Linden Lab announced that they are initiating new land pricing immediately, in spite the fact that the new land store isn’t available yet. Part of the argument and virtue of the new pricing was that it was to coincide with an automated system for bring sims online - basically, order a sim, up it pops.
Hacking a couple of man hours off the time it takes to install a sim might be part of the reason to lower the prices, and Linden has made a wise move in launching the new pricing system in spite the new system not being ready. With the announcement of the new prices, potential buyers were left waiting to purchase because it was such a significant reduction in price.
While the reduction in prices might have far more diabolical purposes, for individuals or companies looking to get into Second Life, or to expand their presence, lowering the cost a few notches is helpful. For the in-world economy, however, it might be a different story, and it brings into question whether “land” should ever again be viewed as an investment.
In the meantime, order up those sims - just expect to wait the usual week or two to have them brought online.
OK, devil’s advocate for a sec…
I always struggled with the idea that virtual land was ever any kind of ‘investment’. For starters it’s an infinite resource, so there can never be any (real) scarcity pushing up prices. Plus it’s in Linden’s interest that the prices stay low-ish and they control the supply of land so therefore monitor and cap the average prices. Land barons are in a (friendly?) battle with Linden, they want prices to rise but Linden want them to stay low - and in that battle Linden will ALWAYS win, they control the supply.
Where is the investment in that scenario? It’s like saying “I just invested in a blank webpage!”. Virtual land is nothing more than a host for your virtual endeavours not really an asset in itself (or not much of one). It doesn’t even have the attraction that a great domain name might, so even a blank webpage could have more real value!
Invest some talent, time and effort in your virtual site and you could reap big rewards, but the virtual land it sits on is, let’s be really honest, virtually worthless…
But Eris - SL isn’t a money and cents kind of place is it? Because while as a business person I’d knock anyone over the head with a board if they thought they were going to make a fortune in real estate, there’s something important about the concept of ownership and value related to “land” in Second Life.
Now, first, you’re right. Land is simply a development platform. Build something ON the land and it starts to have value. Now, if I start talking about land as metaphor I’ve got it wrong too (I think I ONCE thought that, but it’s such a thin argument). But the concept of land and its value as part of the social contract maybe has more resonance.
Linden doesn’t really have a choice. Servers are practically free over on OpenSim. (P.S. That Wired magazine cover “FREE” still bugs me - it ISN’T free, you’ll pay in the end with time, attention, data, lack of service or need for it).
And let’s face it, when they tweak the price of servers it’s sort of like changing the talent tree of Paladins in Warcraft - some people up in arms, others thrilled, you can’t win really. But the point is that the pricing is part of an interconnected cultural web, use and value that people are deriving from the platform. You can’t just look at it as an accounting entry change, any significant policy change can have impacts that are further ranging than you anticipated.
(Hamlet Au’s book is practically built on the premise that for every change Linden made the consequences were nearly totally different than they anticipated, so obviously if they’ve learned lessons they haven’t shared them or are keeping mum).
As far as impact - well, for me, I’m probably one of those who benefits more than loses. That doesn’t mean I don’t empathize or feel that they’re changing the “rules of the game” without telling anyone what the new rules or focus might be. On the other hand, I also suspect that they might not even see it that way, and just think it’s a pricing shift and didn’t really give a LOT of thought to what it might mean.
Time will tell, and in the long term if they can automate bringing sims online, if hardware costs are getting cheaper, and if the competition is practically free then the lowered prices are needed, although I hope that it doesn’t also lead to a cut in service investments or grid improvements.
HAHAHA did I just SAY that last part? Oh dear.
(Waits at the entry to the Lab to shake M Linden’s hand and wish him luck).
You’re right of course, the ‘concept of ownership’ is a big deal within SL and directly responsible for many avatar-hours conceptualising and building virtual places. But, to continue the devil’s advocacy for a bit, it is only that - a concept, not a reality. It’s a concept we all buy into because it makes the virtual world go round but at best it’s illusory and at worst it’s some weird kind of pyramid selling scheme we’ve invented for ourselves.
It works to translate the concept of land ownership into virtual places because it gives a structure and makes sense of things - it’s a paradigm we all understand. However maybe too many people have taken it too literally - they’ve not only carried over the concept of land ownership, they’ve carried over the RL idea that land is an asset with an intrinsic value, that it’s a finite resource and that it can actually represent some kind of financial investment.
