Why This Policy is All About Mainland Prices

Bear with me, because the following post is of Prokovesque proportions. The length is required because it uses numerous pieces of evidence to show that Jack is lying about mainland and openspaces, and the motivation behind the openspace price change.

First, here is a snippet of a question I asked Jack Linden today:

[2008/10/30 12:25] Aminom Marvin: How does this new openspace policy relate to the huge drop in mainland price in the last months?

[12:31] Patch Linden shouts: ====> What's the average land price (ML) and does the decline of ML pricing have anything do to with your policy change regarding Openspace sims?

Why it is a softball: additional question asked to set-up bogus statistics (average land price), and elimination of time period from months to nothing in order to allow vagueness of time period. Change of question to "does the decline have anything to do with policy change?" is an acceptable clarification.

Jack's Response:

[12:32] Jack Linden shouts: The Mainland average price per meter (mean average) has been floating between L$5.5 per meter and L$6.5 per meter for some time now. It's been quite consistent at that level with only small deviations for single days. And no, it had no part in this decision at all.

Notice that in noting the average price, it is not made clear whether this is buying price, or merely the price parcels are listed for sale at. This makes a huge difference. Note the vagueness in "some time now."

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Now, let us dig into the history of Mainland prices in the last few months:

http://blog.secondlife.com/2008/08/10/august-mainland-supply-update/

"The mainland price is remaining consistent, the Mean average being L$7.10 per meter over the last 7 days for individual buyers compared with a little over L$6 for Group buys. This is the number we usually talk about in these posts, and is an average of completed Mainland sales only (not parcels set for sale) and excludes estate sales, zero value sales and auction parcels."


http://blog.secondlife.com/2008/07/17/update-on-mainland-supply/

"For the last 3 weeks the previous decline in average Mainland price per meter has halted and the price is now holding steady at an average of L$7.25"

http://blog.secondlife.com/2008/06/17/mainland-supply-on-hold-until-july/#comments

"It will be no secret to those that have bought or sold land recently, that the average price of mainland has been falling. In 2007 we managed the price down slowly from a high figure of L$12 per meter to a more reasonable L$6 to L$8. It then rose a little as we reached March of this year before falling consistently since then. In recent days we have seen it dip below L$6 per meter which we feel is a little low."

"There are a number of factors behind this recent drop, not least the large number of Openspace regions sold through the new Land Store and the changes in island pricing. Of course the supply of new Mainland at auction is another factor."
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Huge Slide in Mainland Prices:

The new Openspace pricing and policies went live on April 24th. New land store with instant delivery went live on May 7th. This coincides with the "drop in mainland prices in April" that are talked about. on June 17th LL stopped selling new vanilla mainland sims and hasn't released any since, and in that post he admitted openspaces being a major contributing factor to the fall in mainland prices.

Now, is LL concerned about mainland prices? Yes; February, they announced major new initiatives to improve mainland: establishment of the LDPW, and addition of a new product: value-added sims, such as Bay City and Nautilus. This approach was obviously done to try to make mainland more attractive as a product. It has failed to do so.

I do not know if sales of Bay City or Nautilus land is figured into this- but it should not be. This land is fundamentally a different product than the majority of mainland, and is the most expensive luxury product on the grid.

Using Jack's own numbers, on August the mean average was L$7.10 per meter, and today he mentioned it being between $5.5 and $6.5. This is a drop is approximately L$1 per meter in two months- somewhere around 15%. Between July and August, the drop was 10% in one month. Before that, the average price was lower- but that was with them adding supply. To sum it up, we are seeing monthly losses in mainland prices of 7.5% to 10% despite them releasing no new vanilla mainland, and trying to make it more attractive using policy changes (banning ad lots) and adding roads etc.

During the same period Openspace sales exploded.

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Analysis:

To sum it up: Jack seriously distorted the issue by claiming that the price of mainland has held steady, when using his own statistics, huge falls in price are shown over the last few months since new mainland sims stopped being released. He does this by making the time period deliberately vague; by making the time period arbitrarily short, you can claim the value of anything has remained steady for "some time!" There is no doubt that there is a serious bear market underway with land, and it is uncertain if a bottom has yet to even be found.

