State of the Virtual World - Key Metrics, January 2007
In December I posted a number of key metrics for the first time. As part of our effort to drive toward complete transparency and openness, Logan Linden and I have upgraded some of our internal systems to create the Excel Workbook posted here.
Context & Ripple Effects
Questions about how Second Life’s numbers should be interpreted and warnings about investing time and money in virtual worlds made a repeatable metrics release strategically important. Linden Lab is responding by publishing an Excel workbook after upgrading its internal reporting systems.
The move complements the debate around opening Second Life’s software, but targets a different source of trust: outsiders’ ability to inspect operating data rather than code.
First-order effects
- Linden Lab gives residents, investors and commentators a common workbook for evaluating the virtual world’s activity and economy, rather than relying solely on company assertions.
- Logan Linden’s upgraded reporting process turns the December disclosure into a repeatable publication mechanism.
Second-order effects
- Commentators examining participation and spending can benchmark successive releases against the concerns raised in the people-versus-cash debate, increasing pressure on Linden Lab to keep definitions and reporting cadence consistent.
- Virtual-world operators seeking investment or user trust face a clearer comparison point: transparency becomes part of the product’s credibility, not only a communications exercise.
Third-order effects
- If recurring public metrics become standard, virtual-world competition will be judged more on measurable economic and user activity, narrowing the room for opaque growth claims.
- Standardized reporting can shift debate from whether a virtual economy exists to which metrics demonstrate durable participation and value creation.
The trend: Virtual worlds are moving toward operational transparency as public metrics become a prerequisite for evaluating their economies and growth claims.