Price Increase for Islands...Poor Timing?

There's actually a chance that the sky won't fall. I just did the math, and assuming that the monthly tier cost stays the same, the cost of owning an island for the first year dropped by only 13.7%. The cost of the second year didn't change at all. I'm a little amazed at how many people talk about their sim values as if it was a savings account. I'm a little disappointed that the sim I bought in January just lost a chunk of it's value, but I wasn't planning on selling it. Ever. At the same time, I'm excited that all the sims stuck in the Idea Phase of my mind just became a huge step closer to being feasible.

I'm still waiting for the other shoes to drop on this announcement, but if the only change is the initial cost, this will turn out to be a great move in the long run. I think most of the price reduction is probably a reduction from their server supplier. They're still using the same hardware they've been using for a while, and they're buying up servers in ever growing numbers. Now with the Land Store changes, LL has to buy them in advance and have them already hooked up and waiting before the sim order is entered.

I'm reserving my right to complain if the follow up announcements change things again, but if it's just an upfront price reduction, I'm pretty happy with it.

Truth is, this only hurts if you were not in it for the long haul, and were thinking of selling in the recent future. It doesn't hurt someone like Des, Alliez or Anshe because they're not in the business of flipping estate sims. And the monthly outlay is the same, it is just cheaper now to get an island.

As for the mainland floor bid dropping - big deal! When was the last time mainland sold for anything under 1k? The 195 tier still makes it more "worth it" in comparison to an estate and it'll sell for more than an island will. The problem is that it is going to hurt the rental business, making it more attractive to own land. We'll see if anyone actually bites at that one, or if it's just existing premiums buying more land.

What I see happening: more people buying full sims for development & rental, thus more undercutting in the market. The game gets cheaper for non-premiums to play, but less worth it in terms of time for premium landlords. And so it goes.

Never. As far as I know the starting price for mainland regions has always been 1k or higher.

We'll see who wants to bid up sims and how much tier they have since Jack said they will be dumping 10 a day.

Recent future? There is no such thing. Recent refers to the past. Cool phrase though.

Yes, I wonder about this. At present my rental biz goes full ocupancy. I only buy good land, and rent tier to keep my costs low. I pass along the savings to the tenants. Small profit, but enough to float my own boat (literally). I only work on the mainland, as I am a mainland kind of girl.

This move by LL could devastate the whole land market in short order. It is a very complex mechanism, and will not take kindly to such a rude shock.

Well when I buy a computer today for 1695, and tomorrow the price is down with 695, I would go back to the seller and try to get a partly refund. Because they must have seen it coming.
If I bought the computer last month, ad the price drop is tomorrow,I simply say to myself: tough luck. This happens all the time, things tend to get cheaper after a while.

Buying for example that computer today, and selling it after 3 months, devaluates the item with at least 50%. Meaning that when I bought for 1695, I should be very glad getting 800 back after a few months.
BUT: who in a right state of mind buys a computer with the idea of selling it after a few months?
AND: Who will scream that they devaluated all Dell computer owners assets with 40%, if Dell cuts their prices? Exactly, no one.

So I can understand that recent buyers of islands feel bad, as they would have payed a lot less if they waited a bit longer. Estate owners who bought longer ago, have nothing to complain at all.

So the problem is not in Linden Labs decision of cutting the price, but in the mind of certain Sim owners. They thought a Sim would be an investment, and now see it isnt. Buy an Island, and you loose 1695 of your real life dollars. And gain the opportunity to do something nice with it, even earn money. Thinking to buy one, and sell it for about the same price if it goes wrong, is simply not a smart business plan. And that is put friendly. I think the successful Sim owners know that, and are just glad they have to pay less upfront for any new sim.

Greetings, Marcel (who simply rents at a trustworthy Sim owner )

Reading through the blog comments, I was mostly left with the impression that Renee Fauld's posts should be deleted. Not because there's anything offensive or anything about her posts, but she wasted like a dozen posts on nonsense, blocking posts from people who actually have something constructive to say.


*rolls eyes* She obviously meant "near future."


lol

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Oh yeah and as far as my own feelings, I purchased an island just a couple months ago and obviously I wish I had gotten it for the new price. As others have mentioned however the main cost of ownership is tier, not the up-front cost, so overall the price change doesn't mean much to me.

The price of a $1000usd a sim, with tiers is still crazy-absurd. A premium membership, should include a sim local on ones own hard drive, with the option to add as many sims as one has hard drive space for, with small incremental increases in monthly membership. This kind of plan will be the competition to beat in a few years.