Why would we see my question deliberately made into a softball that was so blatantly distorted? People don't lie or distort facts unless they are hiding intent- and in this instance, given the recent history of mainland and LL's failed attempts to prevent a continued price slide, it seems obvious that resource use isn't the real issue at all, but devaluation of mainland is the actual reason.

Yesterday, Jack Linden made a huge slip in the new Linden blog. http://blog.secondlife.com/2008/10/29/update-regarding-the-openspaces-announcement/#more-2742
Here is the relevant quote:

"We are saying that the use has changed, and continues to do so as people find more creative ways to use them. So the revised pricing is about recognizing that change of use and the additional costs and value associated with it."

As anyone knows, for two similar products, increasing the value of one product will devalue the other. This is precisely what has happened to mainland, what LL has acknowledged in the past has happened, and now, by proxy of application of simple economics- LL has shown is a reason for this price change.

Linden Lab needs to stop lying and distorting about the true intent about this new policy.

I'd describe it as being economic with the truth rather than a lie. I honestly think that Linden Lab simply don't think through their policies. I do feel that they can see that mainland is flagging and I agree that bay City and Nautilus don't really count.

They are certainly not admitting that they knew how openspaces were being used when it was clear to everyone and was even discussed at office hours. That is something they should be ashamed of.

I really don't see how this policy can boost mainland because people are pointing the finger of blame at Linden Lab, so their products are tarnished and it's something they probably didn't consider. People remember bad experiences for a lot longer than good ones on average.

Aminom hit the nail on the head.

It is not just about mainland prices, but about mainland period.

If LL does not reverse their price hike on sims, it will be time to ditch Island Estates.

I do not want to get stuck having to abandon a newly devalued Estate due to yet another LL policy change leave me unable to sell and unable to afford the new tier...Oh snap, kind of like what is happening to OS sims right now.

Whatever LL does the market will equal out after the initial loses and new residents come in with the new prices. So they can do this again to us with out a problem.

They want me on the mainland and that is fine by me, I will make sure to get my Elf Ass there before they make our Island Estate worth nothing but an overpriced tier fee.

Easy.

If prices for OS sims stay at $125/mo, LL without a doubt will increase the tier on regular Island Estate sims. If they increase the Island Estate tier, lots of people like myself and my partner will lose our business and our home and will not be able to sell the sim so we would have to abandon and get nothing out of our investment of $1675 for the sim we bought in March 08. However, if we ditch now, and sell our sim, we will get enough $L to buy a full sim on the mainland (with some of our own $L as well of course), and will be safe and have a lower tier.

It is a win/win for LL, because people already have to abandon OS sims and move somewhere.

How does it make sense to not trust LL and instead insert a 3rd person (An SL Real Estate Co.) to rent from and subject yourself to their financial needs as well as LL's financial needs reflected through them at the same time?

Yes, LL wants the mainland to flourish again and through hook or by crook they are going to do it. I am already signing up for the "Flee the Island Estates Express", and will gladly pay an extra $25usd above current Island Tier fee to own 100,000m2 on the mainland, and be secure in the fact that we know LL is not destroying the mainland any time soon. With the ability to build to 4000m2, the complaint of mainland neighbors is rendered void.

I wish I had your faith Briana, there's nothing I've seen here to suggest to me that Linden Lab won't stitch mainland owners in time. They have demonstrated more than once that they don't consider the big picture when making decisions.

Well you are right, and they probably will 'stitch' mainland owners in time - but you know how many times i have seen this happen? In the end, mainland is like a stock, as long as you as keep it, you have never lost the value. So you really have nothing to lose. We KNOW LL is not going to ditch mainland sales now, and the most they can do is increase mainland tier but they cannot do that unless they increase Island Tier, which in the end makes mainland even more appealing and still cheaper.

You know, i remember when Tier payments first went online and LL had a price list for paying your tier with Linden. There was the regular price of $10.95 USD for 1024m2, and then there was the Pay In Lindens price of $50,000L for 1024m2 monthly tier. It was really absurd.