Virtual land is really none of those things and it seems a bit (financially) dangerous to me to believe that it is. There is no doubt some money to be made dealing in it, land barons are basically a service industry, nothing wrong with that. There are also endless cool things you can do on virtual land. I just think some of us need to be a bit more clear-headed about what it represent financially - it’s a cost and not an investment.
We need to keep a similarly clear head about virtual banks and stock exchanges too! Wanna play stock exchanges? Use play-money!
Linden’s decision to drop the price of introducing new islands is interesting, it reveals the gulf in thinking between residents and Linden, as if that needed further illustration. To Linden it probably is just an issue of servers on racks getting cheaper and the growing competition on the horizon. It IS just an accounting exercise - they didn’t think of its implications on the inworld community because they’re not really part of that inworld community. I don’t believe either it was part of a considered strategy - only 2 weeks before we’d had the announcement about OpenSpaces’ wider availability and if there was any real planning they’d have rolled those announcements into one big policy shift. Instead the OpenSpace announcement was half-superseded and half-supplemented by the price drop.
At the moment it seems to be a case of “Hi right hand, meet left hand!”
There seems to be a real gulf between Linden and its customers and it’s growing. For example, how else to explain some of the bizarre UI decisions being made with Dazzle? I can’t believe that anyone that actually has to USE the interface would choose these changes (altho changes certainly need to be made)? The latest RC client has now developed a weird drunken camera movement which probably looked lovely at the office presentation when Torley demo-ed it, but it’s a **** to actually use to build with!
M Linden has a task ahead of him…
Thank goodness I wasn’t the only one who noticed that camera problem with the new viewer! I thought it was some kind of weird lag spike. Hahaha.
Overall, I agree with you about sim rental, land, whatever. If you invest in it you’re mad. I’m also looking forward to whether M Linden can make a shift from technology-based decision making (it’s a cost of entry, now, which isn’t to say stabilizing it isn’t important, someone should be FIRED for the number of crashes and shut downs we’ve seen the past few weeks) to customer-centric decision making which also recognizes that those decisions need to be made against the backdrop that they are “policy” decisions because they have cultural impacts, something that makes SL unique.
And hey. Linden’s not the only one. Look at Disney shutting down its virtual world Magic Kingdom. I wonder if they knew how many people had their hearts and wallets invested in that place. Probably thought “it’s just a game” (although I tend to think they’re smarter than that but who knows).
I wonder if they could sober up the camera as soon as you go into Build mode? I could live with that. Otherwise it’s another interface kink you have to adjust to and workaround instead of an interface enhancement that actually makes your SL work easier. I really wish they’d learn to tell the difference!
I agree about recent stability issues. I don’t remember it being this bad before. The current RC client is virtually unusable (for me) too, appalling frame-rates and crashing, hideous Dazzle interface, drunken camera. Do you think they’re missing a CTO? Is Cory Ondrejka secretly feeling very smug right now?
I don’t know if sacking people is better than forcing them to fix the problems they’ve caused - but either way I think Linden should give anyone paying land-tier some money back this month by way of apology. It’s only fair since SL is virtually unusable every day at peak-time and it would be a good PR gesture (for a change).
Interesting thread.
The drop in land prices was lousy for land dealers who primarily aimed at earning money through flips. For those of us in the land game who aren’t planning on cashing out any time soon it’s a good thing.
I disagree that we can’t look at virtual land as an investment. It just depends on what you mean by investment. As an aspiring land baron my business model is to purchase the land and turn it into cashflow. On a percentage basis the returns we anticipate are far superior to what we would see in the “real” world over the next year. And they should be, since the risks are far greater as well.
My partner and I did some rough speculation as to what the drop in prices will mean for Second Life over the next year. We recently placed an order for 4 Openspace sims at $250 each. We heard through the grapevine that there are roughly 250 order tickets ahead of us, and I’m guessing that at least as many have been placed after ours. 500 orders at 4 Openspace sims each is a cash influx of $500,000 for Linden Labs. It is also a land influx of 2000 or more Openspace sims. Odds are in another 2 months most of those will end up on the auctions.
See you in world!
Lizard Howl
thats for sure, dude