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CEO Rodvik Humble Shares Highlights From 2011 and his Outlook for 2012
As we head into the new year, I?d like to share some highlights from 2011, as well as a glimpse of what?s to come in 2012. First, if you haven?t already, I hope you will explore our recently launched Linden Realms, the Lab's first-ever game prototype. For newbies, it is a very simple way to earn L$, so hop on over and start collecting gems. One of the key goals of Linden Realms was to learn more about what tools Residents could use to develop richer experiences in Second Life ? and boy, did we learn a lot! In Q1 2012 , we will be releasing new tools used to develop Linden Realms, which will allow Residents to create even richer original experiences in Second Life. To prevent abuse of these tools, we will introduce a "creators" program in which verified members will be given access to these very powerful capabilities. In 2011, we also made strides to improve usability in Second Life. We launched a new version of the Viewer, which allows you to customize the user interface for a more flexible workspace with drag-and-drop buttons, among other key new features. The new Viewer also makes it easier for new Residents to discover essential, basic functions ? so, with the simple click of a button, you can change your appearance, go to a new location, find inworld merchants or head on over to the Second Life Marketplace. Speaking of customization, since we deployed Mesh earlier this year, we?ve seen more than a 16 percent adoption rate. I expect this to continue to grow at a strong pace as more and more Residents take advantage of all the features available to allow you explore Second Life and create even more engaging, exciting experiences. This past year, we also improved the customer experience with expanded Premium subscription benefits that include virtual gifts, as well as exclusive areas where you can go and create. One of the other benefits of being a Premium member is ownership of a Linden Home, which I?m pleased to report has reached an historic high. For those of you who have enjoyed owning a Linden Home and are looking for a little more real estate, you can check out what is available on the Second Life Land Store and through private-estate purchases and rentals found through Second Life Search. In 2012, you can expect to see more value added to Premium in the form of additional features and content. If you are not yet a Premium member, you can sign up here!In 2012, the primary engineering focus of Q1 will be server side performance and fixing bugs. In fact, you may have noticed one upgrade deployed this week which should reduce the number of restarts and increase performance for all regions. This kind of work makes for a poor headline, but has enormous payoff for the customer experience. We will also continue to invest in and focus on our customer support, reducing response times and increasing satisfaction. For landowners, existing land tier pricing will not go up in 2012. In addition, our service and quality focus in 2012 also means that we will be delivering features and policies that we believe will significantly assist merchants and landowners in running a business more profitably. For creators our first new feature for 2012 will be pathfinding. Because worlds feel most vibrant when they are full of life, one of our next focuses for Second Life is the ability to make high-quality ?life? within it. So in 2012, we will be rolling out more advanced features that will allow the creation of artificial life and artificial people to be much smoother. For starters, in Q1, we'll unveil a new, robust pathfinding system that will allow objects to intelligently navigate around the world while avoiding obstacles. Combined with the tools from Linden Realms this will make the polished creation of full MMORPG?s or people/animal simulators within Second Life easier and of high quality. In addition to delivering new features and increasing our support for Second Life, we will be launching some completely different products next year not related to Second Life. Some of them will be very experimental, but all will fit within our company?s proud history of enabling creativity, which I hope may interest some of you. Thank you again for being a customer have a great holiday and a Happy New Year!
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Embark on a Quest in Linden Realms: Collect Crystals, Earn Linden Dollars and Have a Blast!

We're excited to introduce Linden Realms, where Residents can dive directly into exploring the towers, caves and valleys of the Lab's first-ever game prototype. Dodge rock monsters and fierce fireballs as you cross deadly, toxic rivers to complete quests and cash in your crystals for Linden Dollars. And that's just the beginning...

