Should LL reduce tier to keep the failing economy in SL alive?

To steal a question from the blogs, i am bringing this to the forums...would love to hear some other oppinions, observing the glut of mainland since the adult content creation, to the loss of jobs in RL in USA, can LL really afford to keep their tier at the top of the scale, or will the glut continue as players abandon land?

All things considered, there will be more and more up and coming "games" patterned after SL, such as Open Life, that will be considerable competition in the very near future.

(read the blog here: https://blogs.secondlife.com/thread/3834#3834)

I think the assumption that serious competition is coming is unfounded, only because I rather doubt there's currently all that much money to be made in this niche of the industry--especially the mass-market bit (as opposed to the high-ticket "enterprise" VR market, which is a whole different problem for LL). Sure, Blue Mars will get some business--perhaps enough to remain viable, but it's not going to be a goldmine (or Google wouldn't have folded Lively without even trying). Tthe cut-rate SLs, based on OpenSim, are extremely unlikely to matter, ever, to anyone wanting non-trivial content and the micro-economy that makes that content possible.

That's only to say that competition probably won't be the main motivator here. That's *not* to say that tier rates should necessarily remain as high as they are now.

LL rather desperately wants to entice more people into initial land ownership. It would be gravy if they could also speed up the craving to acquire more and more land (although in fact that seems to happen pretty quickly and consistently anyway, at least up to "big hurdle" tier jumps, which are another problem).

Somebody must be thinking about flattening the Mainland tier structure completely, to make initial entry cheaper. At full-sim tier costs, a 512 would be only about US$1.52/mo, instead of US$5. Would that bring people in sooner?

That would have several other effects, though. For one thing, unthemed "commodity" Estates would be driven completely out of business, more or less instantly, if the Mainland price advantage were transmitted all the way down to entry-level parcel sizes. It would also remove the natural inclination to buy land to fill up a tier level--although remove the barrier to jumping to the next tier level or having to rent tier; I'm not sure whether on balance that would increase or decrease the rate at which people grow their land holdings.

My sense is that they're more focused on making Estate land more attractively priced at the entry level, by offering special deals to Estate owners. I suspect they're still playing around with alternative incentive schemes for those Estates. By keeping entry-level land ownership within Estates, LL gets the Estates to pick up significant support demand for start-up landowners--a huge disadvantage of cutting entry-level Mainland costs.

Hi Cinda,

Open Life is nowhere near ready to be a competition to SL and i can't see it becoming ready anytime in the future.

Open Life may as well be called "Temp Life".

I think they should restructure the tier levels so there are smaller increments - not doubling exponentially but increasing at a fixed size after 1024 sq m.

I don't agree. I think Blue Mars will be successful, but it will be competing with IMVU, not Second Life.

Should LL reduce tier to keep the economy alive ?

Absolutely yes, yes, yes !

Current tier prices are obsurdly expensive and Secondlife is the most expensive computer entertainment on the planet - if you want to be a TRUE resident

Tier is so expensive that after paying their tier people have little or no money left to shop - High tier payments are draining the SL economy dry

It may already be too late. Even if LL reduced tier dramatically at this point, the lack of brand loyalty and current perception of SL may cause considerable user migration to new virtual worlds like Blue Mars

LL have never had a competitor for virtual land and it's quite possible that they will lose their 'First to Market' advantage as SL mover and shakers and content creators start to migrate to Blue Mars. This is already starting to happen

Super high tier payments are literally killing the SL economy in a growing market. Check out the figures for Yoville, Cafe world etc

Super high tier payments = slow sales = demorilised content creators = less new products = even slower sales = weak dying economy = migration

Here's another idea to maybe toss around...what about LL charging a sales (tax?) say of 2%..?

There are many creators and merchandisers in SL that are doing rather well..and 2% surely wouldn't hurt that bad. Take for example, the Sion Chicken guy, to my limited knowledge, he never owned land, but only had that small booth for his sales. While he greatly contributed to the fun of SL, what percentage went back into the game to cover costs?

To me the cost of SL is undoubtedly one sided, land owners are contributing on the high side of the LL profit margin. That being said, we all note the influx of merchandise, but land ownership is cratering.

@cinda - actually a sales tax of 2%-5% is a brilliant idea. That way land wouldn't have to be so expensive.

Right now LL are pricing themselves out of the market they invented

If a sales tax of 2-5% cut land cost significantly, I'm all for it. Spread the load, gather revenue from all users, not just people who own land - that would be a much fairer and healthier business model

Considering the number of sims and parcels out there, it doesn't seem like LL has priced themselves out of any market, since they own the only market.

