Hiro Queso

Exactly! Making money was never the primary draw for me, though it turning a (very small - I could make more in a couple of hrs rl than I could per month in SL) profit was part of the enjoyment. I enjoyed seeing the community grow and mature - most of my residents were more like friends than tenants - and at the point I shut up shop, about 75% had been with me for nearly 2 years! I never charged a 'purchase price', and I set my rent to match LL's tier structure. As much fun as it was, the way the tier increase announcement was handled rattled me enough to no longer feel confident to have so much of my money 'invested' in SL, though I hasten to add it was a financial investment in 'fun'.

Hiro Queso

I don't disagree with what was written in this blog entry, Ari; most of it is common sense (Though it is my opinion that LL should take more care in the way they handle things, whether they are legally required to or not. I would also suggest to you that relying solely on SL income is not a prerequisite for being pissed off at losing money as a result of LL's poor handling). I just don't think it's very helpful to those who have been, or feel they have been, majorly affected by this announcement. The ''pffft' and 'nuff said' comments suggest to me that you're not only aware of that, you enjoy it.

Sarah Nerd

On estates at 1675 and pure rental I planned on it taking me 8-12 months to get back that initial investment, and thats ok because I planned (and still plan) on being here for the long term. Just saying most estate owners aren't getting rich here. We are working at making something bigger and long term goals, so it sucks a bit when LL basically comes along and stomps down months and months of working at something. I don't care if you do it for fun or money, it fucking sucks to be treated that way when you pay LL and pay well LL to play this game.

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Lucifer Baphomet

To me, it shows the price hike to $1675 was never needed.
Zee's financial policies fucked everyone in the ass for a year.

Sarah Nerd

When I woke up yesterday I was buying mainland at 8-8.5L a meter. Last night when I went to sleep the bottom of the barrel listings were at 7.9ish. A few hours later I wake up, it's now at 7.4, 7.5. I 'm going back to bed in a few mins. Wonder where it will be when I wake up. It's a slap in the face to mainland owners as well when they change price this fast.

Beau Perkins

Is it possible that maybe it is as simple as, there is an excess of land because less people are buying so they are trying to provide a stimulous?

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Quiplash

AAAARGH! I should have sold my land when I was angry, instead of waiting until I had calmed down.

nadir

i'm more in line with Sarah and a few other's thinking ...

long term, cutting the up front costs sorta removes some barrier to entry into the "virtual world" for RL businesses to get in on the "fun". However, the overnight move is absolutely ridiculous. 40%?! jeez.

The way I've seen them positioning themselves is that they're trying to become the "domain / hosting" service for virtual worlds. Now they've got the IBM brand to plaster all over their product too. With OpenSim and other VWs on the horizon, they need to step up their game.

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Ray Figtree

By dumping 10 sims a day onto the Mainland and lowering starting auction prices on land that has not been part of the Grid? Can you say "a crapload more excess land in the next two months"?

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Wildefire Walcott

It will increase the number of estate owners and will increase our population of newbie landlords who inevitably will screw some customers over and generate more "NEVER RENT IN SL POSTS" on the various forums. It will also cause some newbie estate owners to charge so low that they're not making a profit unless their sims are 100% full, which will make it tough for any competition who likes to do creative terraforming or offer prim bonuses with their estates. *sighs*

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Brave Republic

My friend and I (I'd say pet normally--ask sarah about that conversation ) have noticed while exploring sims for unusual stores or loactions that there is quite a lot of unrented space lately.

I was at a sim last night to check out an annex store and I noticed 4 things immediatley:

1) Hot female German Avs camping on benches while German language rock played over the stream

2) Hot female German Avs camping on benches

3) Hot female German Avs

4) for every one store space rented, there were 5 not rented on each block

More and more we have visted sims that have entire areas designated for commerce that lay fallow and unrented.

Maybe the market has reached saturation now that all those ebay auctions showing people how to make millions on SL have been running. Seems to be a trend. Has anyone else noticed this?

Brave

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Love

Sorry I haven't read through the thread, but wouldn't it have made more sense to keep the estate pricing the same but lower tier? That would both stimulate the SL economy, and give estate owners a helping hand. Plus LL would still get their deployment costs recovered.

Eata

My prediction of the situation:

They have a lot of unused capacity which carries a substantial maintenance cost, likely both data center space and unused setup servers. Island uptake has dropped sharply (In response to US economy issues), LL extrapolate this data into the future and see themselves carrying an unacceptably high overhead and drop the prices somewhere closer to cost (Each of these servers is maybe $3000) to dump capacity.

