Is the SL "crisis" overblown?

Let's ask the dirty question up front: did the SL media overblow the partly-financial "crisis" and defection to other virtual worlds that has been going on in Second Life for the last few months?

I would like to keep Linden-bashing because it is a cheerful activity. However, it is time to cast some healthy doubt upon the popular view that Linden Lab can only do wrong and that they are causing the downfall of what they created.

Given that an economy is always exposed to fluctuations, drawing a big picture has probably been done too quickly.

The trick to identify trends and fundamentals is not just by looking at the overall data. It is sometimes about isolating the right data. Any alert stock market investor will know that there are a few indicators that show a company's health. In the real-world retail sector, comparable store sales and margins can say much. In the aviation industry, orders and margins speak loudly.

What about Second Life? Forget active users and total residents since this can be tricked by bots and alts. The total amount of money in-world? That can also be tricky since camping, classifieds and other info can create false impressions.

My favorite data would be the state of business owners called "Unique Users with Positive Monthly Linden Dollar Flow". Were the grid going down the drain, we would see it there. Let's look at them on Linden Lab's Web site.

Despite the Ginko scandal and the interest payment ban, the numbers haven't been bad at all. Depending on the amounts of moneythat you look at, the number of business owners who get richer has either been recovering, stable or improving in the last months. Such figures would need to be sustained in order for anyone to draw a big picture. Also, the number of US dollars spent, as seen in the economy graphs, will have to show a growing trend in the next quarters.

Yet the doom-saying might be bigger than the size of actual problems.

As far as defection to other online worlds goes, I treat this as a small group of rebels angered and disappointed by the news that hit them. Much has been said about Central Grid, but the last time I checked, it had only 258 active regions, 81 reservations and 693 active members. A grain of sand on the beach.

From a user standpoint, connecting to Central Grid means configuring a Second Life compatible client to reach the alternative grid. Not exactly a friendly setup for people who are not advanced users. Second Life already is a bit of a challenging environment to understand for the ordinary Earthling. Will they care to dig into their client to make a switch?

Allow me to doubt it.

Take a deep breath folks, Second Life is far from dead.