Sim tier and price raise in 2008?

Part of the problem with the economy anyway is that when it comes to content for sale, most content in general is overpriced in terms of the consumer, but cannot be priced highly enough to adequately reward the creators. There are too many apects of Second Life which really prevent some sort of stable economy that would allow creators to sell for a price favorable to consumers and sell enough to make a profit that justifies the hard work.

One of the things about Second Life that makes me cringe is the market for skins. Not only are basic skins running between $1000 L to $3000 L (quick conversion in my head- $3 to $9 USD), but then for most I would be expected to pay another $1000 L ($3 or more) for the privilege of changing my makeup once. That's too expensive for me, especially considering the fact that, in terms of overall graphics quality, Second Life is still kind of primative. (And that's not a criticism of Second Life- given the heavy flow of data involved in sending the graphics information, there is a limit to the quality that can be reasonably sent.)

Further, I compare this to things like textures for Poser models, and I can get high quality textures for Poser, less money comparatively than skins for Second Life, and I have ability to more easily modify them in Poser and I can use them for high detail work.

While skins are generally too expensive for me as a buyer, I completely understand from the merchant's standpoint why they are trying to sell them for so much. It's pretty damn hard and time-consuming to make a good one. I've made servicable low-resolutions skins for Poser figures, for example, and even those take enough time and attention on my part that usually I'd rather just buy one that someone else made. I've taken some stabs at making skins for Second Life, and even though I'm finally getting good at it, I think it's even harder to do one for Second Life, precisely because the Second Life graphics are more primative. The only reason I haven't given up on doing it in Second Life is sheer irrational stubbornness. After I finish a skin for my own use, I have no desire to try more to try to sell. And even though I'm finally getting good (I have made my own skin that I'm not ashamed to wear), in terms of quality it still doesn't compare at all to what the better known skin designers make.

So even though the price tags of skins make me cringe, at the same time I absolutely respect the amount of time and talent that went into making them. I don't know for sure, but even though I suspect that the better skin makers actually make some decent money selling skins, I doubt that anyone is getting rich or making a living off Second Life alone. (Am I wrong?)

Part of the thing about skins is that the graphics limitations are such that they both drive up the cost of creating the items, and at the same time drive down their value once completed. Then throw in the fact that skin textures are easy to steal and there is no effective means of actually policing ownership of intellectual property. Then add to that that effective advertising is difficult in Second Life. Then add to that that Second Life residents are transient enough and disconnected enough that there is no effective word-of-mouth about products. Then add to that that merchants have to compete with rip-off-artists who act with impunity since there is no effective consumer protection in Second Life at all.

I think the fact that skins are produced and sold at all has nothing to do with any rational economic trade in Second Life, but by the strong creative drives of the sellers and the strong vanity of the buyers.

(Maybe it's not accurate to say that the products are sold for more than their value. It's perhaps more accurate to say that the value is driven not so much by rational market forces, but mostly highly subjective/emotionally determined value.)

I think the way to analyze the effect of anything on the Second Life economy is not to take a rational or mathematical approach. If the Second Life economy were guided by rationality, it would not exist at all. The question is whether a specific change is going add more aggravation than it's worth to operate the primarily-for-fun business.

Well that's a different point but the idea that the corporations are put off isn't true, they're also going to be coming from different angles.

Sounds painful.

The funny part is, no one stays on the cheap land long because it is a headache in the making with ad farms, clubs, and lag factories. The land I bought goes from 18-20l/sqm (beach/oceanfront) and believe it or not, it goes pretty fast. Residents rarely sell.

I'm almost speechless Raymond Figtree!

Some reality checks.

1) I run a small business in first life. You can't even run an ordinary business for long, let alone a California tech startup, without pretty much knowing what you are doing. Second Life is already waaay past the startup business failure horizon. Considering startup failure rates, this strongly implies its management is far more talented than armchair managers who have never actually run a company.

