Actual Islands Lost so Far/Economic impact

The highest island count as reported on the economics statistics page was Oct 29th, representing data through midnight Oct 28th. That's the day after Jack Linden's original blog post at 6pm on the 27th. I will list the stats below and calculations based on them. Note that the dates listed account for data through midnight the previous day in all cases:

Date..........Island Count.....Change.........Avg/Day..Last/Day
----------------------------------------------------------------------
Oct 29.......26,665............. 0...................N/A........N/A
Nov 4........26,422............. -243..............-40.5......-40.5
Nov 6........26,311............. -354..............-44.2......-55.5
Nov10.......26,172............. -493..............-41.1......-34.75
Nov13.......25,981............. -684..............-45.6......-63.67
Nov17.......25,744............. -921..............-48.5......-59.25
Nov19.......25,574........... -1,091.............-52.0......-85.0
Nov21.......25,434........... -1,231.............-53.5......-70.0
Nov24.......25,119........... -1,546.............-59.5......-105
Nov26.......24,889........... -1,776.............-63.4......-115

Note also: the trend prior to Oct 26th was to *add* around 40 per day, so the "total losses" are the actual reduction of island count + the expected gain in islands based on past trends.


Economic Impact on Linden Labs:
--------------------------------------

Zee Linden provided two data points on land distribution in his 3rd Quarter economics discussion. One is that there were 10,337 open spaces as of 30 Sep 2008 paying maintenance (ie past the first month when they dont pay tier)

The other was that on 14 November the land distribution was 39% full islands, 44% open spaces, and 14% mainland. The unaccounted for 3% I assume is linden-owned land.
The total islands reported in the economics statistics is 25,922 on Nov 14th, so that implies 13,742 openspaces. Those numbers are inconsistent, since only 1045 islands were added in October and 1688 in September, which yields a maximum of 13,070 when added to the 10,337 paying maintenance as of 30 Sep.

Given the discrepancy, I will assume a range of 13-14,000 openspaces as the peak number.

Zee Linden also mentioned "we are seeing a lot of conversions" of four open spaces to one full island. Let us assume that conversions are 75% of the change, and that cancellations of full islands are the remaining 25%. Then each hundred lost from the total island count is 25 full islands, and 100 open spaces converted to 25 islands. Thus the full islands cancel out, and all of the loss in island count is openspaces.

The income calculation then becomes easy. 13,000 open spaces x 75 a month = 975,000
10,263 open spaces at 95 a month post 1 Jan 2009 gives the same income. So if they lose more than 2,737 islands, total income will be lower. Similarly, 7800 open spaces on 1 Jul 2009 would also produce the same income at 125 a month.

You hurt my head.

Can you simplify it for the simple minded like myself?

from what i read ( and yeah i struggled to understand it to lol ) 4000 + abandonments will need to take place befor LL feel any impact .... But they will save on overhead costs from all the disused servers ?

i could be way off ...but thats how i read it .... Let me read again with with my head turned to the side and squinting

There is two parts to this analysis:

(1) How many islands have been lost from the map?

That's simple headcount - 243 total, or 40 per day

(1a) How many islands have been lost compared to previous trends?

In October, before Jack's blog post, the trend was to add about 40 islands per day,
so the total loss due to the announcement is double the actual count, i.e. actual losses + expected gain that didn't happen, or about 500 islands total so far.

(2) Does the proposed tier increase end up making or losing money for Linden Labs when you take into account lost customers?

That's more complicated, but based on some assumptions I made, the answer is if they lose MORE than 4,500 islands by Jan 1st, the price increase will have lost them money in total. They will have lost more tier from lost customers, than gained from price hike on the remaining ones.

Wow i had no idea what was being said.

Thanks!

That is a lot of islands lost and that probably will not happen.

A third part is how many of these losses are actually down to the current financial climate and nothing to do with the proposed changes....

Thanks for the noodle head version

So i was right ... 4000 + OS need to be dropped befor LL feel the pinch .... The lost teir fee will be the factor rather than the abandonment .... we will just have to see how upset people are by this policy and how many people just CAN'T afford the hike .