I think it is obvious this will be the way it will be. SL with have to quickly evolve that way or die. They can save SL, though and remain the prominent center in this future grid internet if they make rapid changes, well funded by stock investors.

In order to not outrage existing sim owners and premium account holder's in this "beta trial" we call SL (TM), they would need to offer them generous stock in the company, since paying SL for anything, has really been funding their beta trials all this time.

Does the future of Sl hold, interminable lawsuits and fleeing Lindens like a bunch of ginkos?

There will be no long term loyalty to LL, unless they earn that loyalty.

Imagine if My Space had been charging $2695US for a web page with a $295US monthly? and then some competitors start to give it away for free? That will happen.

IMO land prices in SL have been just about as stupid as if a My Space page had been that costly. Except for rich hobbiests, it was a profit motive or the desire to make a Second Life, that drove people to buy into a sales pitch and make these land "investments."

That LL didn't initially create SL based on the model of putting sims local on people's own computer, was the biggest mistake from a long term view, but from the view of making big bucks quick with no expectation for longevity, then what they did was pure opportunism on their part.

If they were just running, laughing all the way to the bank and really knew they were milking the naive, for as long as they could and no serious intentions on being in it for the "long haul," then that will become obvious. It will also be obvious how LL, allowed, raised and bred, many fly-by-night day-trading, entrepeneurs. equally as willing to milk residents for as long as they could.

We can give them the benefit of the doubt and think they were just too spaced out to see this coming, but then SL has been about suspending disbelief all along, just like the snake oil pitchmen sell their dreams to their dreamer, victims.

Wow that was a blog post and a half to wake up to! I am not sure how I feel about it to be honest, my very good friend literally just ordered a 2nd Sim... I have sent her links to Hopes post #75.. I really hope that they will cancel for her, because that does seem a bit mean! I cant help feeling for those directly affected by this. It does seem a slap in the face.

On the other hand I have had plans to buy a Island and this does cushion the blow for me some what. But still I have a lot of friends in the rental market and I cant help feeling for them today. I will add though that this does not mean that everyone out there will have their own Island to play on..$1000 is still a whack of money and the $295 tier is steep...add vat on to that for us Europeans and its still a lot of $$$$ to rush out and buy the newly priced Island..

The one thing I will say about this bombshell.. is that its very much like the VAT business.. LL literally just drop it on us..!! They must know its coming.. they surely have meetings about it..discuss it..make plans.. why cant they at least put out a little notice to warn people changes are coming which will result in cheaper Islands.. or something.. like the VAT, why do they just drop it from a huge height and run!

That might go some way to explaining why the exchange rate at slex went from 280L to the $ up to 295L to the $ .... it was at 350L+ at one point

It's a shame that there are not more "sims" with 1875 and the ability to name your own "region" ... personally.

It's also a shame that you are not able to buy mainland sims at 1000 guaranteed each with the proviso that you cannot resell for at least a year/forfeit if do not pay tier.

Frankly, the rampant profiteering that has happened has passed me by, I am stoic about my losses and hope others don't lose too. I'd always planned on buying an island - not sure I will now tbh.

There's a huge difference between buying a computer or a mobile phone and buying land in Second Life. Buying land means you're investing in the project. Do those who invested money in Linden Lab to see this venture start accept that they will lose money on the deal?

Your mobile phone becomes out of date, your computer becomes out of date, your car becomes out of date.

However you pay for those items outright, you're not paying a monthly maintenance fee. Well you might with a mobile phone but then you get a new one during the lifetime of that cycle and it will be better than your previous one.

If everything people invested in devalued then the stock market wouldn't exist, the housing market would be dead in the water. Indeed Linden Lab wouldn't exist because nobody would have fronted them the money in the first place.

But unlikely, as the opposition aren't far away, at $75 per month for open sim at the moment.
I'm sure people who run serverfarms as a business can kick LL but reasonably easily when external grid linking comes online, if anything I think LL userbase is the onlything they have of value, the opposition ahve all LL software or at least better versions of it in the pipeline

Hmm, I suspect most people who want to buy islands will be much happier buying them at $1000 than $1695.
Although in the long term the tier sucks.

I would think a lot of regular island buyers will be concerned about pouring more money into the market. New buyers will welcome it I'm sure, I'm not so sure existing owners will.

