Second Life monetizing at 5x higher than other casual MMOGs June 10, 2008Posted by jeremyliew in business models, games, games 2.0, gaming.
Yesterday I pulled together some analysis of monetization rates for casual MMOGs. In my analysis I estimated that Second Life was making around $1.4m/month in revenue from premium memberships and selling Linden Dollars. A number of people noted in comments that the majority of Second Life’s revenue came from land maintenance fees that I had left out of my analysis, and that Second Life’s revenue was actually far higher.
In fact last month James Au estimated that Second Life’s total revenue is around $8m/month:
There’s currently 14,597 islands, and they make an average of $1200 for the sale of each; they charge $295 per island per month for land use fees. (I say average, as island pricing has fluctuated recently.) So about $17,500,000 for the island sales, but that’s a one-time fee.
Recurring income is around $4 million/month in island land use fees. The Lindens also charge land fees on the cheaper, Linden-controlled mainland continents, and that’s maybe 30-40% of the total land mass, so say $2 million/month more. Add the island sales and commission revenue from L$/US$ transactions, plus the 92,000 Premium account holders paying $10 per month for another $2 million total a month. All that tabulated, $8 million a month gross seems like a safe (if very sloppy) guess.
I’m not a Second Lifer, and James was a long time embedded reporter in Second Life, so I’m inclined to take his estimate over mine. Another estimate from secondlifepros.com comes in to roughly the same place.
Based on this higher revenue number and the 860k residents logged in over the last 30 days, Second Life is monetizing at around $9.30 per user per month, much higher than the other casual worlds I talked about yesterday, but in band for some of the more “hardcore” free to play MMOGs that companies such as Acclaim, Aeria, OutSpark, K2 Networks and IGG are importing.