How Low Will It Go: Deluxe Edition!

1 server = 4 sims I thought.

I could have sworn that I read in here or the blog, that LL wants the land price around 6-8 sm. They should be there by next month.

With the way they stabilized the price of lindens, I have no doubt that they will be able to do the same with the price of land too.

I think LL thinks it will snag new people to pay the tier, since tier is the real moneymaker.

As for the auction price, I think they are banking on the low prices being an inducement for new baby barons to get back into the game and prop up the auction prices. What they haven't figured out is that there is a good number of people are refusing to put any more money into this game while the platform is so unstable. Why should someone buy land when their inventory can go poof and LL will give them the middle finger?

but they _did_ create the scarcity. for whatever reason they decided to allow prices to increase all year, then turned around and flooded the market. it will be interesting to see what will happen to the landlords and their rent sims now that land is becoming a worthless commodity.
you could be next mate. maybe in a future update they'll just bork every skin youve ever made. maybe they will post a blog saying 'in an effort to comply with blah blah from this day forward all skins must be pg rated.' dont think its impossible, i put nothing past LL anymore.

yes, they charge 4 people for the same box (which none of them actually own).

The scarcity came about because they weren't staffed well enough to crank out the islands once the flood of island orders came in. LL released sims at this pace a couple of months ago with no significant drop in auction price - what's the difference this time, except that the grid is so unstable you can't even be guaranteed of your land purchase?

Don't forget Borgbeef. As stated previously, I would kill my grandmother with a broken lawn chair to own it.

Also, for the record, land purchase price IS the reason I haven't upgraded to premium, not the tier.

The difference is that when the did the last flood the in world price for land was around the L$20 per sqm with those buying a sim at US$2000-3000 making a nice profit margin.

After the flood, the in world price was around L$12sqm (give or take a bit) but the land barons were still bidding since you could make some profit of a sim acquired for US$2K-3K.

We are now however seeing in world prices come down to L$7 or L$8 per sqm - at that price if you bid above US$2000 you will either be selling at a loss or have a hard time selling off the land before your next tier on it is due.

Add in that there is still lots of land from the last flood of new sims, additional land from casino barons cashing out, general slow down due to the holiday season, concerns over SL stability and problems etc. it isn't a surprise that land barons aren't buying at the moment.

As I said a few weeks ago, I suspect we will have a number of no sales soon, followed by a sudden rush as people realise they may be able to get a mainland sim for US$1250 (not so attractive as US$1000 - but I suspect LL reaslised this hence the increase in base price), and then a stabilisation around US$1750

Matthew

I still think there's a market for rentals for the following reasons:
- some people want a cool and established place to live and play in when they want with the option of leaving/no longer renting any time, and not worry about being bound to tier
- some people just don't want to build, script, create etc. They want to explore and have fun
- some people are disabled, see point above
- some people want to live a new place every few months without having to rebuild themselves

Basic rentals, land rentals, prefab rentals... a dime a dozen. What's not is a community experience -- for those who wish such. It takes time and money to develop a beautiful area... most people don't have that. But they want to live somewhere beautiful.

Not necessarily true; land prices were only that high due to the effect of resellers. The profit margin of first cut land has always been somewhat narrow, and rarely did an end user get to buy first cut land - they didn't spend their days staking out the land search.

I bought a sim around this time, and the reason the land price dropped was because the glut was starting to hurt the resellers. What we are seeing now is an overload, and it's the resellers whose backs are broken. It is now very possible to buy a good first cut of land, and all the profit is going straight to the sim owner. LL is effectively cutting out the middle man.

The established barons saw an increase in competition from the first glut; it's the new barons that aren't buying, leaving the bargains to be had by... the established barons once more, and the brave.


I don't think there will be any no sales. I don't think the established barons would pass on it. The rush may occur, but there is still the factor of the open sourcing of the server to contend with, as well as grid stability. These are uncertain times, and it's no wonder the demand has lopped off.

You know, thinking about this a little more closely, none of these auctions are supporting prices below 7L/m2. What kind of fire sale prices are casino lands going for??

I poked around lands today and I've noticed that land griefing is seemingly on the rise. i.e. Placing garbage on a small plot to "grief" and uglify the surrounding area and putting a high price tag on it. I'm wondering if this is on the rise by those wishing to recoup costs or a reaction to losing money due to the plumetting market.

49 new sims on the auction list. Price is going to get lower than 6.7 L$/sqm

So, they did raised the starting bid to protect their profit margin.

How low will it go?

Yep. There's a 16m plot smack in the middle of Aqua Shopping Park with a screamer on it, with the plot priced at 10k. It's completely destroying business for all the stores within a half sim radius of it, and nothing at all I can do about it but file ARs and restrict audio so people can't hear it. I truly hope there's a special place in hell for people who do that kind of thing. No way will I cave and pay extortion money though. Why LL hasn't purged the grid of all instances of that evil thing I can't imagine since we know they have the ability to do it for gray goo attacks.

