I'm wanting to look at the macroeconomics of SL trivia. I realise after "macroeconomics" half of my readers have just skipped to the Linden-bearing questions at the end, but you've been kind enough to humour me and stay with me. Where do the Lindens come from to finance trivia events? This is something I did not understand all all until recently, and if I get my facts wrong in this post please be sure to tell me.
I'm not a business expert, but I've been doing some digging. Linden Labs (LL) is a private company and isn't obliged to publish its accounts. Bloggers seem to think its profit in 2008 was in the region of $40M on a turnover of something like $96M.
Current exchange rates: $1 US buys 250L, £1 buys 418L, 1 euro buys 359L
And LL's turnover comes from somewhere, and it comes from either corporate subscriptions or your credit card and mine. And the trivia economy is the same. Eventually the lindens come from someone's bank account.
I've heard it said often that people can make more money out of playing trivia than hosting it, and I can believe it. If you're good and can play Marine Park, it is almost certainly true. Lette touched on Marine Park, which seems to have a distorting effect on the SL trivia economy by giving out 16000L in prizes every event. That's a lot of money, and would finance 2 months' worth of Lilly's events. I know much of this money is recycled back into trivia, and when it disappears, and nothing in SL lasts forever, I predict trivia events and prizes will contract significantly. I admit to a little anticipated schadenfreude here. I've never played MP and almost certainly never will because it begins 3am UK time. I'm sorry about the schadenfreude, I know you can tell it's just envy.
For those who don't know, practices vary, but club owners often pay hosts with lindens to run events. Most or all of this goes on prizes, and what percentage of tips goes to the host varies, I think, from club to club. So the host usually makes something out of it. So far as I can tell the biggest losers in all of this are club owners.
Coco Sands adjusts her caffeine levels during her Shiraz event
Sometimes there is an indirect benefit to owners from trivia events. Attracting players to events boosts traffic figures, which in turn means that shops on the sim will come higher up when searched for, in turn hopefully boosting sales. If the venue is attached to a shopping centre, as with Double Standards and Shiraz, then some extra sales may offset the cost of the event.
Where there is no such income stream, for owners it's a labour of love. I've got no financial interest in any club, but, if you've got any spare Lindens, spare a thought for the venue owner who makes it all possible for you.
I'm fortunate enough to be able to buy Lindens. One of the great things about SL is that it brings together people of all nationalities and from all walks of life. I know some of you rely on making money in SL to keep going, and I'm certainly not criticising you for it.
One last thing: there is a poll at the foot of my blog. Unfortunately my colour scheme makes it eye watering to read, and I can't work out how to change it without making other parts of the layout look eye watering in turn. I'm sorry about that, but do take a look.
Linden time! Replace the letters with words, answer in comments please. Leave your avi name, first correct answer gets paid 10L in world.
1. 1 FOTCN
2. 2, 2 TLWB
3. 10 PIC
4. 52 CIAP
5. 27 MSOTEU
6. 8 MH
7. 221 BBSSH
8. 18 HOAGC
9. 12 DOC
10. 14 LIAS
4. 52 cards in a pack
ReplyDelete10. 14 lbs in a stone
Too tired to think of others.
Hi Lou
ReplyDelete4 is right
10 isn't the answer I was looking for but gets you lindens
Sleep well!
5. 27 Member states of the European Union
ReplyDelete6. 8 Miles high
7. 221B Baker Street Sherlock Holmes
8. 18 Hours on a Global Clock?
9. 12 Days of Christmas
Like Lou, too tired to manage the rest...
oh...
ReplyDelete3. 10 Provinces in Canada
:)
Mako!
ReplyDelete3. 10 provinces in Canada, Lou missed that one!
5. 27 member states of teh European Union
6. 8 Miles High (The Byrds, covered by Roxy Music)
7. 221B Baker Street, Sherlock Holmes
8. What global clock is this Mako? All the ones I see have 24!
9. 12 days of Christmas
Event venues look at any event in two ways I think, either it's mainly to get traffic and purely a $/traffic ROI evaluation or it's simply wanting to have fun events. Trivia and other contests are a fairly unassailable-by-LL-bot-squads kind of camping if you consider it from the landowner's perspective. Not to mention looking better from the casual observer's viewpoint. I think many places may have traffic in mind a little but are more interested in being a genuinely fun place to be at. I'd be interested to know how many venues don't break even because of event purses ....
ReplyDeleteTeh!
ReplyDelete18 holes on a golf course
ReplyDeleteAh, golf course makes much more sense. At 4am my brain locked onto something about an 18 hour clock... heh, cognitive function in the wee hours is often not so much.
