lets bring the linden back up!

Actually Ace, I Hi-Jacked the original purpose of the thread, and it is more of a why the L$ is in the tank rather than a whine that it is declining...

Ive seen your posts on the GOM board, you have a lot more market savy than I do, I would be curious to see some of your input on it as to why it's going down so drastically.

Well the point of my theory is that there is too much curency being "minted" and no place for it to be used up.

The only two solutions for said theory are : Either add more places for L to be removed from the economy, or stop adding it in systems that are broken.

If anyone else has some sound theories / solutions I'd like to hear em... Extra credit if you use zombies! =D

Fear me! hehehe. I think your theory has some merit Siggy, but I think it had a lot more to do with a ramping up of the community growth rate and it taking LL a while to get to where they can release land fast enough to keep up with the demand. Now that those two factors have evened out the L$ has dropped back to where it had held steady before the land crisis. We're not up to a truly content driven economy yet but it's definitely where we need to go. I do think scaling back on the dole is a good idea. I also think people need to be less shy in pricing their items or charging money in the first place.

Ya, I definately understand the need for money drains. That's a very important factor for any economy that has magical money.

As I suggested above adding more special services that dont bring in more money, but are usefull and expensive would be good.

Things like image uploads and advertising of events and stuff is a good start, but some much more costly services that arent part of a product or service that earns money might be good. What about a charge for streaming music? I would probably spend money on that to have it at my house.

Like I said, Im still fairly new though, so I dont know what it is that people would pay for that would be usefull, but not bring more money in.

If people tipped me for making them smile when I see them or everytime I made them say ROFL!!! Then I wouldnt mind getting rid of the bonus, but I just dont have any other source of income.

Three cheers!
Yay for Ferran saying everything I want to say, only better,
Yay for Chip always having a good point,
and Yay for Ezhar telling me how to add someone to a forum ignore list!

I agree pricing is to low on many things, just because once they have one they can make amillion copies for nothing.

Its really quite simple, from my point of view. The L$ got driven up by two factors. One was the runup in land prices over the summer, and the other was that IGE was indiscriminately buying L$ at inflated prices. These two factors pushed the L$ to artificially high levels.

Then two things happened. The Lindens brought in a ton of land, bringing land prices back to where they were, and IGE stopped buying.

The two factors that kept the L$ up are now gone and so he L$ is just heading back to where it belongs.

Markets such as GOM are driven by two things... fear and greed. As the L$ is coming down, fear is starting to take over in some, and there are sudden moves to unload L$. I would imagine that those that are in the land re-selling business are getting especially squeezed, as they need US$ to pay land-tier.

The market will bounce around, sometimes violently, but I imagine that it will eventually settle around where it resided for a very long time (before this summer's runup), which is around US$4.20-4.40 per L$1000.

- Ace

P.S. Don't worry about the money supply. The Lindens have committed to growing the number of L$ outstanding proportionally to the growth in subscribers. If we get 20% more residents in a month, then we'll get approximately 20% more L$ in circulation. While I have my own issues with dwell (why incentivize activities that lead to lag by putting too many AV's in the same place at the same time?), the effect of the dwell bonus on the currency is NOT one of my concerns.

I'm rich filthy rich muahahaha

If dwell were to stop, during the transition to any new system anyone who stays afloat / profits from it would be hurt and likely would close shop just further injuring the system. It needs to be done in baby steps, as to allow assimilation into a new system. I like the idea of charging for admission that could counter dwell loss and not make the land owner have to watch dwell and report any loss to LL. They would be prepaid and take one more feature out, I think dwell should stay only in the form of popular places not for $$ bonus (well maybe the US $ bonus for top 2% that would keep people trying and not involve L$) also I have read that they are working on an overhaul for the rating system already so I don’t think we should even comment on the current system much we would be spinning our wheels. There were many good points about the overflow of "vapor" cash. We need to be a more internally run system not waiting for our master lindens to pay us. Also to answer your question about why the L$ is dropping, its simple FEAR. Fear is a driving force, if you see the value drop you fear you will loose money, so you sell. The overwhelming number of people who were struck in the face by fear dump their money further provoking more fear. It’s a vicious cycle. Also the way GOM works you sell for whatever price you decide. This means if you want to sell your L$ before the next guy you price it .1 cent less and its at the top of the list you get all the fear stricken people doing that and its easy to drop a dollar or more in this case. If people decided to set a number no less then ________ the value wouldn’t depreciate any further and everyone would be forced to purchase at that value. That won’t ever happen. I like IGE's idea of setting a price, it offers more stability and gives me more faith in the exchange rate. If you look at the economic stats the value in items being bought is fractional to the entire market exchange of L$ most is from land that continues to be let out as if there were some type of drought. I dabble in just about every market, land club, mall, and items. The land is so available and so cheap esp. with the drop in l$ that many of the auctions have 1 bidder - our favorite land angel. I think if they offered less auctions and more L$ ones the amount of l$ in the market would decrease but we do most certainly need something to take it out of the system in general as well. If we aren’t spending it we don’t need it right?