They have not stopped doing the absurd. But they have burned us (my partner and I) twice now. We bought our sim Ninbriana in March for $1675usd, and in late March they announce the price drop to $1000usd, so they give us an Openspace sim free to make up the diff, and now that price is increased so that we will have to be abandoned the OS because they are like an albatross around your neck and you cannot give one away right now people are ditching them so fast. The next burn will come when they raise Island Estate tier. And I bet when they do that they have a special surprise for Grandfathered Estates.

I think all the signs point to LL muscling the Estate land market and wanting to re-invigorate their own mainland market. And you know what, that is fine by me, i just want to be out of the way of that pitch when it happens so i am not hit in the head with the curve ball. So if they want to herd us to the mainland, i see the message, i understand the message, i will follow the message, because if you do not, you get wasted.

LL really doesn't need to raise tier for mainland. Depending on how many seperate land owners are in the sim, LL can make more in tier for a mainland sim than they do for a private island. So that may give them incentive to raise island estate tier as you suggest.

I have fully expected mainland to go up since they increased the monthly fee on PIs to 295. I am still fair sure it will happen in time. Right now is not the time with so much land going for so little. But its coming make no mistake on that. If only because it hasn't increased in all the time I have been in SL.

That's a very good point.

Firelight

Absolutely! This is not about use (abuse) of openspaces and needs changing. Ok change the price but give details about what exactly that cash is for. I don't mean vague details like :



What steps? So you priced this without knowing what you are doing to improve? Quantify these steps so that we know what we are buying (keeping). So we have the same server, same software yet we pay more and get better performance. Is there some kind of new technology we have not heard that improves performance by pumping more air into the server or is that air going up our behinds?

I cannot begin to express how insulted I feel how LL is handling this. Yeah ok, you want to change pricing so that your product sells better or you feel you underpriced a product and wish to increase your profit margin. Well offer something decent in return for the poor bastards that helped you buy hundreds of servers and grow your grid to almost 27 THOUSAND private islands, the most popular product being the Openspace.

We all know that LL KNEW what the OS was used for. Ok go around and talk to people that make it worse for others by 'abusing' their own openspace sims you gave them with no agent limits and higher prims.
Jack talks about how unfair it is to the other owners on the same server. Well, Jack, what about LL charging EVERYONE for the so called abuse and not even be able to show why you are charging more than a vague 'improvement' promise.

Please enlighten us how you calculated how much more it would cost for you to make the changes for you to achieve this improvement and when we should expect what to change other than you going over to talk to the people to not use their openspace as a club?

This will rock the very foundation of the trust residents have for LL (or what's left of it).

"better reflect their actual usage levels in our pricing"
That alone states "if you all had used it for a forest it would have been fine but because you put a house on it or a mall we are going to charge you more for it and oh, tough luck for those that are actually using it as forest or ocean. If you think this is unfair we'll pretend to listen but do as we please anyway".

I think I'm going to throw up!

I agree to some degree but it's not just about mainland. It's also about full estate sims. People have been flocking from full sims to OS sims ever since the rules on OpenSpaces were changed (prim increase, new ownership rules, location rules). It's quite obvious that OpenSpace sims are underpriced right now (or the rest of the grid is overpriced whichever way you want to look at it). Why else has every estate manager been desperately converting full sims into OS sims? Why else has the number of OpenSpace sims hit 13,000 when it must, surely, have been just a couple of thousand before they changed the rules.

That's why I think the majority part of the reason is simply that OpenSpaces are worth way more than $75 a month and so LL are going to raise the price to meet demand as any sensible business would.

Yeah, but everyone is "bawwing" about the fact they have to pay 50 Bucks more a month now. They dont see the long term investments and dont want to pay more for something that was cheap in the past. They simply dont know how business works and all.

Now, the thing is, a lot of people want to leave thier OS behind and all, but what is with those that dont own land but still use it, like me, who is in several RPG Sims and all? Or those that have homes there? No, no one thinks on them. The landlords simply say that they cant pay it and thats it. Instead of increasing the rent/fees or put veondors and tip jars there to make additonal income, they simply grab everything and run.