Prices are likely to increase again when they feel secure in the situation.

Wildefire Walcott

"Pfft" and "'nuff said," eh?

Frankly, I don't know a single successful business person in SL who does not love what they do. Sometimes it can be stressful, and sometimes it can seem thankless, but overall, doing business in SL is fun, and that's exactly why we're doing it. But really, all of the people I have ever known in SL who were truly only "in it for the money" were either failures or crooks.

We haven't just invested money in SL (some of us haven't invested any of our RL funds), but we've invested time, work, and passion into what we do. While I'm personally not too worried over the announcement, I can totally understand those who feel jilted. It's not bad enough that the recent technical problems have caused every business owner in SL more time, work, and money without compensation- now their land holdings have all spontaneously devalued by 41%? I guess it's easy to be so dismissive when you've got nothing to lose personally.

Ciaran Laval

They could have been a little bit creative about this and passed on cheaper hardware prices in a fashion that didn't devalue the land market. Jack's comment at the end of the blog indicates that hardware is cheaper.

How about offering existing island owners the new cheaper islands? People would have moaned but it wouldn't have had this sort of impact.

Lucifer Baphomet

Existing island owners should have got a reduced tier fee at least for a few months.

Hiro Queso

Bets that cessation of grandfathering will be announced within the next 3 months?

caroline ra

Well it looks like thats pretty much what might happen if this blog post is any indication.


Jack Linden Says:
April 8th, 2008 at 6:53 AM
Thanks to all of those that have commented. As I said in the post, of course this will raise questions and we will answer those in a further post, probably today. We just felt it important that with the new Land Store on the way soon, we should give as much advanced notice as we could.
In addition we will add an FAQ to the Knowledge Base shortly.
A few points in response to the comments on this post..
As Gwyneth in post 136 rightly points out, 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.
For those that have purchased an island recently, we will of course be providing some options and I will explain how that will work in my next blog post.

Persephone Milk

I agree entirely. I was very surprised when they announced the price hike last year since the new hardware was supposed to be cheaper to purchase, run and maintain. Exactly what was the price difference supposed to be covering? And now, I would like to know the reason for the price reduction. If they have dropped the price to purchase by 60%, can we expect a similar reduction in tier, from $295 to $175? And if not, why exactly? And what about the price and monthly cost of an Openspace? Their announcement seems incomplete without addressing these issues.

All of that said, my heart does go out to all that make their way here in the land business. Linden Lab has a history of making changes that impact the land business without consulting the community, and then having to go back and make amends. Perhaps this time, they won't even try.

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Tygers Dagger

Okay so sim prices have dropped substantially. The other effect will be that land rental/Estate prices will drop as well as the more experienced SL players will not continue to pay the current average selling prices of 4.5L to 6L per sq m.

This may cause some of the smaller Estate holders/Investors to rethink their business and dump their property possibly applying further downward pressure to land pricing.

Just thinking out loud here....but it is possible

Beau Perkins

I think they should do a good ole fashioned Land Grab.

Kristian

This was never about the landbarons, landlord, etc. This was about the corporations. When the big media push began, LL realized that for many of these organizations buying islands, the difference between a 1250 island and a 1695 island was negligible. They knew that their product was being seriously overhyped, but priced accordingly.

That bubble burst a few months back, and we're back to the reality of user created content and locations being the main draw and reason for the continued existence of LL.

Hence, the prices drop.

I'm conflicted. The only way for me to become engaged in SL again would be to own my own island. The buy-in price is reasonable again. The tier... Well, It's cheaper than some of my vices I've quit lately, to be honest.

I just wish I trusted LL. That'd seal the deal.

There's always the possibility they'll earn my trust back. That will likely happen sometime around the time pictures of Joshua and Adam doubleteaming a girl appear on the web.

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Dnate Mars

I have wanted to own an island for a long time. The entry point was always way to high for me. If I can just get the monthly tier, I think I maybe able to jump into the island ownership.

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Lexxi Gynoid

Dang . . . I finally figured that out "VWs" . . just putting it into context and I finally get it. I was confused why I kept glancing in the threads and seeing mention of Volkswagen. Virtual Worlds, silly kitty, not Volkswagens.

Lucifer Baphomet

Your logic is impeccable, Mr. Ming.