Going over the Second Life metrics that are available to us, it seems clear that this virtual environment has reached one of its most significant growth plateaus, and one that it doesn't seem to be able to push past. User-to-user transactions, active users, weekly/monthly logins, all remain very flat.

All the while, more than 9,000 new user accounts are created on the service every day, though the retention rates appear to be extraordinarily low, making up only for what appears to be an almost negligible attrition in the medium- and long-term user-base.

That user-base, admittedly, appears to bring in the bulk of Linden Lab's revenue. While there's a large number of organizations and educational institutions using Second Life, their contribution to Linden Lab's overall revenue seems to be quite minor.

With growth pretty much stalled for two quarters or more, should Linden Lab even be paying attention to the existing users, who largely seem to exist as self-sufficient communities unfazed by the actions of the Lab, or should the Lab be bending its energies on courting and converting new users with little regard for the existing population?

Overall, the smart money for continued growth seems to be with a new-user focus, and the evidence suggests that this is essentially the plan that the Lab is following. Dealing with ad-farms, adult-content and traffic gaming aren't strategies that are focused on the midbie and oldbie population. Any benefits to that population are purely incidental. Policies (including the new house and land promotion) are targeted to improve experiences for new users, because catering to midbie and oldbie users just doesn't create growth.

The only way to substantively grow the economy and population of Second Life is to improve the orientation and retention of new users (or institute some sort of secret cloning program for midbies and oldbies).

Admittedly, once that is done, the transformative wave will need to follow those users as they in-turn become midbies and oldbies, otherwise there is simply no long-term gain. If you're planning a fish-dinner it doesn't do you any good to keep throwing the fish back after you've caught them.

Second Life, it seems, has reached the limit of its current user-experience and brand-identity. Linden Lab is in the throes of transforming that experience (and we really wish they'd pick a more appropriate and mass-market friendly brand-name, the name 'Second Life' doesn't really do anyone all that many favors). The question is how far the Lab can and will go, and whether it can follow through.

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This article was originally published on Massively.
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