Thats not good, you cant demand morale values from LL and at the same time treat the people who use your land the same way. Thats what is really pissing me off. Everyone who is rich enough to own several sim and whatnot, should be able to pay the 50 Dollars more. Its just a question on how you can get income from your inworld land and I think everyone should be able to make at least 50 dollars a month extra in SL.

So you do not own land, but are bold enough to say that Sim owners should easily be able to pay the 50 dollars extra? What a joke.

Thats my honest opinon, any problems with that? Well, do you own land?

That's really dumb and all.
I bet you can't even make 50$USD a month in SL (13.120$L) - You probably use SL as a gaming platform only and came from WOW or similar. Lucky you.

Actually this seems the real reason ..... I could have a plan for Mainland problems but rising the prices is never a solution , the solution is always offer something more appealing where masses move to .....

Nautilus and bay city arent a great hit I think becouse they do not offer more than othwe sim private estate owners offer I think and there uhave themed communities and so onthe only way to improve mainland sales is to make something really profesional and not based on a "copy" of what other private places do already...

Ok Delta, here's how business works:

You go and buy an apple and say it costs $1, you eat it all and go back to buy another one and the person you bought it from says "hey you ate all of that apple, you were not supposed to so from now on that apple is $1.60 BUT I'm going to give you a BETTER apple that looks the same and tastes the same and gives you the same amount of nutrients as the one you just paid $1 for"

Does that better explain the business model for you?

I would understand if there was a draught or the farmers were on strike or there was water from the himalayas that had to be imported to generate healthier apples then it becomes an cost and would be completely natural to increase the price. Us using what was given to us without limitations and now being charged more with no additional performance is just a scam.

And yeah sure everyone should be able to pay $50 dollars more for the same product they bought some months ago which will be exactly the same come January 2009 yet will cost more for absolutely no reason at all.

Since you are so keen on everyone being able to pay another $50 for what they have paid for and expected something for an agreed amount, would you like to pay $50 a month to access SL from now on? Perhaps we should all pay $50 a month to log on and be done with it.

Sure, I would pay 50 Dollars a month, I mean WOW also has server rents, that isnt something new, but I doubt its done, because that would be too much in the current situation.

Well, question: how do you people use your virtual land and what do you get back form owning it? Is it just a hobby or can money be made with it? Is it just a hobby or more?

No one wants to live NEXT DOOR to anyone else. The mainland is PACKED with people, houses right up to the borders. Forget the adverts, having next door able to look into your bedroom ruins half the fun of having your own sex bed, and lets face it, we all have one of those, freebie or otherwise. An island is everyone's dream, likely as much in RL as SL. If the main land as not so DAMN ugly, with some SPACERS between land plots and RULES on useage, you might see less people running to the cheap open spaces. Not to mention the open spaces lag LESS than the mainland. Which is amazing to me.

I agree with the OP, it probably is about mainland prices, their new residential estates and anything else related to profit margins. I just woke up, so consider this me still dreaming, but I'd like to see a total grid wide wipe. Redistribution of land and new strict rules on usage, zoning for residential and commercial. Running a sandbox world assumes the populance has some level of common sense and some understanding of planning. The mainland is a mess, has been for a long time. Sort it out and maybe, just maybe people will want it. Oh and while I'm dreaming and ranting, BAN, ban lines.

No problem at all, you can have any opinion you like. And I can just as easily have the opinion that what you write is a joke.

And depending on your definition, I do own land. To define that: I rent a good chunk of land at an estate. After abandoning the open sim because I refuse to pay 67% for the same goods. Month after month. I rather use the profit of my business for other things.

Your question about how users are using their virtual land is completely irrelevant in this discussion. You say that it is easy to make 50 dollar more in SL to make up for the extra tier, and however even that one is irrelevant, tell me how they should do it? As it seems you are the one understanding how business works.