Well it's good to see new people taking an interest in current events, very refreshing! =D

An economy is is a fragile living breathing thing JUST like a Zombie (except for the living and the breathing part)

(okay theory part)

If you tax image uploads, prim creation, land tax etc that will have the opposite effect of the down spiraling economy. It would put the burden on the creators and they in turn would have to raise prices and the L$ would go up for quite a while, at least until people stopped playing, then all that would be left is a handfull of content designers up to their necks in high priced crap with no community to sell to.

Inversely, taking away Dwell / Rates will make people poorer on the whole and could have a similar effect. Not everyone wants to have to buy L so there has to be some way for them to get it. (Stipend, and saving just like RL but without having to work)

needs to be a balance someplace.

I get maybe a max of 15 rates total for an entire week because I am busy designing stuff and can spend thousands of L$ in uploads in a single day! (I blame Poser) My stipend doesnt cover my upload fees by a long shot. this is why I sell stuff, to cover upload fees.

And, as Chip said

The economy is headed towards player driven, the system isnt there yet. but hopefully by SL 2.0 patch.

Second point Chip brings up. Do developers need to charge more? POssibly. What we create is art, you decide your value and time investment of the art you create. Take fine art for example, buying a print of the Mona Lisa isnt cheap, buying a poster of it is, and buying the original... well, good luck. I have had a lot of people argue with me about the prices of my designs, my responce to that is.. "Well don't buy it." It's quite insulting to have someone tell me my work isnt worth what I value it at. (whoa, sorry got a little ranty at the end there)

Ace, does that take into account all of the L$ being hoarded right now? I know IGE is sitting on like 10 million L$ all by themselves.

also thanks for the good info you all have very good points!

I agree that content is king, and creating a product or service that is in demand will cause the L$ to go up. When there is a high demand for something, people will want to buy it, and they need L$ to do that.

So, here's my dilemma. I want to help the value of the L$ go up, and our business is doing quite well right now in volume sales. It makes me wonder if our products sell for too little. Basically, most people who come to our shop and see a demo of our dogs, walk away with one. We get a few people who say "that's a little expensive" but still end up buying one.

We sell each dog for L$400. The dogs can learn tricks, each of which costs anywhere from L$50 to L$150, or L$800 for all tricks together as a package deal. Most people buy a dog and the ALL TRICKS package, for a total of L$1200. That gets them a fully trained pet.

So do we go for volume and keep prices where they are? Or up the prices, creating a higher demand for L$ from people looking for pets? Or maybe create a new, more expensive line of dogs...not sure.

For now, I am leaving things as is. But if the value of the L$ continues to fall, I may have to increase prices. Time will tell!

We can’t forget this is a game, I am basically new myself only 3 months old go me! But when I started spending 20$US on a game was a bit rich for my blood, and I would think many new and current users don’t want to spend a ton of RL money for virtual goods which have no value, esp. if they cant recoup their loss. They want to enjoy their playing experience and waiting a week to get 200$L isn’t fun when you go buy one thing and your poor again. We need more ways to increase landless residents income to match the prices of the market, skins are 1k for simple ones that’s 5 weeks for 1 skin, who wants that? We need more support for employee / employer to raise the amount of money any resident can produce. It’s hard to charge more, or raise prices even if they need to be higher, if there are problems paying for them as they are. :/

WOOO cool! THat is an evolving economy in action, pretty cool to see, raising prices is a direct reaction to a devaluing $

and something we should all be thinking about.