Fall is coming.

We'll see the September Glitch, as college students run off to sexually recruit^H^H^H ah - attend classes, as Parents drop dead-exhausted asleep and forget the internet after the war^H^H^H Back to School for the kiddies... as Labour Day and the last sunny warm days take their toll.

Then... slowly... late September... everyone gets back into the groove, and the parents are sitting up with a glass of wine, nothing's on cable, the kids fell asleep over their homework... and the metaverse whispers its sweet song of Escape.

By late October, the dead cat bounce of the Great Winter Rush of 06/07 will begin. By late November, the land market will be tight. By late December, record levels and the Winter Holiday Shock. Record numbers on the grid, the Company on a skeleton crew, griefers out in force, the asset server sipping Mohitos in the Bahamas without us.

January will define user concurrency for all of 2008.

* * * * *

The Company is pretty smart. There's no way they can roll out land throttled precisely to match demand - drizzled in low times, flooded at peak.

So they are pouring out a good amount now, knowing high demand is coming in a few months, knowing people will be entering the market and not wanting to sticker-shock them with $L 12/meter.

As for setting a fixed land price, as Chip suggests - I think I know why they don't. They are trying to let demand *somewhat* control land price, so they don't overprice it or underprice it. (yes, underprice - if it's too cheap, it will not be valued - sadly price perception is MUCH more powerful in terms of virtual worlds than in first life where we have actual necessities like eating or shelter).

Fixed markets create horrific shortages and competition. I well know this, because in microcosm my regions are exactly this. High demand, yes, but spawning competitors left and right. I have had people tell me outright that they are trying to capture the people stuck on my waiting list. The reason I'm this way is because Caledon is hard and slow to make, and communities need some time to form - which is what trumped economics for me.

Look at what Anshe does - she's wise enough to keep some 'stock' of land available for customers whenever she can. That ensures she can serve customers immediately, suppresses competition by other land barons, and suppresses secondary markets by 'mini-baron' customers on her own turf. I.e. those that would take advantage of the overfull situation by reselling at high rates.

Anyway... just one man's opinion - take it for what it's worth.

Desmond, I enjoy reading every one of your posts.

Stay tuned...if I get the sim I want (and no, it's not Troll Sweat) folks will have a lovely resort community as a renting option. At least it's lovely in my imagination.

YAY! I look forward to it. We've been building up our community for a while and even though our lands (1.25 connected sims) are still being tweaked, our renters really love the feel and amenities. Glad there will be more "pretty" in SL. And I'm sure it will be at your hands. And no Troll Sweat

well theres no doubt that theres an aesthetic appeal to rental sims. and its nice to be able to walk away for whatever reason. i do see the advantage for the renter. and there are some established people out there that have a history or have a build. but for the smaller guy is it going to be profitable? when land value is so low that renters can justify an extra $5 this month and BUY a plot instead of renting? will prices on rentals be driven down? far enough that the margin is so narrow its not worth the effort? will the bigger guys lower prices and push you down even farther?
im not saying this is fact, but these thoughts would make me hesitant to jump into the rental game without some serious thought.
raymond has probably thought about this and run some numbers. maybe he will chime in.

i think one of the best things LL could do is make some changes to the land buying experience. for example, instead of a simple right-click>buy now, what if there was a right-click>buy mode? once in buy mode property lines would be on by default. perhaps even do something to draw attention to <48m plots. and then from there buy as usual.
at the minimum bring up property lines when someone clicks buy! as it is it is too easy to shaft inexperienced buyers shopping for their first 512, and that can do more damage to their sl experience than any amount of generic griefing. why do we need 16m plots anyways?

i think one of the best things LL could do is make some changes to the land buying experience. for example, instead of a simple right-click>about>buy now, what if there was a right-click>buy mode? once in buy mode (about land) property lines would be on by default. perhaps even do something to draw attention to <48m plots. and then from there buy as usual.
at the minimum bring up property lines when someone clicks buy! as it is it is too easy to shaft inexperienced buyers shopping for their first 512, and that can do more damage to their sl experience than any amount of generic griefing. why do we need 16m plots anyways?

I liked the one called Foyle Gully. Any Alfred Bester fans out there?

No good reason I can think of. The plot's actually been there for years and has always been priced absurdly high. The guy who owns it might not even be around anymore. The screamer belongs to someone else. Maybe it was just dumb luck that it ended up on the one 16m square in the entire sim where it wouldn't get auto-returned.

Hmmm... normally I agree with pretty much everything you say, Chip, but this doesn't sound like very much "fun." I really enjoy searching out bargain plots and haggling with the seller. Like someone else said, land buying and selling may be hobbies for people, and their main reason for remaining in SL.

I just can't help but think of all the bad behaviors which wouldn't exist if land was always a set price, and for a long time it was back in SL's Jurassic period.