ReplyDeleteYou should have come with me to MP while you were in Portland, Lotus! Just to experience the crazy. ;)
Re: money, I'm not sure how clubs/malls do it, to be honest. I've almost purchased/opened certain trivia-related venues twice, and the number crunching has killed it every time. My goal with Armada trivia was simply to break even, which did happen in the end, but then the sim itself restructured due to financial issues. So many places come and go -- Mr. Lee's, Club Reflections, Trivia Monkeys, all those places where I first played SL trivia are gone, probably because of money. It's nice that a trivia community has developed now -- at this point I go to certain events to support individuals and I've disengaged from getting attached to the venue itself (which might not be there tomorrow, lesson learned). That's bad, I guess, because I'm not supporting the venue (unless the host gives a percentage of their tips to the owner, which I think happens rarely). I think savvy venue owners get their income in other ways -- trivia doesn't make money.
Yeah Lotus! You've spent the last few weeks on the west coast of Americaland; despite being on holiday you have still been online in SL so how come you haven't tried MP yet?
ReplyDeleteBecause I had better things to do!
ReplyDeleteWe at Lilly's get 100% of tips, but I also have a lot of sympathy with the club owners.
8 is indeed 18 holes in a golf course.
We still have 1,2 and 10 left.
Hej Lotus!
ReplyDeleteI enjoy your blog, to the extent that you are on my RSS feed, an honour you share only with the Guardian and “Waiter’s Rant” ( a blog about tipping among other things). (I do also read other trivia blogs with interest).
Oh, “You are on my RSS feed”, that is a pick-up line I must remember! :)
Trivia economics is almost as baffling to me as RL economics. Considering the often high payouts I still do not see how potential increased traffic to the Sim or tips can make the trivia event profitable. As you say, many must host the trivia event for other reasons than monetary. And could the Mafia, Trivia Branch, be involved in some money-laundering operations somewhere?
Tipping can hardly be a great source of income, at least not based on tips from cheapskates like myself. I do tip most of the times but as the tip is based on my winnings, the tip is seldom great only symbolic. I have noted that there are some generous trivia tippers but I doubt they cover the prize sums paid out.
Outside of Trivia I have seen tips given of several thousand Lindens (don’t ask me where! :) which I find mind-boggling. I guess in SL, as in RL, there are some very rich people who can afford those kind of tips.
(An anecdote btw regarding rich SL people: I know a girl who was fortunate to hook up with this guy who is a RL multi-millionaire (he is a famous author actually). Anyway, they went to a shoe shop in SL where she wanted to buy a new pair of shoes, genetics having kicked in. Like so many women, she is a member of Shoes Anonymous and she could not immediately select a shoe, because you see, there were many different colours and styles to choose from! So the rich author guy, probably getting impatient, bought all the shoes in the shop for her to the tune of 40,000 Lindens!)
I was a little bit “upset” when you write that some Simowners “steal” some of your tips. I tip *you* for *your* services. I would never tip a restaurant owner for providing tables and electricity to his restaurant. Here we have to acknowledge that the culture of tipping is different all over the world. In Sweden we only tip in restaurants, never anywhere else (it is supposed to be demeaning to tip another person) whereas I get the impression that in the U.S. tipping is very commonplace indeed. I have no qualms tipping the Trivia Host/ess of course, and despite the meager size of my tips, I really do appreciate the time and effort that you put in.
In some trivia places I feel there is an “army” of people who expect to be tipped. It is the host/hostess for saying “Welcome” which of course is nice. There is sometimes a dj, who though, I never tip since I usually have my own music stream (I am not a fan of Nickelback either). (Some places do have music in my taste, not necessarily furnished by a dj.) In some places there are dancers who wants tips as well. And also the owner of the place.
At one trivia event there were admonishments like every 10 minutes to tip this person or that one and this becomes irksome after awhile like repetitive commercials. The voluntary contribution that a tip is supposed to be becomes a veiled requirement.
I do realise of course that everybody have to eat, even in SL. Unfortunately I cannot offer a solution to the trivia financial conundrum. Perhaps inviting that rich author guy to the Trivia Community?
bo wrote:
ReplyDelete"Anyway, they went to a shoe shop in SL where she wanted to buy a new pair of shoes, genetics having kicked in."
Was this a dominant gene or a recessive gene?
/me scratches her head at the nonsense of gender stereotyping in a world where there's a 20% chance that the "girl" in your anecdote was a man.
Anyway.
Great post, Lotus... I hope we can coordinate topics on a more regular basis.
On the subject of where money for tips come from, pay attention to your transaction records: most people are only tipping a portion of their winnings, some tip the same amount they win, and a small number tip far more. There is one anonymous donor to each Bucc Bowl who consistently contributes L$2500, even though s/he doesn't buy lindens. S/he is just that much of a fan of the Bowl that s/he saves up money every month for it, which is awfully flattering and appreciated, even though I've told him/her that it isn't actually necessary.
