Land Prices?

I'm of the view that tier is too expensive.

I say this because very few can "play business" and actually break even, much less make a profit. Sure, some do, but many (most?) don't. Put it this way. Land purchase cost can be seen as an up front investment, and can cost whatever. If you are able to make a profit every month, you know you will eventually recover it. But if you can't be sure you'll even cover tier (an operating cost), then why would you even try?

The potential for profit in SL is rather modest compared to the fixed operating costs of tier. Tier is proportionally too high.

Sure, people choosing not to try to create a business isn't the same as people leaving SL, but it sure does suppress innovation.

The current LL pricing model really leaves the weekend entrepreneur with few choices.

Ah and here we see a tradeoff for LL. Discourage speculators who pay less tier per sqm, thereby having people at lower tier levels own the land? Or encourage speculators who, although pay less per sqm for tier, drive land prices (i.e. auction prices) slightly higher?

What a dilemma...

Yes, and there's the rub.
If the bubble bursts, it is the flippers who will want to dump land at whatever they can get. If there are not enough buyers to take on tier even at dump prices, they may even abandon the land rather than continue to pay tier.

People like me, who hold land to use it are not directly affected by any price crash.
We continue to pay tier to LL.
LL would suffer as they would be running servers on which some proportion of land would not be earning tier.

This is exactly how I see it, Sling.

And it's why I don't oppose flippers in general, but only oppose them acting like LL should set policy that favors them.

LL only get a once-off hit from the auctions.
Thereafter they earn from tier.
Someone with a tier of sim pays them US$195 per month.
Break that sim into say 42 individual 1536's (free 512 plus 1024 tier-payable). That's US$336 from a sim area per month.
Break it into 64 individual 1024's (free 512 plus 512 tier payable). That's US$320 per month.

From a continuing business point of view, US$1000 extra up front could be less significant than an continuing differential of US$125 to US$140 per month.
If land prices are lower and more end users buy land, LL could have a greater chance to earn that differential.

Ya know, everytime I see someone whip this statement out it's sorta like an automatic a**hole indicator light.


Oh. Did I say that out loud?

I'm sorry but it is unreasonable for you to expect people NOT to act in their own self-interest. Take your issue up with LL.

Edit: also, I'll refer you back to the post where I said that to LL, land 'flippers' are end users. You seem to differentiate between speculators and a mythical end users who 'wants a piece of SL.' They don't see the same distinction.

Rockwell, as far as LL is concerned, we are all end users. But from a different perspective in terms of the economy, it takes on a different meaning and you know quite well what we mean by end users.

Agreed Cristalle. And as discussed already in this thread, tier is the main problem, not land prices. I've heard that there are plans in place to address the tier issue, let's hope it happens quickly!

I would hope so!

But honestly, for someone looking to own a small parcel of land, the 5 or 8 bucks usually is not a big deal. Some people may not even think about it. When you have to shell out 20-25k for a 1024, it gives you pause. That's at least $75! It makes the average person stop and wonder what the heck it is they are purchasing. The small tier is not the deterrent, because it's manageable.

But those who are willing to pay more for larger amounts of land are people who are more invested. They don't see the initial price as the problem, they see the tier as the problem. Yes, when you start approaching $75 or $125 per month and up, you are no longer an average person holding land. You probably have a SL business that is hopefully breaking even. So when adding a little more land means doubling that tier or adding another half sim, it isn't the upfront price you are thinking about as much, though it does matter to some degree.

But that first bit of land, for those who start out small or just want a small slice... that needs to be reasonable, and is the gateway to greater land ownership.

LL actually attempts to control land prices by releasing land when they see fit. We have seen this happen time and time again. Unlike in RL, they *are* making more land.

Very true.. but even by the time they do that, many horses are long gone.

The lower levels of tier (around the Premium, US$5 and US$8 levels) don't seem to be that much of a deterrent for many spending customers - but the downpayments do. (For businesses, I can only think that a Premium tier would be a deterrent if they aren't aware that SL business is "real" business rather than "play" business - and thus has nasty things like initial investments - and unfortunately if they are to succeed, they will probably need to learn that.)

Thanks

Yep who would borrow money to buy a block of land in real life for $10,000 if the council taxrates were $1250 per month?

Let them suck on the 213 pieces that my boat breaks up into when it hits one of those Ban lines.. specially if they have Autoreturn off