic manipulation technqiues, they too have had well known designers selling their wares but they note that there is an economic downturn. Whether there is, again, who knows. Even when LL publish their stats we don't know how certain sectors are doing. I mean we get told how much is being spent but we don't know if it's retail, land, event management, so it's pretty much guess work when people try and tell you how certain sectors are doing.

However it's not all doom and gloom, I was talking to someone recently whom asked me if I have a full sim for rent,  they're looking for a full sim due to their improved income. L$30,000 in three days they tell me. I point out that a full sim will require them to be making profits of over L$80,000 a month to break even but he's convinced it's worth pursuing due to his growth. This guy is excited about his prospects and laughed when I mentioned some are having a tough time of it lately. He sees no sign of a recession, indeed he tells me he's seen growth for several months now and tells me he started with a small plot and has gradually grown but is outgrowing his current home.

This story isn't unfamiliar to me. I myself lost a tenant a few weeks ago, she had rented some mainland plots from me but her business grew and grew until she wanted to rent half a sim, something I couldn't offer her. I was obviously disappointed to see her go but I was happy that she had managed to grow her business, especially in these difficult RL times. There are businesses inworld who are booming and I'm sure there are plenty of them.

The RL economic factors simply cannot be ignored, they will undoubtedly have some impact on the inworld economy. There is an argument that in times of economic downturn people turn to low cost entertainment and Second Life can fit that bill, but to people who invest a bit more, it's not low cost entertainment, not to someone running a store on a full sim. If the store owner sees a downturn it's an expensive entertainment activity.

So why do some places prosper whilst others struggle? How long is a piece of string? I mean, we'll not get the answer to this but the places I see prospering aren't catering to the mainstream, they are more niche. Therefore the mainstream market could just be saturated. Maybe there are too many malls, too many clubs and this is all just a natural adjustment. Maybe some places haven't improved since 2006 and now look dated. There are going to be a variety of reasons as to why these things are happening, but this isn't new, I've seen people bemoaning the economy several times before.

Rather than quitting completely people should consider downsizing, they should also consider strategic alliances. Hey if two store owners aren't doing so well, why not merge your stores? Sometimes you need to take one step backwards before you can move forward again.

I must admit that I am somewhat bemused by Linden Lab's strange advertising technique, to put it simply, they don't advertise. Does anyone know why Linden Lab don't advertise Second Life to the general public?

However the sky doesn't seem to be falling from where I'm sat, these are tough times but we don't seem to be heading straight for an iceberg.