Second Life economy hits major milestones in Q3: 1 Billion Total User Hours, 1 Billion in User-to-User transactions

In Q3 2009, The Second Life economy reached a significant milestone marking the continued success of Second Life.  See the release here.

Second Life Residents enjoyed strong economic growth in Q3, despite the ongoing impact of the Bot policy on total user hours and concurrency.

Highlights of Q3 include:

• 150M USD in User-to-User Transactions, 54% growth over the same quarter last year
• A new all time high and continuing rapid growth for the Xstreet online marketplace
• 3.1 Billion Voice minutes, up 27% from the same quarter last year

As predicted last Quarter, total user hours and peak concurrency dropped compared to last quarter as a result of the new policies banning bots.

This Quarter, the spotlight section focuses on international usage of Second Life, highlighting the top countries for user hours and User-to-User Transactions.

Let's take a look at the trends and data for Q3 2009, starting with User-to-User transactions.

User-to-User Transactions peak at 150M, up 54% from Q32008 - The total of all transactions in Second Life reached a new high in the quarter.  The sum of all of the transactions in the Second Life economy equaled a total of USD 150 million dollars in Q3 2009. This is 4% growth over the previous quarter and 54% over the same quarter one year ago.

Trading Activity on the LindeX - The volume of exchange on the LindeX, the marketplace for Linden dollars (L$), the Second Life virtual currency, reached USD 29 million in Q3 2009. This is flat compared to the previous quarter and 3% growth over the same quarter a year ago.

Total Xstreet sales reach a new all time high in Q3 2009 - In its third quarter under the Linden Lab banner, XStreet, the web marketplace for Second Life virtual goods, had gross sales of 420M L$, or approximately USD 1.6 million.

This represents 13% growth over the previous quarter and 72% growth over the same quarter one year ago. XStreet remains small by comparison with Second Life overall, at approximately 1% of the USD 150 million Second Life economy in Q3 2009.

User hours reached 118 Million in Q2 2009 - As predicted in the Q2 2009 Economy Blog Post, User Hours declined in Q3 when compared to Q2 2009. This is due to Q3 having three months reflecting a reduction in the number of hours contributed by bots compared to one month in Q2. See the chart below (User Hours by Usage Band) and the SPOTLIGHT of the Q2 2009 Economy Blog post for an explanation of this dynamic.

The Q3 figures show a 6% decline when compared to Q2 2009, and a 15% increase when compared to Q3 2008, and this is directly in line with our forecast for user hours in Q3.

Bot Policies continue to have an impact on user hours - In Q3 2009, the user hours by usage bands showed some summer seasonality. The 300+ hours per month usage band continuing to decline with the enforcement of the policiesaround the usage of scripted agents, aka Bots.  We continue to invest in our ability to track and identify bots, including the ability to set the status of a self-identified scripted agent.

Second Life Residents use 3.1 billion voice minutes in Q3 2009 - Total Voice Minutes grew 27% compared to Q3 2008 and declined 1% compared to Q2 2009. This metric measures all VoIP traffic across all types of voice sessions - Resident-to-Resident calls, group voice chats, and local voice.

Voice minutes remaining flat despite the fewer overall user hours is a function of the ongoing impact of Bots on user hours, which do not show up in the Voice minutes, as Bots generally do not use voice.

Monthly Unique Residents with repeat logins reaches 750K in September - In September 2009, Monthly repeat logins peaked at 750,446. Year to year, September 2009 repeat logins grew 23% from September 2008 repeat logins and are slightly down from the peak of 752K set in May of 2009 before the Bot policy went into effect.

While the number of total unique logins (including users who log in to Second Life only once in a given month) is much higher, we use repeat logins (which captures all unique users with more than one login in a given month) as a metric to track the number of users who are engaged with Second Life.

Peak Concurrent Users hit 77,367 in Q3 - Within the quarter, peak concurrency was steady around the 77K mark. This decline in peak is a function of the new Bot policy. Median concurrency for Q3 2009 was 54K, compared to 61K in Q2 2009.

SPOTLIGHT: International usage of Second Life indicates global nature of the Second Life Economy - This quarter's spotlight explores International. By every measure, it's clear that Second Life is a global phenomenon and that our efforts to invest in the experience for international Residents is paying off. Let's start with the basics - the below chart summarizes the mix between the US and International in Q3 across a variety of metrics.

US Residents account for largest portion of Economy in Q3 - Residents from the US accounted for 37% of User- to- User Transaction volume on a dollar basis, with Italy, Germany, France, the UK, and Japan rounding out the top 5.

Germany, UK, France, Brazil account for 25% of user hours in Q3- Turning to usage, Residents from the US generated 41% of the total user hours in Q3, followed by Germany, the UK, France and Brazil. Note that these numbers are inclusive of Bot activity.

For additional countries, see a complete listing of the countries with their user hours and User-to-User transactions here.

Continued Stability supports the in-world economy - Our work on scalability and stability continued in Q3 2009 (seeUpdates from the Grid and Grid Monitoring and Support). In Q3, total downtime as a percentage of total user hours was 0.15%, our smallest percentage of downtime ever. This was better than Q2 2009 (at 0.24%) and our previous best in Q1 2009 at 0.21%.

We measure total user hours lost to downtime (planned and unplanned) as a percentage of total user hours as a gauge of stability as well as a factor in the growth of the economy. Because this metric includes planned and unplanned downtime, it is key to understanding the total user hours that are available for economic activity in Second Life.

We use this metric because a outage on Sunday at noon when concurrency is at its peak does not have the same impact on the economy as an outage Tuesday night at midnight when concurrency is at its lowest. For those Residents seeking a measure of system uptime independent of the total number of user hours or user hours lost to outages, the system uptime in Q3 was 99.85%.

Resident-owned land expands to reach 1.8B square meters - In Q3 2009 Resident-owned land increased to reach a total of 1.808 billion square meters.  This is 3% growth over Q1 2009 and 6% decline over the same quarter one year ago.

The year-to-year comparison is unfavorable as September and October of 2008 were the high water mark of the explosion in Islands due to the introduction of Open Spaces in June 2008.

Homesteads and Full Regions increase in Q3 - Total Private Regions (Islands) owned by Residents reached 23,566 by the end of Q3 2009. This represents an increase of 3% over the previous quarter end in June of 2009. In Q3, the number of Homesteads grew 6%, the number of Full regions grew 1%, and the number of Open Spaces declined 6%.

A solid Q3 for Residents and for Linden Lab - Overall, it was a solid quarter for Linden Lab and the Second Life economy. Though fewer Bots continue to affect the trajectory of user hour and login growth, user-to-user transactions, voice minutes, and private regions continue to highlight the resilience of the Second Life economy.

Thank you - We owe a thank you to all Second Life Residents - the merchants, creators, builders, educators, enterprises, businesses, estate owners, and others - who helped us reach the 1 Billion User Hours and the 1 Billion in user-to-user transactions.