2) There's a reason that a) there is very little competition on Second Life's scale and b) one of their main upcoming competitors is basically duplicating all that is successful here as fast as they can. It's because it's groundbreaking technology, and very hard to do.

3) If the goal is simply to make money, creating a virtual world isn't really a good short term, or even a good medium term way to do it. While not a nonprofit, there are clearly other goals at play, otherwise we'd be looking at a World of Warcraft knockoff instead.



Let's wait and see. I've seen some... what I'd call mistakes, but those mistakes were pretty much glossed over and minimised by the fact that while everyone was complaining, the wallets opened up and said something else.

What nobody really seems to realise is that we determine corporate income, collectively, by our spending behaviour. Pricing is just a wiggle factor that a company can use as a lever to trade off income for marketshare, and things like that.

The question is not 'how much will they charge' really, but 'how much are we going to spend, collectively' - along with defining who 'we' are as customers.

And I don't think anyone knows the answer to those questions yet.

My sense of it is that long term they are tending toward low cost, high marketshare industry supremacy. I don't know what will happen in 2008, but I'd easily guess that in 2018 prices will be waaay down, or services will be waaaay up for the same money.

"The question is not 'how much will they charge' really, but 'how much are we going to spend, collectively' - along with defining who 'we' are as customers.

And I don't think anyone knows the answer to those questions yet."

YES...agrees..well said that man..

That's realistic. It seems to me that Second Life does have a great deal of potential, and Linden Labs has developed it pretty well, but Linden Labs has hit the wall now when it comes to developing Second Life any further. Linden Labs drove up the resident base but can't keep up with it. That seems like a ripe time for another company to buy it to take advantage of the residents and the unfulfilled potential.

One must first know the boundaries before one can define the outcome.

no company should sit and wait .. unless it can define the boundaries.. and then only because:

That would only be something i would consider if: A) i had, had enough. and did not care about what happened or B) i was certain that i was as far as possible, and therfore reached the boundary.. one has to be at the mountain top before one can look back and say.. "we did it"

Else.. why has the company pursued this for so long in spite of every obstacle..? that would be my prime question.. what was the aim, if your waiting now?

Anything else is a compromise.

Gee. If the tier increase information is common knowledge, and we all have no idea, does that make us Uncommon?

Ever think that some of the Lindens still read this forum and sit back and laaaaaugh with each other about how FAR off we all are from having any clue on what they are planning? *waves to the lindens*

Desmond,

While I sometimes disagree with you [the voice issue being one that comes to mind] I always find your posts to be intelligent, well reasoned and thought provoking. I agree with paragraphs (1) and (2). They [LL] obviously know, or knew, what they were doing. They have created a very fun and addicting platform [game? experience? whatever?]. However, creating something and actually running it are two different issues.

I would think that in the future, some one will write a Master's thesis or PH.D. dissertation on how to RUIN a well thought out idea, with SL being an example. Examples would be horrible communication, non existant or cavalier custumer service, the "Tao of Linden philosophy that seems to be fiasco, poorly thought out "cause and effect" scenarios [e.g. the flood of free accounts], etc.

Combine the above with the rather disturbing lack of candor of LL spokespersons in instances like (a) limiting free account log ins when the amount of concurrent users cause performance problems [NEVER HAPPENED]; (b) Eliminating "traffic" [NEVER HAPPENED]; voice not causing performance problems [APPEARS THIS DID HAPPEN] and we have a situation where simply many paying customers have little or any trust or faith in LL doing anything that will improve the SL experience for the majority of users.

Since I joined in late January of this year, the experience has gone downhill steadily, with certain peaks and valleys. The valleys get deeper and the hills smaller.

There seems to be a corporate culture which is either plain inefficiency to be charitable or just arrogance, to be uncharitable. Unless they change, LL will be eaten up by viable competition, unless LL settles for some sort of niche market, like having millions of user eyeballs to attract corporate markteers.

It makes sense to me that whatever competition may be coming would, of course, look to the many aspects of SL that are succesful. I would think the competition will also look to some of the problems I have outlined above. Any prediction on WHEN an actual viable competitor will arrive?

