SL paying the bills?

SecondLife is a lot like real life .. it's just a game.

Strike two, blaze. If you have a good argument, please bring it. Post like that again, and it's getting abuse reported.

And it takes far more than this to get me angry.

Jeffrey, you jumped into a conversation that had nothing to do with you. I was replying to the original poster.

Take a look at it again. You replied to a post that really was simply my thoughts on what the original poster said. It wasn't directed at you or anywhere near you, except oddly enough you replied to it like it was! Very strange.

But, hey, I don't mind. I like to discuss my ideas with anybody. And it's ok if you don't like my opinions, I don't mind. If you don't want to hear them though, I really suggest you don't engage me in a discussion.

I'm the same - I often say that if the L$ were abolished tomorrow, I'd still continue making things and enjoying myself.

The fact that SL *does* pay for itself, and my cable bill is more like a bonus - a nifty side effect to doing things that I enjoy.

On the other hand though, I did start playing before there were outlets like GOM - the shift for making money was to pay land/prim/light/height taxes - to rez prims, to teleport from A to B.

This was the covenant when I joined - since then it's changed. The L$ is now something you can trade for real money.. It's not a bad thing, but it does open up a market of people who are joining because you can do this - it's not a bad thing, it's just a different motivation than when I joined (you can build and script stuff).

There will be people who's fun solely revolves around how many US$ they can generate - it's not why I play, but whatever floats your boat so long as it doesn't harm others.

Siggy.

Jeffrey, you'll also notice that I didn't call you naive or that your tone wasn't particularly civil.

I didn't stray from the ideas and concepts at all.

If you think I was engaging at ad hominem at any point, please let me know and I will clarify it. I really didn't mean to.

In fact, at no point when I was posting was I thinking about you at all. I was only thinking about the idea that being self employed is more honest and better than being employed.

Sometimes I use the royal version of the word "you" which is very dangerous because people incorrectly infer that they are being refered to, when I'm really talking about the group sense of the term.

Tut, tut. No squabbling please. I don't see anything in Blazes point aimed personally at you Jeffrey. Are you old enemies or something, that you take it so?

His post about honesty does appear somewhat bizarre at first sight, but as someone very definitely not virgin in this respect, I at least do understand what he is talking about. Perhaps "honesty" is not quite the best word, and I don't have time to analyse for you what I think he meant - but talk about AR's really doesn't seem appropriate from either side.

He was posting a valid view, though with a slightly subtle meaning for "honesty". Not quite just the ordinary opposite of "dishonesty". More as in "an honest piece of workmanship". No. Its not quite that either. Sorry, I can't quite explain it, like he said.

it's possible, as some people seem to be doing it. however, can 10% of the population of sl? i don' think so yet. i don' think even 1% is doing it yet. but i don' t have hard numbers.even it can't be done yet, i think ll will be around for a while. i expect some pizza/food delivery system for first life in sl real soon now. especially with the built-in webbrowser coming.modeling - jeffery gomez's answer is good.

texturing - i've thought of a couple answers to this... but mostly they are backwards, if you know how to do graphics, you can do sl texturing. i think, if you become proficient at making textures in sl, you learn alot of the skills you need for doing graphics - but graphics in the category of "anyone can take pictures, not everyone can make money as a photographer" type skills.

scripting - if you know how to script/program already, you can do lsl, but lsl doesn't follow some (many ?) of the major modern programming paradigms. it'll teach you basics of variables and functions. and it will teach you how to consider one method of coding over another, but it won't teach you things like big-o notation and why that signifies, object oriented programming, encapsulation, etc... and it may even teach you some bad habits wrt threading.my confidence is low. i think ll will eventually switch over to first life currency. it has to if it wants to be the 3d webplatform. either that or someone will figure out the micro-payment (transactions in the $.01-4.99 range) problem for the web, and since sl will be web enabled... and i'm sure some sl business would use that system.

Let's rewind and look where the problem began again....




My problem is not with attacks on my person - it is with retaining a civil tone. I will admit that "don't go on another crusade" is nearly crossing the line. This is why I go on to defer that statement with an argument on ideas.

This is irrelevant, and I will refrain from an abuse report. Please tone down conversation and I'll be more than happy to do the same.

Back to topic.

Don't bother Ellie. Some of them get so wrapped up in themselves they forget that others exist.

Heh. Continue discussion. I'm trying to get back to topic, if anything.

What do you think on the original topic, Susie/Ellie?

Uhh, I'm sorry .. nowhere in the TOS does it say we have be civil towards concepts! Just people.

Jeffrey, you are a great and very talented guy, and I have a lot of respect and admiration for you.

I still think being employed in a company is for losers, though.

Hope you can deal with that.

That's perfectly fine, blaze. I don't have a problem with an opinion.

Thank you.

On being self-employed, I actually tend to agree. I dislike the bent of capitalism toward "exploiting" workers, and happen to be a bit of an entrepreneur myself.

