Price Increase for Islands...Poor Timing?

this is all making sense now.. I am so glad I waited to get my own sim. I will wait just a bit longer, who knows what will happen. I would not have issues with the now price for land, but that monthly charge is killing a lot of people.. And if they can't sell or rent... yikes. That's what has been holding me back.. I understand people are getting frustraited with SL and droping off left and right, despite the inflated member numbers..

I think 200 a month is reasonable. I can get a dedicated server for a web page for way less than that and if I understand it, which I might not 100%, that's what SL is? no?
A hard drive on a PC in la la land?

And I'd like to have my inventory on my own PC please, thank you.

Yes, I see the problem, but LL are only likely to have reduced island prices because they needed to for commercial reasons. OK, it might have been sudden, but if they'd said 'we're considering making a major reduction in island prices in a few weeks time and we thought it only fair to give advance warning to those who might be considering buying', that still wouldn't help people who'd bought an island the day before the announcement!

Also they did do exactly that, the price change isn't taking place for 2-3 weeks.

I've done a lot of thinking about this issue, and talked to some friends familiar with SL business about it. I've come to the conclusion that this will be good for the economy.

Owning land increases user retention and provides an enhanced SL experience (though one can be landless and still enjoy sl). Initial costs are one of the things that limit land ownership because one will have to put out more money to try something. With reduced private estate initial costs, one will surely see a reduction in either the monthly rent (on rent models where one does not "buy" the land upfront) or in the price to "buy" the land. This makes land ownership and renting more accessible to the new user, and the first-time land owner.

Of course lowering the mainland price by adding more land is a smart move for the same reasons.

The people who will see temporary losses are land speculators. However, as their role is merely arbitration in the land markets, their losses will not effect the economy as a whole. Nor should they feel that LL has somehow "wronged" them; they knew fully well (or should have) when they started that speculation in land markets is risky and has the potential for losses. You don't see RL commodities speculators (such as precious metals speculators) take up arms when the government and/or the fed takes measures to strengthen the dollar or economy, which has the effect of reducing the price of commodities.

Land barons that add extensive value to the land they rent will see limited impact, and at best, increased business as they are able to expand their land for less initial costs, which will put their new sims in the black far more quickly.

Content creators will definitely see increased sales, as the influx of new land will give higher demand for content to put on the new land.

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Predictions:

Mainland tier is antiquated and senseless. The monthly cost per square meter decreases rapidly as one owns more land, which has the effect of punishing small land owners. I predict that LL will change mainland tier to be more even, perhaps with a set price per square meter per month nomatter how much land one owns. Also, premium membership may change, and one may not have to be premium to own mainland. Perhaps the new rate will be $250 per sim, which would work out to $3.9 for a 1024 per month, as opposed to the current $8.

The new mainland continent will have much better terraforming than the previous continents, which seem to have been generated using an algorithm. Expect more fine details in terrain, and less large expanses of granite. Also, the continent may be released pre-roaded-up.

LL will provide refunds for people who bought islands within 30 days of the recent blog announcement.

you dont have to be premium to own mainland.

just 'buy for group' with no payment info on file, as long as your group has tier in it. witch can be rented. at much cheaper rates then you get from LL

Add mainland landlords to the list of folks getting hurt. I would expect an estate explosion with the massive lowering of prices, and an increase in large landowners on the mainland. A boom in ownership and estate opportunities forces mainland landlords to cut prices to remain competitive. We have to provide a viable condition that makes rental noticeably more advantageous, other than the freedom from commitment. Prices have already started coming down, with a growth in large landholders willing to price at 1.5L/prim or less(!).

With a flood of new mainland on the way, I would expect this price to go even farther south. You have to add a lot more value for less return on investment. Great for the basic players who want to rent, but as a landlord who already spends too much time as is on this stuff, I'm not thrilled. Cutting prices so low means that we have to have greater fill just to break even, much less offer services like having a property manager or two or three to help. You literally do have to make it up on volume. It's bad enough that we have to value our time at next to nothing, and do LL's job for them and teach new players how stuff works.