And, btw, the dogs rock!

Have any Zombie Dogs?

Driftwod Nomad:
So do we go for volume and keep prices where they are? Or up the prices, creating a higher demand for L$ from people looking for pets? Or maybe create a new, more expensive line of dogs...not sure.


create different qualities, or levels

like the basic pet, which can do 1-5 tricks for the lower income players
premium pet, better looking all the same tricks as basic, + some
elite pet, you get the point.

create products to sell to everyone at any level of intrest. we might need a sliding scale for products so we dont eliminate potential customers.

lol hi Ferran Brodsky we are cross posting we rule! my reply below

you said:
IGE is an antique, they are not a market, they are an L$ holding company, They inflated the value of the L$ when it benefited them, and when it didnt benefit them, they closed their doors. That doesnt sound too stable to me.

i say:
i am talking purely on a basis of stability on a whole. prices are fixed thats pretty stable (well fixed as in not player controlled) but they are in it for the $$ so... but i wouldn't contribute them as much for the loss in $$ as GOM. they only closed their doors when they got flooded with L$ as the decline began and they had the best value ratio.

Ferran, thanks for the comments....and no zombie dogs yet!

Trifen, well we kinda have multiple spending levels now. Anyone can buy a basic dog. Comes with 5 "tricks" built in. The people with more money can opt to buy more tricks. The beauty of this is that anyone with a basic dog can save up to buy tricks later. And we keep coming out with new tricks...so a constant source of income from existing customers.

But we do plan on having some "special", more unique items in the future. Perhaps auction off a "one-of-a-kind" dog, or have limited editions that are more expensive. Maybe this can help bring the L$ back up a little.

anything unique and exclusive sells,.. have a vendor which sells 20 then dies. You are ahead of me, I retract my statement GJ!

I've been tossing an idea around in the mostly-vacant space between my ears for a few weeks now, and this might be a good place to spout it out:

Ok..money drains, and ways that non-scripting, non-clothes makers can earn a buck. I've wanted to do theater in SL for quite some time. I know it's been done and almost done quite a few times in SL. But say I get my act together and really pull it off right. So I build this hopefully lovely theater, I have this great team of actors, animators, costume makers, set designers, and we kick ass and really work hard at making each performance something worth seeing. Possibly even write some original plays and invite others to use the theater for performances. This idea could be carried on to other venues such as musical performances (concerts in the park), comedy clubs (I know there is at least one already) and even magic acts or sitcoms..

Now there is a cover charge option under events. I've never, ever even been tempted to use it. But when i picture a night at the theater, I can envision folks needing to buy tickets and recieving a lovely program and admittance for a specified time (cover-charge). Would people find this objectionable do you think? Say the ticket cost for one performance was anywhere from L$10-L$50, depending on length and work involved in production.

Cover charge is hardly ever utilized, with reason, but I can see cases where it would be the only option for at least gaining back a small portion of your investment, but would also make sense in a the realism sort of way. Theater tickets on Broadway cost a bundle, and tickets to concerts, comedy events, festivals and amusement parks and other such entertainments are far from cheap. Hell..most clubs and stip-joints charge a cover during peak hours in RL.

Anyway..just a rambling thought. Cover charges..good? Bad? or just plain Ugly?

hehehe

Trifen... If only we could get people to set the market value at what.... umm _I_ value the L$ at hehehe

oh well such is the way of the free market...

But if a group of L$ holders were to incidentally set prices to ummm say.... 1.25 I wouldnt complain

=P

David, I think it's a great idea, certainly performance acting takes long hours of work.

I say experiment with it and see how it goes. However with the current system you will be running against many free events that give out money.

So it would be hard to say, I cant recall very many events that actually use the cover charge option in events.

Also there is the option of parcel admission.

I think having a running show with several perfomances is the way to go (ala Broadway), admit small crowds to the performance several different times. keep lag down and performance quality up, and get repeat audiences to shows.

Certainly another worthwhile social experiment.

I know there has been talk of simulcasting RL music performances recently....

David, I would have no objections at all to paying a cover charge for a production. It's an excellent way for someone to make L$ without actually building or scripting something. What you would be selling is entertainment, and people pay for that.