I do agree tier prices should be reduced and what Deira said.

BLUE MARS....?? *runs to go look*

On in-world money transactions? You do know they already take a "sales tax" on XSL, right? And they already take a 3.5% income tax, effectively, from LindeX.

That wouldn't hurt the big guys much, but it would clobber the small ones, it would effectively be an increase in Tier as far as I'm concerned. Plus all the microtransactions that go on between residents?

Aren't Yoville and Cafe World Facebook games? What do they have to do with the price of land in SL?

Lets not forget, you can buy the hardware for a region physically for about $150-$200US these days. Sometimes brand new (depends on who you get it from).

The grid is running a previous generation of server hardware already. The blazing fast class 5 sims should be lowered in tier. Down to the same rates as class 4s now.

What LL really should do, if they want to develop mainland so bad, is put a simple CAP on the amount of Private regions an AV can own. Think about it? It'll halt the big guys from over saturating the market immediately, and the little businesses that make SL strong, would still have room to grow and make their niche communities.

This would be great, especially if it was a round about number like 8 regions or so. A shrewd land owner could make more then enough cash off those lands to pay the RL bills too.

Gotta admit, I pay little attention to the economy in SL, but hell yeah they should reduce tier. I've had my eye on this piece of land for months that remains on sale and unused, and I can't pick up since I just can't afford to tier up that much. *grumbles*

Yeah Argent, i do know that, selling L all these years, but i note the buyer of L is getting it at 247 per $1 USD, and the best going rate today is 259, so the actual buyer and spender in SL is getting hit just as hard. I still think LL needs to do something to encourage land ownership and thus more loyalty to the product.

Land tier is way over what it should be, anyway you want to look at it, you'd think by now we would have paid off the corporate yacht.

Whether the economy is failing is open to debate. I know one mall I rent at is closing and another has been losing renters at a serious rate of knots, the latter however lost out due to the bot ban. This should mean someone else is getting that business because the fall came pretty quickly on the back of the bot ban.

Another issue has been the camping ban, have people left SL due to the lack of camping and therefore spreading money around the economy.

Then of course there's the RL economic issue, which simply can't be ignored, lower tier is hardly likely to tempt those who are leaving due to RL reasons to stay, so LL wouldn't be stimulating much growth.

LL should advertise more, even on Youtube I see virtual world adverts, SL not being one of those adverts.

Everyone would just increase their prices by X% to compensate which means that people who are already (in)directly paying their way would be forced to pay even more.

Anyone who pays tier (be it directly to LL or as rent or being premium) is likely already paying their due; people who don't rent/pay tier/aren't premium may or may not but still are needed because they form a big portion of the US$ flowing in that is traded for L$.

Which leaves the "no payment info" masses who don't play any economic role, so if more money is needed they'd be the ones to force to cough it up and a sales tax wouldn't matter to them because they don't spend money in the first place.

That is a very bad idea.

LL already takes 3.5% in lindex fees when you take money out of SL using the Lindex

Having a tax on each micropayment inside SL would slow down the economy.

Reading that, you remind me of when SL was on G4 and the Science Channel a few times, they also made Time Magazine a few years back due to Chung getting her first million.

With how quiet their marketing team seems to be the past year... I do wonder if the Lindens are suffering from a bit of "Victory Syndrome."

Yoville and Cafe World are mini virtual worlds - 2.5D

You can have an apartment in Yoville , you can introduce RL funds and you can buy virtual goods

Yoville have 20 million or so monthly users and Cafe World are picking up about about 800k to 1 million new registered users a day

The people that use these mini virtual chat worlds are also SL customers, they just don't know it yet

This is the real market that LL are pricing themselves out of.

Sim price should be :
OS - 24USD per month tier
HS - 49USD per month tier
FS - 99USD per month tier

Even the above prices are still fairly expensive for the mainstream

Where are you getting that number from?

Can you create stuff inside them, like an actual world, or are they just chat systems with paper dolls and wallpaper?

Where are you getting that number from?
Can you create stuff inside them, like an actual world, or are they just chat systems with paper dolls and wallpaper?

http://jira.secondlife.com/browse/MISC-3007

I play Cafe World myself, but comparing that to SL in any way is a bit of a stretch, in my opinion.

I do agree about marketing, though. LL has always been terrible at it. I never see any mention of it in mainstream media outlets, save for scandal stories, and when these appear, LL never answers them in an positive manner.

You got it. In Cafe World, you can't leave the cafe. it's a cute time waster but that's about it.