xstreet undercutting

Hey, I seen this movie before. It was a couple of months ago - back here:

/327/85/315699/1.html

My posts in that thread still reflect what I feel about the subject. Just because you feel your time in making a shirt is worth L$200 doesn't mean somebody doing the same amount of work can't decided his or her own time is worth L$9.

/me cackles wickedly
That is what you think. I own the prim mine and I keep those "happy workers" busy carving out those prims and painting fake wood on them 24*7. Where did you think they came from? rosedale's magic wand?

Careful or i'll revoke your prim license for sedition and yours will go poof.

If you are referring to the "economic statistics" that are found at:

http://secondlife.com/statistics/economy-data.php

Those statistics say nothing of the sort. PMLF doesn't equal income as pointed out in this article:

http://entrepreneursguidetosecondlife.blogspot.com/2007/11/number-of-profitable-second-life.html

PMLF doesn't net out the costs incurred by SL business owners, including, most notably, Linden Lab charges to accounts such as tier payments. Given that there is a general consensus that some of the largest income earners in SL are in the virtual land business, and that even many of those that are not have overhead for owning or renting land for their businesses in SL, that means a substantial amount of business owners earn an actual income from SL that is lower than their PMLF, and in some cases, significantly lower than their PMLF. That's not to say that no one makes a living from SL as there clearly appear to be at least some that do, but I suspect it is a number far less than the few hundred with a PMLF in excess of $5,000, possibly even less than half that number.

$5000 USD/month is a higher income than the average U.S. citizen. So A LOT of people would quit their day job. Especially considering the average book store employee working full time makes maybe $1000 usd/month before taxes.

You may not quit your day job over it, but MILLIONS of people would make that trade, including myself.

Oh that is bogus.

Ok, that is right. In so much as it is right to look at a restaurant that is obviously earning money from being busy and then saying "but this is not an indicator of an income". And then you say "overhead" which is supposed to be what? Some nebulous number that somehow negates the 5k earned, or much of it?

Your opinion is noted, the article was read. Once people without data start making claims that some unknown data quanta is "significant", i switch it off.

Overhead in SL is very low. Especially when you are earning 5k a month. Advertising is cheap, land is cheap (for any business that has RL earning potential, which even 2k-3k a month is enough to qualify as RL earning potential).

I've recently heard someone else bandy about the cost of running a biz in SL, overhead, employee's, advertising, etc. It's a strawman argument. These costs are minuscule compared to RL for an equal earning potential. In RL you are joining the Chamber of Commerce (there goes $250), paying monthly dues for small things and meetings, advertising in the local city paper and maybe 1 or more neighborhood papers, paying insurance, buying a business license, paying utilities, worrying about any sort of weird liability lawsuit against you (especially if you live in California - and i can say that since i am a natural born Californian). So no. You can't just say the word "overhead" or "other costs", and all of a sudden we are supposed to think there is 'no income' because that sure does not work on me. I've run businesses in SL, i have done projects, i know "costs", I am not seeing it, and at one time i had 'the most successful' business of any type in SL, by far, so i am not speaking from inexperience.

And once people start making claims that some known data is something it isn't I take it with a large grain of salt. The article doesn't say that the data is significant, it simply points out that it may be significant and that it could be problematic to just dismiss it.
Tier is not low or insignificant if your business is made off of SL real estate. Even some business that are not real estate related run off of mutiple sims that would net out a few hundred to a thousand dollars from PMLF.
No one here ever said that there is no income from SL. Talk about a straw man argument.
And all that establishes is your personal experience. That doesn't validate a broad and sweeping claim that PMLF is a reliable equivalent or indicator for all, most or even many of SL residents' income from SL
You can say it's bogus but that doesn't make it so. The fact is that PMLF doesn't equal income and anecdotal stories are hardly an effective rebuttal of that fact.

Dagmar, it depends on the product. If you are producing and selling in world goods, you can sell via xstreet and your costs are negligible.

You *can* have one or more stores in world, employees, etc, but that is a choice not a neccessity.

Services are similar. You don't need an office in world.

Ironicly entertainment is probably one of the lowest profit margin industries, since it does need a venue and probably more marketing....

People think spending more for an item will get you a better quality, which is just so not true! You are paying more because they have high advertising prices paid into xstreetsl.

I type in a certain amount and browse from there... 250L search brings up some cool results.

Now I also see a lot of 50L items being sold at introduction prices mostly itty bitty barely there clothing... I've yet to find anything for 50L on the home page features that will cover my ass or all my boobs.

and besides im sorry but paying 1000-2000L for an outfit is CRAZY

There's a whole thread about whether or not freebies are hurting the SL market or economy.

As far as the original post, I think the first respondents covered all the reasons someone might price things low *aside* from spite, which would not even be something I'd have imagined as a reason.

