Discussion Thread - Details on the Q2 2008 Island Price Change

Further Discussion here: http://www.slexchange.com/modules.php?name=Forums&file=viewtopic&t=45513

slx censors and is in bed with phil.
clicky

I think that the price to buy an island should not be reduced at all, in fact, they could raise that price to keep the real estate within SL going and more stable.

The reduction should be on the tier fees paid. They should make all tiers equal no matter when you purchased it - either by raising the grandfathered tiers or reducing the tiers to meet the grandfathered tier amount.

Grandfathered in tiers really only helps one person - and we all know who that is - the woman that has all the real estate and is now making 10L items which are hurting the economy.

I can fully understand that prices for full sims go down. I think we were all expecting that. Many have compared SL to the Internet and it makes sense to look at it that way. Setting a website nowadays costs a lot less than a few years ago. The monthly hosting fees are MUCH less than they used to be. However... These prices did not drop overnight.

The other comparaison that is even more important for me is the "business environment". There are crashes in RL. In financial markets. In real estate markets. However... I do not know of any government who have WILLINGLY DECIDED TO CREATE AN OVERNIGHT CRASH FOR ITS CITIZENS, which is exactly what LL has done this week.

There is a lot of discussions on/about people who have/will/might not buy private sims. But... This week's announcement had a series of drastic measures that have slashed the value of mainland land even more than private sims. Everybody who owns land in SL has lost a lot of money this week. Even if you are not a land dealer, your land is worth a lot less, no matter where you are. We've seen the same thing in RL - but it was for various economic reasons, it wasn't because a government suddenly decided to ** all of his citizens overnight.

By their role in Second Life, Lindens are our "government" ruling our "society". They invite us here to "build a new world"... Yet, they behave like a totalitarian government that has absolutely no respect for anybody trying to run a business in Second Life. None, whatsoever. And they take decisions that look like a game of yo-yo. Or, else, they have no idea how a calculator works. Or have no idea on even how to spell the word "economy". Or they just like playing yo-yo in their conference room without any idea of where they are going.

They could have achieved their goals of price reduction in a responsible manner over time. It was fairly easy to figure ways for the SL economy to adapt. Instead, they've chosen the approach of "let's create a crash - it might be fun to watch".

Either way, this is the equivalent of trying to run a business in a third world country and the local dictator suddenly decides to kill your business. There's nothing you can do. Foolish of you to trust that dictator! Forget about your losses and move on... To another country!

I believe in Web 2.0. I believe in 3D Internet. ... or however you want to call this virtual world we are in. But I sure hope somebody comes up with a real business plan and get it up and running. I wouldn't bet on LL being the winner in that race. They seem to have absolutely no clue about where they are going, what they are doing, and the impact of their decisions!

Actually... I usually pay the same price for my laptop, every year. I just get a faster, better, more powerful laptop with more guizmos on it. Why? Because the computer industry is smart enough to try to increase sales.

When does Intel drop the price of an old chip? When they have a new one on the market at a higher price.

So... It doesn't apply to SL. And it's certainly not the way LL has been doing the marketing of SL.

SL, I invested a lot of money into this game, paid the now, older sim set up fee's. I was here to help this SL world grow, I invested my money, I supported SL when you jacked up all prices from the former sim set up fee's and tier fee's. Yes, I have 2 different tier payments, but that does not change the fact of the money spent to buy the sims I have now and the dramatic loss of my sims value. Where is the SL support, the thanks, the appreciation to those that have been here and already spent the money to help keep SL going. What thanks do we get for the many years of our financial support to SL.. ""here SL user thats bought sims, bend over."

SL, I truely enjoy what you have going on here , in this SL world you created and its obvious. But you're forgetting about the people who invested the money to help keep SL alive, paying your outrageous prices. Now you lower the prices on those that have been here, supported SL and bought the sims at your former sim set up free's, giving us no oppertunity to at least make back the money we've spent on the sims we bought, when we do eventually deside to sell our sims. SL, you have no real idea how hard it is to maintain these sims and try to come close in breaking almost even with paying the tier fee's. SL, ya took away our last oppertunity to have a piece of mind when and if we sell our sims. I can live with the fact of the high priced tier fee's. I pay my bills, for the lil over 2 years I have owned my sims. What really sucks, even if I was that upset to the point I wanted to leave because of this. I would be screwing myself even more. I dont want to sell what I have invested in, I enjoy my SL hobby. But come on SL, dont give the long term supporters the shaft, do something to show your appreciation and gratitude to those that have been here and financially helped SL grow.

SL, ya just took an additional 2K$ outta my pocket, and this time I have nothing to show for it.

Godspeed

They Don't Care

Right, just like the people who bought a 2007 Mercedes for $30,000 are complaining that they're out money when Mercedes drops its prices to $28,000 for 2008.

