Why is the upfront cost of private islands so high?

I am currently in the process of moving SLuniverse to a dedicated server, and it has made me wonder about the pricing of private islands in SL. To move SLuniverse to a dedicated server with the following specs - 3.4 ghz P4 chip, 2 gigs of ram, 120 gig hard drive, Windows Server 2003, and 1.5 TB of monthly transfer, I am paying $149 a month, with a $99 set up fee. That setup fee would have been waived had I entered a 2 year contract, which I decided against. The server is mine to do with as I please, and I have full control over it down to the Cisco firewall settings.

Contrast this with a private island, which is essentially a hosted, dedicated server. You pay a $1250 setup fee and $195 monthly. You don't own the server - if you stopped paying $195 you would lose the island, though you can resell it and transfer your account. It appears the servers are not even dedicated, as they run more than one island on a server. This begs the question: what on earth is the $1250 for?

Supposedly, it's to ensure a risk-free deal for LL. It makes sense if you consider that SL sims have very little demand compared to web servers and that LL is a tiny company that isn't even profitable yet. When you're a big webhost moving orders of magnitude more servers than LL is, the impact of keeping around a pool of empty servers becomes negligible.

Software license fee.

The software license fee on the servers you are getting with the dedicate host probably run into 100$ range (bulk discount on windows servers..)

Your dedicate hosting company doesn't have to pay to develop any software, they just do operations.

SL develops the software and does the operations. Since billions of people aren't buying SL licenses, they can't really go nuts on the bulk discount.

As it is, it is unlikely they are breaking even.

It would be interesting to hear how much bandwidth consumption these babies consume, as well. I suspect some servers, such as IceDragonPlayPen, probably consume more bandwidth then they pay for.

Which software license fee would that be? The servers run on Linux, yes?

Hehehe.

Like I said, your serverbeach / ev1 servers dedicated hosting company doesn't have to pay to develop software.

It's costing LindenLab proably around 250K+ / month to develop SecondLife.

Given the 2 years its been doing it, that's about 4 million or so in 'software licensing fees'.

Plus there is probably a fee for havoc as well. Not sure how much that is.

The simulator? Plus I imagine LL is paying something to Havok?

Still, i'd really love to know the average monthly bandwidth consumption these babies take up as well.

Any guesses?

Anyways, you can resell a simulator, which is a HUGE bonus. I don't know any other software companies that let you do that.

Ok, then what is the $195 monthly fee for, if not to cover the resource usage?

I suppose if they are paying a per server fee on Havok, that might apply - however, Havok is generally licensed by the project as a flat rate. LL is charging a licensing fee to have your own sim? The story has always been it's about the hardware, not the software.

I suspect 195 / month is lower than it should be.


My guess is that these servers consume a lot of bandwidth. My guess is 3000-10000 gigs a month.

Most 150$ / month deals are for ~2000 gigs per month.

Havok is negotiated based on how much money they can get without forcing you to go to a competitor or developing in house or just not doing the project and not undermining other projects that will pay you money.

Simple as that


I suspect that havok was negotitated on a cpu basis. That's usually how big projects like this are done.

Though, who knows. Maybe this is why havok 3 isn't coming out.

Maybe havok was negotiated on a per project basis and now havok won't give LL an upgrade unless they pay through the nose!

Ahaha, that might be it. Those clever havok people..

And the more successful that LL is, the worse their bargaining position becomes.

I guess LL should start trying to build this stuff in house. Or find a competing architecture.

Is there a competitor to havok?

We should start up a reverse engineer SL's business model group.

Phillip's new BMW...

Not really, just kidding. You seen the price for a rack mount quad-Opteron? About $3000-$4000. 4 sims per server is $5000 then you have to pay the people to hook it into SL without it bringing down this house of cards. They are located in San Fransisco so the labor prices are likely to be twice that of anywhere else in the nation plus LL has to keep its employees as they are uniquely skilled.

Your server is about $500 and its price is figured into your monthly fee. Plus, if you stop using the service its no big deal as there are lots of folks looking for internet hosts. Your server only has to be physically hooked up and made sure it will log on the network, you take care of the rest. LL has to set up its proprietary system in addition to installing the box.

God no. The more I think about it the more terrified I become that it won't be here in six months.