My guess is a lot more will abandon due to not being able to afford as this was more likley the motivation for taking on a OS in the fist place ...they are cheap .

Add to that the people who will refuse to pay on priciple ..... i think LL are taking a huge gamble if your assumptions are even close to being correct ..... maybe this will account for the dealy in responce from LL as they all huddled round a calculator doing the math .

Quite right. Even before the price changes were announced I had been noticing a significant drop in business over the summer. I was already thinking about consolidating land and abandoning a few sims.

What will cause the most damage is resident attrition.

The more people quit the less economy there is.

The less economy there is the less businesses will stay active.

The less businesses there are the less tier is paid to land barons.

The less holdings by land barons and residents the less tier paid to LL.

This can snowball into utter destruction of Secondlife.

And the death spiral won't last very long either.
Secondlife doesn't have enough altitude yet for a solid chance of the chutes opening on bailout.

Quote:

A third part is how many of these losses are actually down to the current financial climate and nothing to do with the proposed changes....

My reply:

The best guess I have is based on the trend in island count before Oct 27th. Islands were still being added until then, though at a slower rate than in prior months. How much of the slowdown was due to outside economics, and how much was simply the market for openspaces was getting saturated, I have no idea.

If you fire a shotgun into a flock of 100 pigeons sitting on a fence, with a 10% chance of hitting any given bird, how many pigeons remain?

Answer: None.

Pigeons aren't stupid, and the ones that live get the hell out of there.

Bravo ..... Nail on head !

LL will spook everyone with one shot ..... If the policy goes ahead far more people will be hit by the aftershock !

/me can hear the gun being loaded and has allready taken flight !

LOL
This pigeon has survived the price blast, has left OS, and will not be landing on mainland.

Well, if we take LL at their word and believe they can't afford to run OS sims at $75 a month then until the price is changed every new sim represents an increased cost to LL and every cancelled sim represents a savings.

As for Desmond's analogy: Those pigeons or ones just like them will all be back in about 20 minutes anyway. So it is with SL, a few people will quit but they'll be replaced at some rate by brand new people who are willing to pay the new prices or take the other options (mainland, full prim estates) pretty soon. Growth may be slower due to the increased costs. Of course, SL isn't growing so much anyway so that could just mean faster negative growth.

Some pigeons know what the pointed gun means and fly off right away, even if the man with the shotgun relents and doesn't even fire - because since the man has the gun, he can come back any other day and shoot any other pigeon who are still sitting on that fence. This pigeon ain't doing any more fence sitting.

And with retention rates not really growing and the overall economic picture here at SL and outside in the real world, sadly i think you may well be right, bad news will travel a lot faster than any good news ever will and a lot of people posting here are underestimating the amount of pissed off people that just don't post or read here. Its a sad time for SL in so many ways, but thats just my opinion.

We dropped our ocean sim and have cut back spending and investing in game and will just keep the tier on the main sim until the next bombshell. I know we are not big spenders here probably about 6/700 USD a month in total but wont be spending that much now in game anymore and what we don't spend we will look at using that elsewhere. I wonder how many others are doing the same?

I have been thinking along these lines too Ann - a downward spiral, and this OS tier price increase may just be the catylist.

best post ........ you get a doughnut.

Surely if LL can't afford to run OS sims at $75 a month, then they also can't afford to run the full estates at $299 or the grandfathered estates at $199 ... or the mainland sims at $199?

If this is so, SL is in a far worse situation than we realise and nobody would be safe owning land.

I rather object to the implication that those of us who own Open Sims are cheap. Yes it is true that I cannot afford to spend $1,000 upfront and $295 a month for a full island sim.

But I did spend $155 to acquire my land and I do pay $95 a month to keep it. Why should I be considered a second class citizen just because I'm not a "land baron?" And why should I be compelled to buy mainland property and suffer the various indignities of enormous lag, griefers and waking up each day in the knowledge that someone may have opened a sex club next door with gigantic flashing porno pictures right outside my windows?

