Differences between Grandfather and Normal Island Sims

But they fit four on a server.

No, they are 4 per core. 16 per server. And they are actually a couple of dollars more expensive than the old openspace sims. They lost nothing, and gained a few extra bucks.

16 openspaces per server X (1/4) price of regular sim = 4 regular sims per server.
LL makes the same amount per server with openspaces as they do with regular sims, and as Cristalle pointed out, with the slight price difference, they actually make and extra $20 per month per openspace server.

Openspace Server - Regular Server = Difference
(16x75) - (4x295) = $20

Absolutely agree, sir.

Krispy Kreme doughnuts. Unstoppable business model - until it wasn't. Seen it time and time again in just about every industry.

There aren't any survival guarantees. But there are some known stupid moves. One stupid move would be to remain far more expensive than a competitor could afford to be.

Usually what happens in that case, is the competitor smells the profit margin and charges 90% of what you do - still 'cheaper' - but if they decide to own the market, watch out.

It makes sense to be as reasonably low cost as possible regarding land tier &c.

The big cost is the engineering innovation, the marketing, the initial customer education. This is why openlife can copy our grid pretty cheaply, not the other way around.

I heard once that a free SL account used to be cost roughly the same as what it cost to produce an Apple ][ in the early 80's and give it away for free. And I believe that, onsidering the venture capital initially required, the engineering staff, the low populations we once had.

Noooo! for my 40 MB Apple ][ in 1990, with 21 in screen A4 256 greyscale scanner and printer, with Version 1.1 QuarkXpress, Version 1.2 Freehand, a few fonts I paid £15,000.

This is very true but when Zee arrived tier for an island was $195 and he decided that wasn't enough to make profit and rose prices 50%, there is nothing that says they were losing at that price, the increase gave them wiggle room, a sensible position for any company to be in.



No the Openspace cut was a consumer cut as was the island cut, both designed to spark consumer interest. People were still buying islands and Openspaces at the old rates. If the tier fees are as close to the line in terms of profitability as has been suggested, this would have been one hell of a risky move. You used to have to buy four openspaces, now you can buy one, that's a move designed to spark consumer interest and it clearly worked.

The decision Linden Lab took was that lowering prices would generate more revenue and it did have an implication for their costs because they were making more money per island prior to the price cuts.