Quests take you through the basics of game-play in Second Life while you earn Linden Dollars. You?ll start at Basecamp on Tyrah?s Island, where you?ll have your pick of exciting destinations to choose from!
- Sunspire ? Investigate a tower of experiments in teleportation and astronomy.
- Shattered Cavern ? Go deep into an intricate system of caves that snake down under a small mountain.
- Devil's Canyon ? Brave a dangerous valley of fire and rock monsters, where the courageous are rewarded.
- Whisper Hollow ? Hike through a forest full of secrets and obstacles.
- Banshee Peak ? Soar above it all at the northernmost point of the island and admire the view of Whisper Hollow.
- Tyrah's Peak ? Scale the snowy peak overlooking the center of the island and the Basecamp.
- Dark Moon Bay ? Explore this southernmost point of the island, where Tyrah wrecked her ship and hopes to eventually escape.
Our teams dove deep into the inworld creation process during development, and are eager to share some improved tools that came out of this effort. Residents will soon be able to use those tools to create even richer original experiences in Second Life.

Dive in, explore ? and experience the wonder of Linden Realms!
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November Update
New Viewer Gives Second Life Users a Customizable User Interface for a More Flexible Workspace
With the launch of the new Second Life Viewer on Nov. 8, Second Life Residents can now customize their user interface for a more flexible workspace.

New customizable functionality includes:
- Drag-and-drop buttons on the toolbar so Residents can change ordering, move buttons from one toolbar to another and choose which buttons appear
- An option to choose one, two or three toolbars
- The option to select either icons or labels
The new Viewer also makes it easy for new Residents to find the essential basic functions, as well as access more advanced functionality as they grow in Second Life.
 New-user functionality includes:
- How-to window provides easy, step-by-step instructions for common tasks
- Destinations button offers interesting destinations
- Avatars button allows Residents to choose and immediately change their avatar
- Inventory button lets Residents see the things they own
- Shop button takes Residents to the Second Life Marketplace

By merging the Basic and Advanced modes, users no longer need to switch between modes, which improves usability ? and ultimately enhances the Second Life inworld experience.
For further details on how to get the most out of the new Second Life Viewer, please check out the following video tutorials:
Getting Started with the New Second Life Viewer
Customizing the New Second Life Viewer
Additional Features in the New Second Life Viewer
Inbox Messaging Gives Second Life Residents a More Efficient Way to Communicate
Did you know that you are now able to send a message from your inbox to anyone in Second Life who accepts messages from you?
Whether you are a merchant and want to ask your customers about their experiences with your products, or you simply want to keep in touch with friends, the addition of the profile inbox will help you better communicate.
Because you can view and track your messages, inbox messaging also allows you to better manage conversations. And because the inbox is available on the web, you don't have to be logged in to Second Life to read and send messages.
If you would like to contact someone who is not in your friends list, you can send them a message directly from their profile by choosing ?Message? from the drop-down envelope icon.
Although direct messages to other users don't appear in your profile feed (even if that's set to public), if you are still concerned about your privacy, your profile settings allow you to control who sends you messages and how you get notified.
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The Second Life Economy in Q3 2011
The Second Life economy remained stable in Q3 2011. We closed the quarter with some positive momentum, with a continued increase in registrations and a stable Linden Dollar exchange rate with slight appreciation, as well as a higher amount of Linden Dollars held by customers. Most other key metrics were consistent with recent levels. ??
For a definition of the metrics in this post, please see this wiki page. Click on each image below to see a larger version.
DAILY COMPLETED REGISTRATIONS
Following the launch of our new-user registration flow, improvements to the Premium offering and the launch of mesh, we?ve seen a continued uptick in registrations throughout Q3. In fact, August was the biggest growth month for Second Life in nearly four years, with Q3 averaging 45 percent more completed registrations per day than Q1 before the new reg flow was implemented.

AVERAGE MONTHLY UNIQUE LOGGED-IN USERS
Average monthly logged-in users increased slightly from Q2 2011.

USER HOURS
User hours declined slightly, remaining within 2 percent of the most recent quarter.

AVERAGE MONTHLY ECONOMIC PARTICIPANTS
Active economic participants grew by 2.8 percent over Q2 2011.

AVERAGE EXCHANGE RATE
The exchange rate remains very stable, strengthening slightly with a 0.5 percent appreciation in the L$ over Q2 and a 6.4 percent appreciation in the L$ over the same quarter last year.