There are a couple of people who aren't big trivia winners but are hugely supportive of the community, and they do buy lindens. They regularly tip significantly more than they win. Lindens are actually pretty cheap and go a long way; the only truly massive expense in SL is property ownership. Though a lot of us attempt to be self-sustaining within the SL context, it's both possible and reasonable to financially invest in it. Many people spend at least as much money on video games yearly as SL property owners spend to maintain their virtual land.
Whether SL is a world or a game is a perpetual debate, but the answer simply differs from person to person and the choices aren't mutually exclusive. If you see it as a form of recreation or entertainment that you're willing to put an investment into like paying for satellite TV or spending money on a hobby, then you'll approach money within SL differently from those who see it more as a means of communication and socialization or as a source of profit. I tend to think many club owners fall into the "spending money on a hobby" category, or at least those who do probably enjoy club ownership most because they're not expecting anything back but intangible rewards such as the fun of building things, the satisfaction of running something that other people enjoy, friendships, etc. Not everything in SL has a RL equivalent, and club ownership certainly doesn't.
Now i recognise that a little RL cash can go a long way in SL, and also that in terms of money spent it can be very good value for the hours of enjoyment gained compared to other hobbies.
ReplyDeleteOn the otherhand I have heard one person tell me that they spent ~$4000 a year in SL (four thousand real life United States Dollars). Now to me that seems insane, but then my parents never tired of reminding me that they grew up living in a shoe box in the middle of the road.
If you are prepared to spend that sort of money on the land then a thousand lindens a week to fund trivia or costume contests is pennies.
While I compose a reply - how about
ReplyDelete1 Flew over the cuckoo's nest
and 14 lines in a sonnet
ReplyDeleteand 2 is 2,2??
Yes Cully! You are good on these!
ReplyDeleteOne flew over the cuckoo's nest
14 lines in a sonnet
No. 2 is 2, 2 or two comma two.
It's not 2 point 2
Yeah, I don't have $4,000 a year to spend in SL, either, but I also don't have it to go on ski trips, join a golfing club, or even shop. Some people can afford any or all of those things (or love them enough to make those dollars stretch), and as long as some of them are spending their money making fun and/or beautiful places in SL, I'll be appreciative.
ReplyDeleteI like to think that, if I weren't now a club owner who has to worry about paying monthly rent and appearance fees for live music acts, I wouldn't really pay attention to this money stuff. As Lou has pointed out before, you can have a fairly rewarding SL experience even without spending tons of lindens on yourself. But when you take on the extra financial responsibility of club ownership and the five-figure monthly commitment involved, money does become an issue in how you plan events and support things. As many of you probably realize, [MonoChrome] isn't a club that is set up as an economic engine -- hehe, it's not even close to being self-sufficient, although the donations to the club in the old oaken barrel do help and are always appreciated. But it's a labor (or, for my Commonwealth friens, "labour") of love, and Jez, Mandy and I have fun having a place of our own, but, yes, we sometimes have to figure out how to budget for trivia and the live music events we host every month, especially as we look at options to add events (whether trivia or live music). That being said, I'd like to think that people come to my event, and Lou's, and Reke's, because the events are fun, the people and chatter is entertaining, and people enjoy the atmosphere of [MonoChrome]. Because we don't have any vendors or shops or particle-ish blingy things and have a very scaled back atmosphere, we've really pushed the concept that the people who are in the club are the attraction, and I hope that social aspect, more than the economic incentive, is what draws people to the club. But I also try to have the prize ball active so some relatively minor amounts of lindens can be spread about to people who are there but not necessarily beating the various semi-professional typists at trivia.
ReplyDeleteSin thanks, I was hoping for owners' perspective on this one. [Monochrome] is a really good venue with really good events, and I had you in mind when I wrote my article.
ReplyDeleteI did think question 2 was hard. It's a line from a song which I think is well known on both sides of the Atlantic.
2, 2 the lily white boys?
ReplyDeleteYes! From Green Grow the Rushes-O
ReplyDeleteThere seems to be no need to feel sorry for those club owners who don’t make a profit from trivia, since they do it of their own free will, and certainly must be getting what they want, whether it is traffic for shops, prestige of ownership that would not be possible in RL, or whatever odd motivations people may have. Otherwise they simply wouldn’t do it. I typically tip a proportion of my winnings, as is the custom in my native U.S. I do think it is rude to tip nothing if you have won something, and nice to tip more if you can afford it or enjoy being a big spender for a few real dollars.
ReplyDelete