Further to my last post, I’ve been doing some calculations based on the figures in M Linden’s “State of the Economy” report.
The survey quoted had 2645 responses, which is said to be 15% of business owners, so the total number of enterprises must be 17633. Of these, 64%, or 11285, report that they generate positive net income – 52% generate up to 20% of their total income from Second Life, 5% generate 20-40%, 2% generate 40-60% and 5% generate 80-100%.
If I was a statistician I could probably use this data, along with the US$100 million cashed out figure, to construct a model that would show how many people were earning the big bucks, but I’m not, so I’ll just engage in some idle speculation.
Let’s generously assume that when M says that “a good part of [the US$100 million goes] into Residents’ pockets”, he means that half of it does. That’s US$50 million split 11285 ways, or an average of US$4430 plus change each. But clearly some people are creaming off more than others. We don’t know what the top 5% (of the whole 17633) are earning, but, for the sake of the argument, let’s say they are fairly modest types, for whom US$50K is a good living, so the 881 of them collectively take home a little over US$44 million, or just about the whole pot. If we lump together the 7% (1234) who are getting 20-60% of their income (nobody seems to get 60-80%) and say they average US$15K, then that’s another US$18.5 million, which leaves less than nothing for the bottom 52%.
Of course statistics can be made to prove anything, especially when you just make up the figures like I have, but I would argue that, if anything, I have been too optimistic (from the point of view of a potential SL entrepreneur) in my assumptions. About a year ago Hamlet Au at New World Notes calculated that land fees added up to US$6 million a month, plus more for land sales, so it seems likely that much more than half of the US$100 million that is cashed out goes straight back to Linden Labs. In a more recent article Hamlet noted that a few of the top-grossing businesses were taking out more than a million US$ annually, so even in the top 881 there must be a heavy skew, with a handful of big earners and a mass of also-rans, and in the lower reaches of the economy the average income can’t be much above double figures.
None of this is necessarily a problem – I’m sure that most business owners see their SL enterprise as a self-financing hobby, and won’t lose too much sleep if it doesn’t make them rich. Linden Labs should perhaps embrace this spirit, instead of continuing to peddle the myth that there is serious money to be made (by people other than themselves that is). Statements like “In the current real-world economic climate, I think the additional income generated from a business in Second Life must be a welcome addition to our Residents’ personal budgets” (from M’s report) look at best ridiculous, and at worst dishonest.
Still, I guess “SL entrepreneur” just about beats making tea at the BBC.
Second Life Shrink 
