Linden has further clarified the pricing structure of private islands and Open Space sims in a blog entry this evening. I posted initially here.
The move is being “read” a number of ways – on the one hand instilling less confidence amongst land owners who rent or sell parcels who, without warning have seen the base costs of setting up comparable islands fall up to 40%. While others are reading is as a welcome shift that will encourage wider use of the Second Life platform.
With competition from OpenSim, Vast Park and other grids where a sim can be had for as little as $100, the move is a response to a broader competitive landscape, while leaving some in world land owners in the lurch.
The Concierge Group, blogs, and responses all summarize the mixed reaction the announcement. For some, it’s like sub-prime brought to life in the Second one…for others, perhaps a chance to ramp up, spreading the costs of sims across more regions, with the Open Space pricing also encouraging more land purchase.
Linden explains the change as follows:
Technology and service costs vary over time and we as a business have to respond to that in sensible ways. In addition, we have to continually assess our business model and make changes where we need to. By and large we have worked hard to keep prices static for long periods, and when we have had cause to increase prices in the past, we allowed grandfathered monthly fees to continue because we value the time and energy those people had put in. Nearly 18 months on and that grandfathered pricing is still in place for many island owners.
This was the right time to reduce the setup price of an island. As any business would, we will review the effects of these changes over the next period and make adjustments or leave them unchanged according to how it goes. If we are able to make savings, then we feel that passing those on to our customers is a good thing.
I think it’s kinda freaking that pple want rely they RL life income based on a GAME. SL is a game after all!
I’m still astonished when pple take SL business that seriously. How pple can pretend to “invest” Real money in a world that could be switch off in less than a minut ( sudo init 0) ?
Investment means Cash and Benefits. Do you know any REAL market that could only bring benefits ? Their is always a looser for a winner…
I’m not a landlord, just a brat that have fun with few sims I owns. I knew it will be a loss the minut I order them and I don’t intend to make any profit renting them too. For my daily living I got a Real Job !
Linden made a good move with the cost reduction. The ticket will lure pple to buy new sims that will give LL more montly revenue !
Go Linden Go !
Cunning ^^
Da FoxBoy
I have very mixed feelings about both the price reduction and the clarification with that small “peace offering” to those who bought within the last few days.
For fun and self users the price drop is great. For land business it might be a killer, especially reading some comments like “How cool, I now will buy a SIM/a pack of SIMs and start a land business.” – they only see the purchase price and not the monthly costs that are the real killer. Land business isn’t an automatic gold mine. I see lots of new estate land showing up – but where are all the new folks who have to rent/buy on those new SIMs to cover the monthly costs for the estate owner? In german we have a saying “zuviele Häuptlinge – zuwenig Indianer —- too many chiefs, too little indians”. Competition, that already is hard in the land business, will get worse. Some will even offer below cost rents/tiers to keep the monthly loss by empty land as low as possible. Within a couple of months quite a few of the over optimistic new landlords will realize that it doesn’t work out, they will give up, might even abandon their SIMs just to not having to pay next months 295 USD. This will not only be bad for them, but for their parcel renters/owners too, who will be left with nothing when LL reclaims the SIMs.
There is quite a bit of gloating about the bad big real estate companies who sell/rent out estate land. Well, folks, with competition going up and rents/tiers going down: will they still be able to offer great public freebies for their renters/parcel owners, like free parks, landscaping and so on? When they have to lower their rents/tiers, they might have to take away those benefits and just sell/rent out 100 percent of their land to make months end.
Now to the peace offering to recent buyers. I’m especially upset about the more or less non-existing offer for those who bought open space SIMs after the recent policy change in march. LL dragged hundreds of people into buying them at 415 USD within a single month – and now they lower the price to 250 with offering a reparation for only a fraction of them who bought within the last few days. Yes, concierge says “you can give them back if you gout them in the last 30 days, we won’t even take the usual 100 USD restocking fee, then you can buy again at the lower price” – but honestly: I put so many hours of work into my private new one, I would be nuts to give it up and do all the work again to get 165 USD back. LL hopes that many think that way and just swallow the pill. There would be such an easy solution: just give all those, who bought after the policy change (and often only BECAUSE of that policy change) another 2 months with out the 75 USD monthly fee. Why this stupid chaos of “give back, get your money back, buy new”? Heck, even if they would only offer a single month without fee it would be a great sign of respect for those who put lots of real money into LL. (Especially with the performance bug for open space SIMs introduced with H4 that made them not really usuable for 10 or more days now and only will be cleaned up with the next server software update.)
Oh well. Looking back at how LL made decisions during my time here I have to say: business as usual.
Danny
“How pple can pretend to “invest” Real money in a world that could be switch off in less than a minut ( sudo init 0) ?” Yes, I wonder about this too. Why, for example, does Microsoft want to buy Yahoo? Don’t they realize it can be switched off in less than a minute? It scares me to death to put my money in the bank for the very same reason. I always ask the teller about the “less than a minute” factor and they reassure me that it isn’t in the bank’s interest to arbitrarily shut down their computers even if it were to take less than a second (pull plug from wall)! I am glad that I am not the only one who feels this way. I was starting to feel like an isolated, paranoid basement dweller.
Real banks are protected by laws, at least in my country.
I remembered the “.com” phenomen when everybody should have been billionair within a day. We know how it end.
My company I work for recently bought a competitor. Most of the pple their complain their “stock options” worth nothing and wasn’t included in the deal… Actually they want to sue the new comp to claim compensation… funny…
Is it written somewhere that stock-options are real money ?
I doubt so… So is SL, a Game
Sacha who try to http://en.wikipedia.org/wiki/Always_Look_on_the_Bright_Side_of_Life
sacha
sascha,
I was sorta just making fun rather than trying to make a substantive point. I concede that running a business in SL is much riskier than depositing your cash in a bank because SL’s invisible hand is often the mailed fist of Linden Lab. However, the “SL is just a GAME” meme gets under my skin because people use it as though it’s understood and agreed that “Just Games” have no value outside of consumerist notions of “fun”.
I don’t like to compartmentalize my psyche in the manner the “just a game” crowd thinks is the only and “healthy” way to organize our reality. However, in the interest of full disclosure, I did try to buy a candy bar with Monopoly money when I was a kid. Perhaps my confusion started then.
Icha
Hmmmm. And I would win at Monopoly by slipping a candy bar to someone in exchange for them not picking up Park Place when they had a chance.
I think of it as an early experiment in mixed reality.