As for Anshe Chung I think she employs a work force in China so it might not cost her very much to outsource the work.

But most people make their own items. As far as payment for real life time spent, no one could afford ANYthing in SL if that were the case. Real life payment equivalents in general do not exist in SL. It is a microeconomy and priced as such.

P.S. I am always grateful to catch a price break not to mention freebies. And there are so many great freebies and low cost items around, now. I do agree that it's become very hard to make ends meet in SL, I think one has to view it as a hobby or entertainment basically. Very few meet SL costs or profit.

You are terribly wrong here. For many content creators, RL payment equivalents do exist in SL.

Only people at clubs and such are working for $250L for four hours. Many of the real content creators i know charge a minimum of $20 USD/hour which even more find laughably low. SL is worth RL equivalent pay depending on what you are paying for. I paid 100k in Linden cash and services for a custom exclusive animation once that was made by hand.

People get paid RL equivalent $. Heck, even in 2004 i was charging USD hourly to make custom pierce sets.

This is not uncommon.

Items need poses etc. I know the poses I buy are licensed with an agreement that you will not charge less for your items than the cost of the poses. I do know that many sell freebies and very low price that include these.

Business owners selling things at quite high price are not necessarily making a massive living, but trying to cover the huge land costs it incurs, especially if you are selling high prim items like furniture and prefabs. Plus poses, scripts, textures etc are costly. Yes there are some freebies around in this area, but a lot of them are stolen content.

If too many where to sell for next to nothing, it would reduce the merchants to the point where only those that can afford to pay for the pleasure of selling will survive.

Surely if you can afford to buy land and the monthly rental fee, you can afford the one off costs of the home and furniture to go on it. Selling these types of items for 10L isn't helping those with no money, only putting people out of business who need to cover their costs.

Some creators (particularly Fashion) are motivated by becoming an acclaimed Designer by the Fasionistas as opposed to making significant SL income.....hence high quality products are sold at low or affordable prices. Being blogged, having interviews in Magazines or being featured at Fashion Shows are the primary drivers that spur these sort of creators......not money! It's not really what i call a "business" in terms of the end goal .i.e generating RL income.......it's more a "showcase" of their designer creativity.

By contrast there are creators that produce content in the hope of generating RL income for whatever reasons....the pricing of such products might not be as generous as the above. These type of creators will try and run it as a "business" with emphasis on advertising and marketing as well.

I guess there's a place in the Market for both types.


Then there are those Creators that are neither Business orientated nor posess Marketing savvy....they're the ones that are likely to close shop doors in a given tough market environment. (like right now!)


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Providing the product is reasonably good (doesn't have to be the best thing since slice bread!).....the best Marketeers in SL win the end game....if you're talking about value of sales!

I know several high quality Creators who produce awesome content.....yet are clueless in marketing and selling their own content. A shame really as they struggle in SL's marketplace!




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The obvious point of debate here, is that you give an example yourself of someone who actually wouldn't make that trade. Since you refer to your business in the past tense, it implies that you did not find SL a viable option compared to what your skills would be worth in RL for income.

I don't think a lot of people would quit their day jobs, even the one's being paid under minimum wage you noted, when they are told of the .1% chance to make that income.

I never said there is no money being made in SL, shoot I make money in SL. I say that there is not a SL industry. There isn't. 250 people is an insignificant percentage of the population, even if we don't take into account any of Dag's arguments, which I find compelling, since even at the height of the SL boom, where I was pulling in $L75k a month, my overhead for rental for my markets around $L25k a month. Even if at 33% overhead I was getting ripped off (which I doubt since two of my largest stores were on friend owned land which I paid no tier or rental for), and lets say 20% is realistic overhead.. that still immediately knocks 5000 down to 4000.

The skillset required if you want to make significat money in SL (and by significant I don't mean RL significant, just enough to be styling in SL) is a little more rigorous than that of a bookstore employee. If it wasn't then all those newbies who show up at the infohubs asking how to get a job in SL would be gainfully employeed doing something other than stripping for L$200 in tips a night.

That's a good change imo....well done LL!

I'm not sure that is 100% correct...."It's only a game". For many who don't have businesses or run estates....yes, it's only a game.
I happen to know the owner of Fantasyland Estates and can tell you he's just a normal upstanding guy and not a multi-millionaire in RL. Fantasyland is probably the biggest Estate in SL right now, definitely top 3 with around 600-700 sims. I'm not sure how much Sirux has invested in terms of buying all of those SIMs.....but you can imagine its somewhere around 1/2 million USD mark.

To me investing 1/2 million dollars and it "just a Game" doesn't compute!

Edited because I misread Rene's orginal post... d'oh.....