I believe that we will see no significant changes in LL's business model until the competition raises its head and begins siphoning off paying accounts in droves. Three weeks after the Exodus begins, those left will be besieged by the inevitable "We're sorry and are going to better.." pronouncements. By then, LL's lack of credibility will probably render the pronouncements useless, except for comedic purposes, and they will not be able to stem the tide.

One thing we can all agree on is that the coming competition [and it is coming] will make for very interesting times.

Sooz

Lol... maybe they are planning to drop the mainland tier fee. Think about it.... they get land cheap enough and stable for a period of time, drop the tier fee, and watch ownership spike... oh wait, that would make too much sense...

Without reliable information from Linden Labs, all we can do is sit back and speculate. I hope they aren't laughing at us for doing so, because the fact that we are speculating is an indication that we still have some hope and are planning for the future, rather than giving up on it altogether and taking our money with us.

P.S. I would hope that before any Linden would read this board, they would not do so while Abuse Reports and consumer service requests are pending. I'd hope that the latter two duties would take priority over reading these forums that are expressly soley about communication between residents, and not about communication with Linden Labs.

Actually I would HOPE that they read the forums to see what people think about various scenarios. It might bake them LESS likely to do stuipid things like raise tiers fees to $295 on class 4 sims and offer nothing in return.

They were ready to do that till there was a HUGE outcry, then they backed off and came up with the "Revisit in 2008" policy which was the last Linden word on the subject.

If they are reading this maybe they can then come up with something a little more... palitable... when the time comes...

Even though parts of Second Life are poorly managed, and there are many unpopular decisions, I don't think that equates with the people at Linden Labs being stupid.

Part of the reason that they don't care about what the customer base thinks about some decisions is because upsetting the customer base, in many cases, does not impact the bottom line profit for Linden Labs. Mere complaints don't affect the bottom line, and mere threats of pulling out money don't affect the bottom line. Actually pulling out money, that isn't easily replaced, affects the bottom line.

Actually, I would hazard a guess that at least one Linden has attended that basics-of-economics class that discussed elasticity of demand. Elasticity is a measure of how much a raise in price of a product actually impacts demand for the product. And that Linden who paid attention in economics class probably concluded that "demand for Second Life is highly inelastic."

The viable competitors are already here.

Consider what competition means.

a) Simply the ability for people to go elsewhere with their eyeballs and computer entertainment time - as such, World of Warcraft *deeply* qualifies already, and many already trade their SL time and entertainment dollar for WoW. But it's not the metaverse, you say? Seems it's close enough for many, many people.

b) Niche market competition: a 'me too' company that would largely duplicate Second Life's specifics. These already exist - were I not on Second Life official forums I'd happily list them (to do so here is a bit tacky, I feel).

SO why are they not cheaper, faster, better, more reliable, dominant yet? The answer is stunningly simple: because they aren't any good yet. Because making a metaverse is hard to do.

The competition *will* get better, though, and fast. Being #2 has major advantages - all the efforts of trailblazing can be pretty much ignored, chasing the niche market leader down his own successful path and ignoring the rest.

I strongly see a Coke/Pepsi situation brewing - two dominant market leaders in the pure metaverse niche - three tops - then all the rest. That's the hard test for the 'Pepsi' of the competition - to be #2 means that you have to beat #3, #4, #5, #6, and #7 for the Pepsi spot. Likely we will be seeing that shakeout over the next 3-5 years. Many of the "me too's" will diversify their mission a bit and survive to serve specific subniche markets.

Could Second Life slip and fall? Sure could. But here's a prediction for you: it won't fall to its competition.

I see Second Life's relevance trajectory much like America Online's. AOL was the 'gateway' experience that showed a generation of otherwise nontechnical people what the internet was. Eventually most everyone left AOL far behind once the World Wide Web came about.