It's really not the same Oryx, well it is but that's not the way it's sold. They sell it here as virtual land. Indeed Philip Rosedale in a channel 4 news interview when talking about land ownership said something about the proof of ownership being the ability to resell, implicitly implying that there's an asset value to the virtual land one buys.

The 2008 Mercedes is a newer vehicle than the 2007 version, everyone knows cars depreciate with age (except in some vintage markets). The same wasn't implied for virtual land.

LL haven't launched a new version of server, which would indicate that older sims were depreciating with age and people could see then a different level of performance to value worth. They've done that previously and balanced it out with tier costs to keep older sims at an asset value similar to newer sims.

Of course now, the situation very much is that LL do not value virtual land itself as an asset. They should be more honest about this, they should indicate quite clearly that this is the gameplan and then when they reduce prices again, which they quite clearly will, a lot of this moaning about devaluation will be avoided, because the asset value isn't one LL believe in and they shouldn't lead their customers to believe that either.

You can NOT rely on Linden Lab for customer or developer support.

Typically, investment in SL is low yeild and high risk and won't get better until they're forced by regulation.
To think otherwise is naive and idealistic.

And yeah, they got me for $750 in January... so naturally I think that compenastion should affect the previous quarter. But in truth all that happens is my love/hate relationship with them will take yet another turn toward hate, and it'll stay that was for a long long time.

It reminds me of that crab fishing show, except more crab fishermen know what risks are involved and can do more about them.
Hmm really more like gambling in vegas I guess. ... except they tell you what he odds are ...
hmmmmm, growing food, and we're the tomatoes?

The way for the Lindens to fix this is with a two month tier holiday for all existing island owners of 1675 sims and a one month holiday for those with 1250 sims . This nearly makes everyone whole. Yes I understand the ups and downs of markets, but the market price here is entirely arbitrary since there is no limit to the land they can make. If they want to simulate an economy they need to create limits so that prices will fluctuate on supply and demand.
The real impediment to growth is the 295 a month tier. It is a much more significant friction than the purchase price. Are the Lindens not now creating a virtual form of the sub-prime crisis? Easily available land with a LARGE monthly cost that will bite buyers later?
But I have another nibbling worry. The announcement says that islands will be placed instantly when ordered. That sounds pretty cool, but along with the new open space sims I wonder what are the actual server arrangements. Will these new islands perform as the current ones do? If you buy an open space sim are you shackled to other users on other open space sims on the same server? Are we perhaps getting worse service along with a lowered price?

At any rate I would urge us all to write the Lindens and support the Tier Holiday idea. Let them feel our pain in the only way that matters... by having some pain of their own.

Samos.

Isn't LL planning on going public at one point? If so, they need to have lots of "subscribers" with high "subscription fees" to sell their story of "future profits".

It's like in the cable industry... The number of subscribers is a key element of the value of the company you are looking at buying.

In the case of LL, the number of subscribers is the number of people owning sims and the subscription fee is the monthly tier.

So... If they are planning an IPO and want to sell shares of LL (and all of them get rich quick), they need lots of subscribers with high subscription fees, right? What would they do to reach that goal? Drastically reduce the price of sims (on mainland and private estates) but keep the subscription prices (tier) high. No?

Who cares about the impact on us, as long as the price of their shares go up in the short term? Good for them. Too bad for us.

I think that there would be just as much wailing and gnashing of teeth if LL had RAISED the price of islands.

I'm just glad I'm not Jack this week.

People complain when the prices go up, people complain when the prices go down, people complain when the prices stay the same, people complain when LL gives notice of said changes, and people complain when LL gives no notice at all.

LL definately has issues to solve but dropping prices is not one of them. People who purchased islands for $1675 decided at the time that this was an appropriate exchange of money for a service. LL has offered to cancel recent island orders and readjust islands delivered in the recent past. This is akin to Circuit City giving you a refund of the price difference for a TV that you bought last week which has now gone on sale.

That TV will devalue over time as new models come out--same for islands bought in SL. Do your research before buying expensive things/services.

Look.

Go buy a brand new 2008 Toyota Prius right now in 2008. Say it cost $30,000.
Next year, buy a brand new 2009 Toyota Prius in 2009. Say it cost $28,000.

What are you gonna do? Go cry to Toyota because they lowered the price on the Prius? No. Toyota can do whatever it wants. It makes the cars, it sells the cars. If it wants to lower the cost on the cars, so be it. It's the exact same thing with private islands in SL.

I don't exactly think most estate owners thought they were buying TVs or Toyotas when they purchased based on history. Kinda makes for a bad comparison IMHO...

If I were an estate owner this would probably upset me. Its like the idea that the house I built in 2004 is now worth less than what I paid to have it built thanks to the wonderful US economy. When I bought I certainly didn't think that would happen.

Just wait until tier goes up in Q3... the cheaper SIMs won't seem so great then..