The tier does indeed suck and is quite obviously the bigger barrier to land ownership.

For those around last time that tier was increased etc, this does have a slight deja vu to it.

Maybe thats the problem, older land owners see it as they invested in the company where as LL see it as you purchased services from them.

I don't know why you still think you lost money on the deal - the only way that happened is if you did not recoup your original purchase price by using the island to generate revenue - if you did then you got your money back for it. This is extra - granted it is less extra than you were hoping for but still extra.

If you bought the island to not make money from then you still got what you paid for and have been using that service at the agreed cost to the letter of the contract you have with LL.

Many mobile phone services do not give you an upgraded phone during the lifetime of the service too. Do you expect that even your upgraded phone will still be resellable for the price you purchased it for? Or that it was an investment in the phone company?

SL Land is not a tangible item, it is a service. The fact that LL lets you resell that ability to use the service at all is wonderful. I don't believe there were ever any promises when you paid for the island as to what its resale price might be if any, so why think there should be?

The problem is really down to misunderstanding of what they own and LL's clever marketing. LL is just like a telephone network utility, when you join you buy a telephone and pay for a service, in SL your buying a server and a service, I've said this before and I'll say it again, your not buying land, that's just a word, nothing more.

If I leave my telephone utility company and go to another, (which would usually be because I can get a better cheaper price) I can't go on ebay and say "hey, who wants to buy my old telephone and service?" people would just think your insane.

At least with LL you can *still* resell your rented/bought equipment, that's still a plus.

Edit: Haha, snap Gabriele!

I think the people who are claiming that existing island owners have 'lost nothing' are missing a very basic point here. People are getting hung up on the $1675 vs $1000 value of the 'brand new' sim. No, that's not where existing owners have lost money.

I never figured my islands were worth their existing price. I know that, just like a car, it loses a huge chunk of value as soon as I took it off the lot.

Try to understand this bit of basic math, however. If a used, second hand sim was worth approximately $1000 yesterday, and it is now only worth approximately $500 today, then has the value of existing private islands gone up, or has it gone down?

Yeah that's right. It's gone down.

No, not by $675. We're not comparing the brand-new prices. But the resale value has dropped, and it has dropped significantly.

And while the lower purchase-price might make it attractive to buy more islands (3 for the price of 2?) the sudden radical policy changes will make the cautious business people more hesitant. Others have already pointed out the conspicuous references or lack thereof to Q3. Maybe tier goes up across the board? Maybe it goes down? Maybe they drop the price again? Maybe they raise it again? Maybe they do some other boneheaded move that nobody can predict, that rattles the economy even more.

Personally, I don't know if I'm angry or just concerned. I'm here for the long haul, but one of the factors in my island purchases has been knowing that should I sell them, I could get around $1000 back. Now I have to reconsider both current situations, and future expansions.

So back to my point. The value of our existing islands has gone down. Twist it or play with the semantics all you want but at the end of the day, the resale value is significantly lower than it was yesterday, and not due to market forces, but due to a stroke of the pen by the game gods.

-Atashi

p.s. maybe the q3 surprise will be, they change policy so private islands can no longer be sold or transfered. What'll that do to the resale value, do you think?

best equation is 5 new islands for the price of 3 old islands, so for every 1.5 old priced islands you get one free

Is the first month free with the 1000usd? I been thinking this overnight and without the free month, the region was only worth 1380usd to begin with. Still its a big chunk of change.

haha so much for people trying to get 20-30L and more per Meter for their "premium" parcels.

There was already too much land to begin with, with over 37000 parcels for sale on Mainland by 6600 people or something like that.

Flip This! "!"

I've lost value on the investment, not on the deal. Land gets resold around here, it's not a commodity that depreciates with age like a computer.



My tier pays for that.



The fact that LL allows resale is part of the economy here. Land and tier keep this place afloat. If LL want to sell land as a service only then they should be the only landlords here.

I guess the only answer, if you bought sims already at $1675 to base your business on, is to buy nine more of the new sims for every one you have already.

That makes it $1067.50 per sim! Get your credit cards out, it's a sure fire winner!

Imagine that there is only one home builder in the world, and that all homes cost $200,000. Some bought long ago, some are paid for, some just being built etc.

Now imagine that builder drops the price of homes to $100,000.

Sure, if nobody ever planned on selling there would be less of an issue, but either way the value of what you have purchased has just dropped and at some point it means a loss of some kind.

This all feels like the housing market in the US currently.

ORLY?