Competing services of Compuserve and Prodigy didn't really seal the fate of AOL at all. Tweaked its course, sure - but does any of us remember just *how bad* AOL service was in 1995/96 during the rapid expansion? Dozens of 'busy signals' for hours, becoming the norm for several months in most areas?

It's hard to suck worse than 'no connexion at all' - yet AOL maintained market dominance with ease, even when a significant fraction of the customers couldn't even access it! Likewise, I expect Second Life to lose relevancy only to the global public metaverse itself, along with its competitors.

So what does all this mean in terms of pricing? Good question. Higher pricing will have immediate nurturing effects *now*, at the cost of selling the future of the service and spurring competition. People have pretty long memories. If you read the blogs, one of the images used by the board of directors was that of a long runway - they knew from the start that this wasn't going to be a rapid return business.

I suspect they won't smack us too hard (or at all!) with higher rates, because it doesn't make a lot of sense to do so and doesn't match strategy.

Look at past actions:

1. the grid was opened to free accounts; Philip saying he wants as many people as possible to be able to access the grid

2. region price increases last year only came up when there was inability to meet demand for servers - and even at the higher prices demand was still stratospheric and unable to be met; land prices soared

This looks like they are doing exactly what Philip was saying. Trying to reach as many people as they possibly can, globally and quickly. A marketshare and primacy strategy.

Long term, yeah, competition will bring excellence. But just as Star Wars Galaxies didn't exactly raise the expectations of online video gaming, there's no guarantee whatsoever that a competitor to Second Life will be both cheaper and more reliable.

I'm expecting reliability in maybe a decade or so, just because the market is largely willing to tolerate failure. How long did the majority put up with the blue screen of death from Microsoft? I fear we aren't much different as consumers today.

Desmond,

I guess one or both of us should have clarified the meaning of the term "competition" within this context. What I meant was a game or platform that is SIMILAR to SL but performs as well or better and where people can pretty much get a similar experience, be it social or in content creation. I've never played WOW so I can't speak with any knowledge. I have found that I am re-discovering Civiiization IV. I can paly it for hours with no problems, no technical frustrations and enjoy myself. I am spending less time in SL due to this. It works better.

Interesting point about AOL. As I recall, AOL didn't really clean up their act and get serious about taking care of customers untl people started leaving to other companies. I see the same thing happening here.

I tend to agree with the Coke - Pepsi analoogy, with a twist. I think there will eventually two competing providers witha couple of niche market 7-Ups and Dr. Peppers out there.
Remember the "new coke" that came out several years ago? Despite an outcry of warnings that the customers didn't WANT it, Coke releaseed it anyway. Sales plumetted and they gave in and went back to the "old coke." There's a lesson there.

You're right about the #2 company having to try harder and yet be able to take advantage of LL's trailblazing. I may be wrong but I think whover gets the number 2 or number one position will be taking advantage of quite a few of LL's mistakes. LL could minimize this IF they wanted to; they just seem to care about it.

I would like to know more about the competition, but agree this is an inappropriate place to give that information.

To summarize, I think the ONLY thing that will save SL is having real competition that offers SL-ers a viable choice.

Sooz

Have been saying this since the turn of the year! Monopoly is never a good thing.....with direct competition you'll see an improved performance, an existance of a Customer Service Dept and fair pricing.......all great news for the end user.....be it from SL or it's direct competitior.

when i was in uni they mentioned that this was quite probably a marketing stunt by cocacola all along. if so it was ingenious.

World wide gaming is the trend today. From 13 years to 80 people are playing. But there is not real world like ours here on sl. Those other Online games themes are different, where from flying airships, to battling civil wars, to stupid looking manga women crying for their person needs (you know what i mean) etc.... If there is a Second Life in 3 to 5 years is high doubtful in its present form. We change into another style of game within a years time. But all this assumption is based on Second Life being here in that time. As in all trends VR worlds is will or will not be trendy in the next few years. People changes people spending habits change disposible income come in to play here. There are some culture that refuse to play for online services like SL so how can company like LLABS make it? But I don`t for see Second Life being here 3 to 5 years, but instead it will be a completely differnt Second Life existance. Oh Well there is always real life

Usagi

Just my random thoughts, nothing more, nothing less.