The fact is that LL increases a maintenance fee for a product they sold with 67%. And people who are faced with these new fees have every right to "baw". That is why I think your posting is a joke: it is so easy to attack the victims of this Linden policy, when you are not affected by it yourself.

I'm not in the land business, I rent land and I have a business with content I've created. I am living on OS, and probably I am abusing my SIM, but I was never told about this or the specific limits. To me VOID and OPEN were different SIMs. Besides I believe you can do as much damage in a full SIM as in an OS, since there's no script limits ANYWHERE.

I figured you were the type of paying for your game, it's your option, but some people like the game to pay for itself. Especially if you made investment and expect to get the money back and maybe some profit, and this is a long term deal no way you can get investments back that fast, takes years. If they keep increasing prices "just because they can", it's obviously going to have unpleasant consequences.

Imagine at WOW, all the sudden having to pay extra 50$ for the same thing, no upgrades or anything, just because. Already inflation is a pain, so this is crazy.

Like, you know, is this for real?

Please send me L$ 13750 per month and I will guarrantee a great 3D chat performance + low price server rents for you.

Yes we make money it costs L$ 50 for entry to our regions and L$ 500 to leave. So yeah we can afford the $50 a month but we'd rather use it to buy beer.

Seriously: Please ask questions somewhere else does this look like a "how to make money in SL" thread?

LOLWUT?

No.

Well, currently, every thread turns into the same direction: Ranting about LL and thier descion to raise the fees.

No, I didnt meant it for real, it was pure sarkasm, but yeah, I apologize, was not good to write that here, I´m sorry. In the end, we all are sitting in the same boat, because everyone looses wehn people give up thier OpenSpace Sims. That Mainland isnt a option, is a point a lot of people said.

Thats another thing, in all the threads I have read here, its the same things all over again, the endless repetition of rants, accusations, conspiracy theroies and threats we all heard about. I can understand that you epople are upset and angry, but just leaving everything behind and run just isnt a option. I also dont like the fact that its still 2 months till the price change will be taken into effect and people are already leaving. Why not at least wait 2 months and thend leave?

I say this because, if you leave now and they are not going to change the price and step back from the descion, you left the OpenSim for nothing and set a lot of people onto the virtual street.

Hell, I there is a way to slove all this for the good of both parties. I say, lets wait and see, you can ditch your sims and SL still after 2 months if you people feel the need to do it.

If you see how LL worked in the past, the chances are not too big that they will turn back on their decision. So what people are doing now, is damage control.

If I take my own example, I immediately left my open sim (I just had for 2 days.) because I have a business to think of. Already lost a lot of revenue by the move to open sim, so what is the use of building my business all over again twice?

There are a lot of people like me. They read the news, know they are not wanting to pay 67% more, and search for an alternative. So the sim owner sees his tenants leave the OS sims, and has not much of a choice. And that is only the rentals. Not many landlords will abandon sims that are still rented out

What about the estates with open sims for the sake of making their estate look better? Who pay 75 dollar per sim just to please their tenants with recreational sqare meters? I can fully understand when they abandon those sims, because why pay 150 dollar per sim from now until end of the year, when you know after that it is over anyway.

In the end, a lot of open sim owners probably abandon to make a statement. Too bad that it does not work, because it doesnot hurt Linden Labs. Only more servers to put mainland regions on.

Finally, is the price of 125 dollar worth it? Probably it is, considering you have a full region, full control, and still 3750 prims to play with.
But the fact whether it is worth it or not, is not the question here. LL deliberately made is as interesting as possible for users to get an open sim. They doubled the primcount, made them cheaper, removed restrictions of 4 open sims per buy. If they really did not expect a rush on these sims, there were plain stupid. But I still believe the are not honest about it at all, and they did know.

So first tempt people into buying a product of US$250 with a monthly maintenance of US$75. After enough people purchsed the product, raise the maintenance with 67%. No matter what arguments LL tries to come up with, this is simply a con. Plain robbery. If they did not make it extra interesting to buy open sims, I would not be this harsh, but they did. They even gave them away to people who purchased sims just before the price drop. Isn't that the perfect gift? One that generates 125 dollar each month?