While overall the increase in land supply is good, it had better be accompanied by an increase in people willing to put some money into this game.

yepyep I do this now for the mainland I own. However, what prevents things like this from being a widespread business model is that you have to explain the whole thing to potential customers, and for newcomers the process of renting tier and using group land can be confusing.

I love it when my customers bump into each other.

I just wanted to say this in answer to those saying there was no warning that something was going to happen in the land market.

First a new continent was made with huge amounts more land available.

Then, more sims and abandoned parcels were auctioned recently than in any time I can remember before.

Then the Open Space sims were made more accesible, prims were doubled and you can get them singly now.

These changes did not occur over a long period of time really, though they were staggered.

Surely these were the warning signs that prices for land were going to head south sometime soon?

Was this not a heads up that caution should be exercised?

Yeah, that would have been fine by me, too.

coco

Hi Elanthius.

Another satisfied customer

Any way, with Elanthius and Raymond looking in here, I have a question. I know it has been only a short time since the announcement, but do you see any trends in land sales by volume or price?

Also, as to the economics involved, LL employees are not economists, they are techies (and perhaps not all that great at the tech end either). Countries with access to "great" economists make stupid mistakes, hence the RL situation as of late.

i feel there are is a misconception, although purchasing of a island will become cheaper/easier the fixed costs remain the same, this is the great advantage for mainland owners, they can operate at a lower cost, which in turn straightens the market out. Surely purchasing prices will come down on mainlaind too eventually, and owning a full mainland sim will be possible for more people, which in its own turn results in a more prettier mainland


* i read somewhere more estate owners where willing to offer land at L$1, this has always been the case since i joined SL (dec2006) , almost sure there is a large group of estate owners out there that consider selling their land to a "renter" as a scam.

Mainland prices are dropping substantially from a base of L$8.4 per meter before the announcement to a base of L$7.4 per meter right now with a few plots listed as low as $L6.8 per meter. Don't know what the volume is.

Two well known barons are doing major dumps which is helping create this drop. The last time they did this I picked up some really nice waterfront for cheap. Too bad I don't buy land anymore.

Could there be a possibility that this is linked to the downturn in Premium accounts (because cheaper mainland = more Premiums)?

There's no doubt they are hoping cheaper land means more Premium accounts. But they'd get more people to go Premium if the gave us a reason to upgrade beyond the ability to own land. A stable Grid would also help.

Although tier is commonly the basis for pricing, what do you expect to happen if there is a greater surge in the land supply? Someone has to own it. Someone pays tier on it. It's not going to be all of the same people. It is increased competition all the way around, which results in even thinner profit margins. I stand corrected - I would expect an uptick in island ownership and mainland ownership as well, making the competition for tenants even sharper than it already is now for both estate and mainland landlords.

I don't think so. When I "bought" my land on an island, two and a half-years ago, I paid a purchase price for it. But also, I can sell it if I like.

Whereas the "renters" there don't have the option of selling their land to someone else and keeping the profit; at least it was this way last I checked.

And certainly those guys aren't scammers at all.

i rent-out several parcels myself, and have seen that rental competition indeed already has fiercly increased, i have seen offerings in this forum that dont make any sense at all (work/risk vs profit). I try to be available most of the day, give the best service possible , and be a small Support-portal to my renters for all the common and other stuff i can help with, something a large group of land-lords doesnt seem to do?, but also like i said lower land prices would also mean people can get more land and therefore have more options to beautify it, and attract renters.



*concerning the L$1 ? , i only state what i saw ?

*also i dont fully understand i guess ?, why should a renter be able to sell , something they didnt buy ?

Um yes renters do have the option just offer your rental position on the market for a price, assuming the rental is good enough to be worth something, most landlords won't have a problem with you sourcing a new tennant for them when you leave.