Second Life Grows Transactions 65%Year-Over-Year

Yesterday Linden Lab released Second Life performance data for Q1 2009, announcing that user-to-user transactions were up 65% from Q1 2008. In addition, users logged 124 million hours in Second Life (up 42% from Q1 2008) with 88,200 peak concurrent users (up 33% from Q1 2008). This is a new record for both total user hours and peak concurrency. User buying and selling of the Linden virtual currency was also up 9% according to Second Life's LindeX, which handled $28 million during the quarter. 

While this would seem to indicate Second Life was still growing, Linden did report that overall square meters of resident-owned Land in their virtual world decreased 5% during the quarter. Linden attributes this decrease to consolidation of Open Land holdings into different types of areas called Homesteads and Regions. The consolidation appears to be a move to help Linden reduce overhead costs for maintaining Second Life.

There are two clear things to take away from these numbers and they paint an unusual picture of where Second Life is right now as a venture. People spent record amounts of time in Second Life in Q1 2009. Like many other virtual worlds, Second Life seems to reaping the benefits of consumers looking for lower-cost entertainment options online.

A potential problem lies in the fact that it's not yet clear if this influx of new users is spending significant amount of money on Second Life. For instance, some observers speculate that the amount of user-to-user transactions reported could easily be inflated by users making transactions to their own XStreet SL accounts. Linden has possibly made a lot less off of its Q1 growth in users than a reasonable observer might be inclined to think at first glance. 

However, Linden, which is privately held, has long said that it's solidly profitable, even if certain elements of growth may not be as strong in reality as on paper.  We've followed up with Linden, though, to see if there's any word on the practical effects of the growth for the company and Second Life.

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