Well no, the analogy would be Toyota selling a prius in 2008 for $30,000 and then selling a Prius in 2009 for $18,000 and you know what, if Toyota did that, people would complain, from those who purchased the 2008 model to a whole network of Toyota dealers all over the world.

People would lose faith in the Toyota brand, cars do not depreciate by 40% a year.

...except that we did not buy a TV so I don't understand what you are talking about.

Let's make it easier for you to understand. Let's say your government invited you to come develop a new area of the country and convinced you to buy land - and even told you that it was a great deal and that you can resell it. Then, a few weeks later, they decide to sell the land next to yours at 40% off. You would still think that it's like buying a TV? You would be all happy with your government and vote for them again? I don't think so.

Or let's say your cable company convince you to buy a subscription with an initial huge high fee but tells you that you can resell it. That's exactly what LL has done - even on public TV. Then, they decide that they will cut it off. Not smoothly, well planned and gradual... They just cut it off drastically. So THEIR promise that you can resell it is... False! They control the prices. If they knew their plan, then they lied to us. If they did not know it and improvised suddently this week, then it's... A strange way to run a business!

Of course, this is not a democracy. It's a private world and that "government" does what it wants with its world (which they have the right to do). Too bad for those who trusted them.

And... Once again... Most of us are not complaining about price reductions. They were expected. However, there is a lot to be said about the cowboy way it was done.

Long live the technological far west!

Apple lowered the price on the iphone and the backlash made the national news, with all the unhappy customers.

Apple also ended up offering a $100 store credit to *everyone* who was affected by that but not covered by the 14-day refund policy.

A sim is quite a bit more expensive than an iphone, as well.

Apple lowered the price on the iphone and the (significant) backlash made the national news, with all the unhappy customers.

Apple also ended up offering a $100 store credit to *everyone* who was affected by that but not covered by the 14-day refund policy.

A sim is quite a bit more expensive than an iphone, as well.

So you think the land should be like RL land because it was sold as virtual land and not services on servers and yet...

If it is land what does it matter about the servers that make the land possible? You got land and that is all you need to know.

Let me put it another way. If the value of land is linked to the price of servers then yes you just got depreciated but you only felt the effects now - it was depreciating all along.
However if land is a thing that responds to the market and its ups and downs then you did not get depreciated, LL just simulated a market devaluation and rebasing which is a perfectly valid thing to do on a simulated world with a simulated market. Markets do go up and down normally for the most part due to supply and demand. The only reason why this does not happen much in RL is that land is always a finite resource and so tends to increase over time. If that was not the case then the RL land market would go down as well as up. There was a time when there was such fluctuations due to land being perceived as abundantly available. Not so much in our globalised era.

LL chose not to simulate the scarcity of supply part and have opted for fairly unlimited expansion instead - easy to see why. After all you put in an order for an island to be delivered - you didn't have to wait until another resident was selling to get one, but nobody complained about the artificialness of the supply then or that having an island delivered was not very realistic of real life or the real life land market.

Just saying...all this complaining is unjustified...the claims people are making about LL cheating them and ripping them off - its absurd. LL are doing what they need to do to remain profitable just as any business would and if you all are really investors then your investment just got more stable by them doing it - how much is that worth?

Since you say that the complaining is unjustified here is one question for you: Do you own sim(s) and feel fine with the price changes?

If not, what justifies your point of view in saying how sim owners should feel about LL?

This isn't the first time Lindens have played dictator and caused thousands of people to lose money. The gambling fiasco caused banks to crash and ended up causing so much money loss to residents in SL. That is still not settled as I see full fledge advertisements in events every day, all day/night long for gambling which makes one wonder who is paying whom to permit this to go on?

I agree, this is being treated like a dictatorship with no concern over any kind of fairness. I wonder who is kicking back to the Lindens to get them to do this?

Whenever there is this much of a drastic step - history has usually ended up revealing that there was something going on behind the scenes that was not only unjustified but also not on the up-and-up.

I am not telling people how to feel at all. However coming and making claims of being ripped off are unjustified. That is my opinion, take it or leave it. I feel fine with the changes, I don't own island but I do own mainland which is also being devalued, and it is unlikely I will make my money back should I decide to sell. Do I care? No, because I am getting benefit from my land and I used disposable income for my entertainment to buy it. I could have chosen to wait until the deal was better but I decided not to because I wanted land to use.
This is no different from anyone here except for the amounts that are being talked about and the type of land in question.

Bottom line is - Nobody said when you bought the land that it would hold its value or increase in value and it has not. You got the deal you agreed to and paid for and now to complain about being ripped off is absurd as I said - in my opinion.

hahahaha, wow, really??

fairness? what is that and where was it promised to you?

what is going on behind the scenes is LL's desire for profitability, and clearly this is how they think it will be achieved.