Is the point of SL really nothing more than being a landlord? Or a serf?

Think about all the artists who have created wonderful works of art on open sims because the land could be acquired inexpensively (think AM Radio's work and on and on). Think about all the people who live here JUST BECAUSE of open space sims (like me, who got tired of paying $20 US every month for a lousy 200 prims when I could get 20 times the prims for 5 times the money).

We are not cheap, we're just not rich. And yes, I do think that having thousands of dollars to throw around on a game makes you pretty rich. Open space sims means that we can live and enjoy our second lives without the constant pressure to earn L$80,000 a month in rents. Open space sims mean we can do things with our land OTHER than open yet another shopping mall or whore house.

I think Linden is making a choice here. They are saying that SL is ONLY about the malls and whore houses and they really don't give a damn about people having genuine fulfilling Second Lives outside of the milieu of commerce.

If I were Linden, I would establish an entire series of island price points: $50 a month for 1,875 prims, $75 a month for 3,750, $125 for 7,500 and $250 for a full island. Ultimately there is no real reason NOT to make all land an island if people want to. It's not like the land grid is anything other than totally virtual. You're not selling real land. It can go wherever you WANT it to go, it can be surrounded by water or not AS YOU CHOOSE. What's the whole fetish for mainland anyway? Are you really telling us the entirety of SL land sales is predicated on making a pretty MAP? Screw the map. Since you can't fly across non-assigned sims anyway who cares whether there are two tiles of 7,000 tiles between any two locations? Everything is just a teleport away anyway. Are you saying that with all the programming and conceptual power behind Linden Labs a MAP is keeping you from serving your customers well?

http://www.sluniverse.com/php/vb/business-land-economy/8523-new-second-life-sims-past-9.html

Very good thread over at SLUniverse which started at the end of March. The guy doing the work notes this week

"This is the first week since I've been surveying where the Main Gird has shrunk in size. There are now 26523 private estates and 5092 Linden regions for a total of 31615 sims."

Now there could be various reasons for this, some sim owners may be forming their openspaces back into one full size sim and the loss of land is slight, but I don't think it's the RL economic factor that has caused this.

I have been waiting ofr the grandfathering of older PIs to end for quite some time. It's coming bet on it.

As for mainland. It is not 195 per sim since many many people own far less than a full sim and actually pay a higher rate per prim than that.

example
there are roughly 65 1024m plots on one sim (yeah I know this isnt exact). Allowing for the 512 you get with premium. You pay 5$ US per month for that 1024. 65 x 5 = 325 US$

That is why LL hasnt messed with mainland. The second reason is mainland does not have the "value added estate tools".

Even so I figure mainland tier will change. quite possibly coupled with an ending of the premium account.

I have not read the entire thread, so pardon me if I echo what's been said.

These totals also do not take into consideration the potential loss of full sim islands. I am still crunching numbers and need to talk to my membership, but the new policy will necessitate a 50% reduction in my airspace. Airspace is an integral part of our plan and without it we'll be forced to stuff too much into too small an area and our other activities will not function correctly. The other activities, even though they are very occasional, are the reason for our project. Without the airspace or the ability to have those activities, even if only occasionally, there is no reason to keep ANY of our sims - OS or full.

If I have to liquidate the OS and reduce my airspace by half I MAY drop my total holdings from 9 sims to 1 so that I have nothing more than a presence here that tells people how to find us somewhere else and to sell my product - OS or full is immaterial to me in that equation. We need airspace to make our plan work. I may just keep one full sim for that presence and to return here for our high resource eating, occasional activities - and move the rest of the operations off world.

It doesn't matter how you slice it, OS or FS, 1 is a significant difference than 9. And I have spoken to many others who are doing the same or expect to.

you best not be using moving pidgeons!!!..thats script - get yourself one of those sweet flat one sided ones and no using guns either - the script load could cripple our OS..apparently - *handing you an elastic..non scripted too..of course*

Another 111 sims lost in the last two days.