I don't think your going to come up with any satisfactory conclusion. Personally I think the value of a sim should decrease. As the hardware running the sim begins to depreciate in value and performances. It's the same reason that I don't think land shouldn't be auctioned. It's just space on a server.

I'm sure the 200 dollars a month, cover the cost of band-with, power, storage and cooling. They're a company, they're subposto make money. They couldn't stay in bissness if they were under selling the monthly rent. I could imagine it's pro rated. The average cost of band with used per month per sim. But I highly dought that.

The 1,000 was directly proportional to hardware, back when each sim was a separate computer. The money for hardware can't be used to 'substitute' rent. For the same reason they can't do that in real life. Eventually the money would be spent, and they would be left with some one paying less then the value of the unit. And each month after that point, they would begin to lose money.

Now that sims are virtual, and free floating over the servers. It would make more sense that the hardware couldn't be returned. Because the money may not cover the full price of one computer. But some one like ashy chun, who owns many sims, could deffently argue the original point.

It's not all bad, they did leave a way for sim 'owners' to recovery the enishal investment. By paying 200 a month, for a hole sim, it is posable to rent the sim out, and make a profit. The smaller the rental lots, the more they make. Even if they just rent out half the sim, in one large chunk, they still make 200. That's anuff to cover the monthly cost of the sim. Or heck rent both half for 200, and then make 2,800 in a year. Witch is more then anuff to cover the original sim price.

I asked that question in this thread but never got an answer.

The bulk of it would be textures being uploaded to the clients from your asset system. That cost would likely run into the upper-to-teen-hundreds per month. However, one person could license that software and resell hosted asset service to several people with several grids. The system still worked pretty well when we had as many as three-hundred sims on the mainland plus a few dozen private islands.

I agree with Cristiano that it sounds overly expensive.

I've been running web sites since '99. I currently lease 2 dedicated Dual Xeons for my sites, each with 2 GB RAM, 2,5 TB bw and 2x73 GB disks. For this I pay just below USD600 per month (for both servers combined), and there was no setup fee. We're talking servers that easily handles 500+ concurrent users each, with complex database queries..

Man, I would kill to have a sim running ALONE on a dual Xeon. I would be willing to pay considerably more than 195 per month for a server that can actually handle some traffic.

I'm never going to cough up 1,250 + 195/month for a server that lags when any of the 3 other sims on it has traffic. It is a lousy deal IMHO.

Cause the market will bear it...

I think you guys are all wack.

The only question I have is: why aren't we paying MORE?

I have a hard time seeing how LL can afford to do what they're doing at these prices.

If the cost for a sim was $100 - $150 a month can you imagine the number of additional sims there would be? I'd have one ASAP if it was in that range (esp if closer to $125).

You know, I think you definitely hit it on the head when you called it a licensing fee. I'd say the private island is a "premium" luxury item used to subsidize development costs. With that in mind, it kind of does beg the question: Why aren't we paying more? Surely with all the new developers being hired on, plus the looming spectre of 2.0, this enterprise is not getting cheaper.

Then again, the market may be better able to bear the current prices. Sure, LL could charge 1.5 times what they do now, but do they end up with 1/3 of the sales?

If this is all true, there's another reason why we won't see a decentralized, roll-your-own Second Life anytime soon. Gotta grease the gravy train!

It's an interesting discussion to have. I've wondered a few times if LL is missing the sweet spot on the private islands. If the cost were just a little less, I could see many more people buying them up. With that said, though, there's more than just the upfront costs of the servers and bandwidth. There's also stuff like support to think about. The pricepoint may be where it is to maintain a sweetspot for LL itself -- one where it makes decent margins but doesn't have an enormous support burden.

The part that confounds me the most is that I could go buy some more land and tier up and get to a full sim's worth of land... and then only have to pay the $200 per month. I for the life of me can't figure out why I would want to first get whacked with $1250 (more than I paid for the car I've been driving for the last year and a half, BTW) just to get the estate tools and to have my land not up against anyone elses... Just me personally, of course, I'm sure people want privacy, ect, ect...

Privacy, control over topography, customization of land textures (right?), ability to set night and day cycles, and a few other things, I'm sure.

In short, luxury. All about luxury.

Thats called Profit.