SL is a service and advertised as such, so the price increase I actually understand why. It is not a subscription. LL tells us we are paying to use resources, much like web hosting companies sell server space and bandwidth and those costs do go up, internet bandwidth is not free.

Here is the one misconception about land, it's resources (objects so far) are limited, every darned parcel has a limit to the number of prims that can be on it at the same time, that is what we the landowners are paying for, the right to have a permanent presence of objects rezzed out on our land, nothing more. The other services such as classifieds and to be found in the Places landowners actually pay for out of our L$ balance, they are not part of the land tier. Other than that, everything else is identical, we all pay the same for uploads, we get the same space allocation in our inventory etc. My point I guess is this, I think SL would attract a larger vestment from it's resident base if LL would actually offer rider services that we can pay for as opposed to raising land tier to get revenue. The problem with many businesses is that as opposed to finding new and useful sources of revenue to raise cash, most just lay off employees and/or jack up their existing prices. Instead of forcing the average resident who owns land, mainly for fun as some of us do to pay more, find new ways to bring in the extra revenue. My ideas below are in no way meant to be used as a discussion point, but rather plain and simple ideas that may help incite others to think of ways, and perhaps get some sort of civil discussion going with LL about possible ideas which will benefit both the residents AND LL. I do not desire nor want flametards harassing me about them.

Services such as:

Backups - A tiered payment scale depending on the allocation for backing up data. I would be willing to pay a small price each month to have the ability to secure some resources on some sort of backup device that I could drag and drop files to and from, perhaps by an added Folder in the inventory. A "Backup" folder can be created and you can access it like the Library folder, except it drops to a dedicated backup que. Have the que do a check, if the item is no copy, it gets moved to the backup que as opposed to an additional copy there. No items can be rezzed to world from backup, they must pass back to a user's inventory to be rezzed. I am not saying immediate access to backups, even the ability to que a recovery to get the next day can help in the event of losing a project that took a week of working on. I know, we have notepad for scripts, we have the ability to save our orig items like PSD files etc, but I think a backup service could do wonders for those who may own a ton of inventory or would like to keep a legacy copy around for those just in case moments.

Inventory limit cap -
I know this is not a popular idea, but one that should at least be considered. At the rate of this current growth, the current asset server is going to continue to choke and wheeze and puke causing problems. It isn't the 500 copies of the free glow in the dark naughty bit, it is mainly the original images, sounds and animation collections which are growing everyday. From what I understand, even if there is just 1 reference to a stored asset, the asset remains even during the supposed clean ups the asset server undergoes, and this reference can be as obscure as a single lost prim. As a content creator, I know image files can get large. I also know that trying to drop the size usually results in lower quality. And now we have sculpties which use textures, this adds to the mix. A tiered system based upon price / storage space I believe would help a bit as well. Remember, we are paying to use a service of nothing more than server resources, I think overall, we may need to start sharing some of that burden and actually paying for other services. Database storage is not free, especially when we are in the multi Terabyte range.

A paid support system other than the existing one-
I think LL could do well to add some sort of "Elite" support tier, higher priority where a dedicated staff will drop everything to assist you, but it may cost a bit more. LL needs to get the money somehow to pay existing employees.

Hmm I always found sims affordable to buy, moneys sitting in the bank, I caould afford to buy 2 or 3.
But they still aren't affordable to own.
To me it's like buying a new car for $2k that costs you $300 per month to service.

Taps outwards on the monitor & points, look, there's no one out there Ashlynn, the coffee cup hasn't moved for months, haven't even seen a cleaner go past.

Perhaps it's something to do with the new financial whizz kid they employed who talks in jargon about 'sink holes' to control the internal economy? Teir is LL's only real revenue.

Your World, Your Imagination.... being kept in the dark, what else can we rely on?