*Note that the exchange rate is expressed in L$/USD, meaning larger numbers represent a lower L$ value and smaller numbers represent a higher L$ value. The average rate is calculated by dividing the total L$ exchanged through the LindeX by the total US$ exchanged through the LindeX in the quarter.
L$ SUPPLY
Money supply grew by 3.7 percent in Q3 from the prior quarter and 8.5 percent year over year, bringing the equivalent U.S. dollar value of all customer-held L$ to U.S. $29.3 million.

*Note: From time to time we will change our reporting in order to provide the most relevant and accurate summary information for the use of merchants, landowners, content creators, and other participants in the Second Life economy. Q2 2011 is an estimate calculated based on different methodology versus previous quarters.
LINDEX VOLUME
LindeX volume for Q3 amounted to U.S. $30 million, a 2 percent decline in line with seasonality, but 6.4 percent growth of the same quarter last year.

WEB MERCHANDISE SALES VOLUME
Q3 2011 web merchandise sales volume grew 2.8 percent compared with Q2 2011, and grew 30.9 percent as compared with Q3 2010.

WORLD SIZE
World size remained consistent, with last quarter at just over 2,000 square kilometers.

Previously:
Q1?
Q2
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CEO Rodvik Humble Shares What's New in Second Life
Hello Everyone,
It?s been a little while since I last updated folks on Second Life.
Earlier this year, I noted several areas we would be focusing on. Let me update you on each area and share with you our plans for the remainder of the year.
But first, we?d like to give a warm welcome to our newbies! August was the biggest growth month for Second Life in nearly four years! I hope you all take the time to try out the many different activities in Second Life ? there?s everything from clubbing to boating. You might even to want to try your hand at making something new. As a side note, one of the easiest ways to find new things is to check out the Destination Guide in the log-in screen of the viewer.
Now, back to our areas of focus at Linden Lab:
Usability
With the Basic mode, which we rapidly deployed, new users can now more easily find things, move around the world and manipulate the camera. This has really helped people walk and talk, as well as getting newbies up and running. But it has its limits ? particularly when it comes to participating in the economy and creating things. Soon you will see us merge the Basic and Advanced modes, which will eliminate the need to switch. All functionality will be in one mode with easier-to-use controls. After these modes are merged and deployed, you can expect us to release an improved UI into the viewer. This should be a lot more flexible for user flow for all users.
Deploy Mesh
Thankfully, this massive feature got deployed on time. Many new creators joined Second Life so they can use their Mesh skills, and some of the creations I?ve seen are truly spectacular.
Improved Service
Although our response times have improved, we realize that we still have a ways to go. You can expect continued investment and focus in this area to include expanded support staffing, as well new features (similar to the estate tools we rolled out earlier this year) and revised policies to make the Second Life experience much better for customers.
Better Customer Value
Last month, we added exclusive Premium areas such as sandboxes (places where you can go and create), as well as free items. You can expect more exclusive areas, items and features in the months ahead. We have been really pleased by the positive response to Premium by our residents. In fact, last week we reached the highest number of Linden Homes ever. We hope these new Linden Home owners will enjoy their newfound land ownership and check out other ways that Land is available on the Second Life Land Store and through private estate purchases and rentals found through Second Life Search.
You can sign up for Premium right here!
Shiny New Things
Because worlds feel most vibrant when they are full of life, our next project for Second Life is the ability to make ?life? within it. Second Life has more than a million real people in it every month, as well as many artificial creatures and people ? however, our creation tools have not made it particularly easy for the content creators to build high-quality entities.
Over the next few months (with testing most likely starting in December), we will be rolling out a series of more advanced features. These will make the creation of artificial life and artificial people much smoother. For starters, we'll unveil a new, robust pathfinding system that will allow objects to intelligently navigate around the world avoiding obstacles. Imagine being able to create advanced pets, creatures or even a living town where non-player characters are walking about. Combined with the experience tools I mentioned above, it should soon be possible to create more advanced MMORPG?s or interactive experiences which use AI right within Second Life.
I will touch base again in a few months when we have delivered a few more things. Thank you again for being a customer! I hope you enjoy your time in Second Life, whether that has been for years or you have only just joined.
Rodvik
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