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Even though educational budgets are squeezed these days, it seems unlikely that cost alone has dictated this scaling down. Once again, it reflects the fact that not only individual but also institutions are losing faith and trust in Second Life and Linden Lab.
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I'm kind of finding it hard to be angry at Linden Lab over the pricing re-structures. People were abusing the Open Space thing, and LL is supported by investors just as much as by tier. I imagine those investors are scrambling, themselves, to cover commitments and scaling back as well. LL is probably in the same boat as Princeton.