Okay, many of us have hobbies.. now SL could be his hobby... if he is lucky enough to have SL paying for itself.. say he has 500,000 invested... but he has made back 499,000 of that.. then his actual cost for this is 1,000. Not bad for a hobby. I spent more than that on D&D stuff over the years, but it's still a game. Shoot even if he only made back 400,000 over the span of a few years, still if he can afford it, not a bad price for a hobby. I collect old supercomputers and have spent more than that without the anticipation of receiving profits from them.

Or maybe he is one of the 250 people who are making R/L or near R/L income in SL. Even then he is not representative of the normal every day SL content creator/business person. I'm sure most of us could all come up with a name of someone we have met in SL who makes or claims to make some significant money or has invested significately in SL.. And I'm sure there were people in TSO who invested significantly or made/claimed significant income.. Still does not change what it is at the base.

Just because people can try make a living playing poker doesn't change the fact that it's still just a game.

Again incorrect!
Take a look at the LL economic stats...it says around 1250 people made more than 1000 USD in August. (not sure if tiers are offset....and this is net profit).....1000 usd per month probably equates to a low paid RL job in most developed countries, whilst an average (med) salary in say Brazil and other countries. 1250 people are more than "maybe a couple of dozen at most" don't you think?

Again not quite right....some people like myself have ALTS that make significant income as well as their Main a/c (this one)...the stats doesn't pool my ALTS income under one.....i could be listed in different columns and together have a net profit more than my Main a/c that is registered in LL stats.



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The economic stats do not take into account tier, they do not take into account the cost of a computer and electricity, they do not take into account the cost of a monthly internet connection with bandwidth to support playing SL.. that 1000 a month gets eaten away pretty quick when you have to pay for your infrastructure to support that. Saying that SL put $1000 worth of Lindens into someone's account is not the same as saying that person cleared $1000. If SL was a viable way of making a living wage, there would be more than 1250 people making a whole lot more than $1000 a month. It's not.. it's a game, that's it. It's no different that World of Warcraft, TSO, or.. hopefully soon.. Star Trek: Online.

Now someday, the SL interface might become a useful tool for online commerce.. but that would be providing out of game services and products using the SL interface for your users to browse your wares.

The problem with that Rene, would be if you were making that type of profit on alts, then combining their profits together would skew the economic data even worse. The fewer actual people making more money in SL is actually bad for the economic data. It shows that there are fewer not more people making money.

The argument isn't that money can or can't be made, the argument is that SL is not an industry as compared to RL, which is what the OP argued, it is a niche market of a niche market that a very small group of people pull money out of, while the vast vast vast majority of the people playing don't. And people coming into SL expecting to quit their day jobs and live off of making tga's in photoshop for an hour a day are in for a rude awakening.

Trust me, his NET income would be 6 figures even based on 70% occupancy rates The old saying....money makes money!

Its possible to make 100 - 200 usd profit per sim per month with full occupancy, also depends on whether SIM is grandfathered or not. (200 usd profit would not be unrealistic....195 USD tiers versus 400 USD tiers received.....e.g 16 x 4096 sqm plots @ 25 USD p/mth tiers <----and that's a low tier charge same as LL Mainland)

I know several Content providers that make 5000 USD per month.... NET profits

Tons of SL'ers work in SL for low salaries...shop assistants, Real Estate sale assistants, strippers, DJ's , musicians, greeters, security etc etc

The analogy would be like RL......how many people around the world make 100000 USD per annum? What is that figure.........maybe 0.000001%?

I will agree on one thing......the streets of SL are not paved in gold!
However if you have creative or selling talent, business acumen, marketing knowledge and prepared to put in the hours....you do have a fair chance of making reasonably good income from SL. The entry level is low.....you don't need high capital investment for example, you don't need a Masters degree etc etc

And I would bet that of the people you know in RL vs the people you know in SL.. that a far greater percentage of the people you know in RL are making more than 5000USD a month NET profit. SL's data shows there are 250 people grossing, not NETing, just grossing over 5000USD a month out of a population of 5-8Million.. even if as I am willing to concede, the actually number of real residents is 1/20th of SL's numbers and is 250,000.. A city of that size in RL.. you would have a lot more than 250 people making 5,000US or better a month. And a whole whole whole lot more making more than 1250 making more than 1000 a month.

The economic realities of SL are just bad for anyone who wants to make a real income. Sure, yes, there are a very few people who do pull money out.. but if you are going to risk you future income on something.. would you want to risk it on a game, or rather getting a RL skill that pays you without the worry of SL's stability or longevity?

Oh enough with that nonsense.....before i discovered SL, i already bought a decent spec computer, was already incurring a depreciation charge the moment those products left the Store, already incurred Internet connection charges, already incurred electricity costs running my computer using many other different programs......none of these costs were additional because i discovered SL later on.

I doubt many go and buy a Computer and get connected to the Internet specifically wanting to play Second Life (or very very few)