In reality, I'm actually pursuing a dual business/computing degree for this reason. This is my senior year.

The entrepreneurs of Second Life all have my respect for their volition. However, I'm a little troubled that they may "recreate" the same exploitation that exists in the real world. Already we see a lot of this with the rise of commercialism in Second Life.

How far will that progress? I'll leave that to you folks to answer.

I personally see a fairly steady income from SL, though it is more supplemental rather than primary. I have been able to consistantly get about 120+ per month from my vendors around SL, though that gets spike to as much as 300+ in months that I do updates to my primary product line.

Generally the best way to make an economic gain in SL on a consistant basis is to:

1) Don't let your product fall behind the compitition. Continually ask what it is that customers want and GIVE THEM THAT with future updates

2) Find a niche. If you can make something before anyone else thinks of it, then you will be much more able to hold onto that niche.

3) While most economies work on Supply and Demand when player-based the SL economy does not. SL works on pure demand. Most prices in SL that I have seen on novel or low competition goods (like avatars) start out with arbitrary prices. If you break into a market, set your price lower than the compition and keep lowering it until the increase in sales no longer justifies a decrease in per unit profits (you make more selling 20 at 5 dollars than 3 at 20 dollars, but you make the most selling 11 at 11 dollars. mo).

4) Just because you made one thing doesn't mean you can't also make another for the same or a different target market. go for it.

I disagree with this.

If you keep *increasing* it, you will do well. If you set low and keep decreasing it you will rapidly move towards the direction you are decreasing in general income -> 0.

The key is to build products that people want that other people are not. People, in general, will pretty much pay a lot for those products.

People are not looking necessarily for the lowest price deal, but rather the product that offers the most innovation and value.

Unless of course, you are offering something which is purely commodity. However, to my mind, I can not think of any commodity products in this game.

I built my successful RL company by adamantly pricing my products significantly higher than the competition. But backing that up with superb quality and rapid innovation.

When negotiating customers complained about the price, my people were instructed to inform them which of the competition had which advantages, and suggest they buy from them, if only to find out if ours really were better. We said (honestly) that we liked people buying the competition because we were confident they would have an inferior experience and return to us for repeat orders. Many bought from us, but of those that didn't most were back to us next year. If a major new competitor appeared, I would put my prices up, not down, and use the money to speed the next product. A sort of "Rolls-Royce" strategy. And the nice thing was, we told our customers what our strategy was, with total honesty. Intelligent customers hate BS, just like you and I.

Mind you, it was a special market where we were putting sophisticated microelectronics in very hostile environments, freezing, flooding, scorching, abandoned there maybe underwater for months at a time. Reliability was all, and only we really delivered it.

It worked amazingly well. Though it would have failed if our claims had been groundless.

Don't know if this has relevance to SL, except that successful pricing strategies are many and various.

Sorry - if anyone saw that, I just put up a post, then deleted it cos when I read it, it looked like bragging.

I'll just agree with Blaze that various and opposite pricing strategies can succeed. I'm all for the Rolls-Royce approach. Push your prices up, not down, but honor them with outstanding quality. My view comes from RL experience, not SL (yet).

1. anything is feasible, would take a tremendous amount of work tho. More than 8 hours a day every single day.

2. very high, SL is just getting started. I see SL around for the next 5 years. Not as it is of course. 5 years from now beta will only be a distant memory of what was.

3. not sure i fully understand the question.

4. stability- so so. supply and demand seems to be down as the linden has not hit an all time high in a while.

Cat

it is simple market mechanics... I don't see how I could have made it any clearer.

if you sell something at a lower price than someone else at similar quality, you will probably sell more. the increase in sales can oftentimes offset the decrease in price based on the shape of the demand curve. This is basic economics 101. The problem with setting a lower price in the real world isn't making less profit, it's selling more than the supply can handle. if you lower the price, you increase the demand.

If I sell furry attachments at 300 and have established the mainline price at 300 and sell 3 per day. If I drop my price to 250 then people will flock to my product if all other things are equal in comparison to the other products. It's only a loss of 150 per every 3 sold, and if I sell even 1 more per day than I did at 300 I GAIN from lowering the price (1000 linden per day as opposed to 900, an increase of 100 linden).

In fact I am going to be testing this dynamic after my sales stabilize again so I can provide solid proof in the econ forum.

I am certain the U.S. government considers all real dollars earned from SL as taxable.

coco

They do. If you make over x amount of dollars from sources besides your regular job (including gifts) it's considered taxable income and must be declared. I'm not sure exactly what the value of x is, but it's small. Under $1000 I think.

Yes, these mechanics work with commodity products which are easily compared. For example, selling l$. You're always going to buy the cheapest L$ you know about.

However, products in world are not comparables. Each has their unique strenghts and weaknesses so the traditional rules of market mechanics do not apply.

Also, there is little cost of doing business.

The fact is, if you produce something and someone undercuts you and then you undercut them..

.. are you imagining they're just going to pack up and go home? Say .. "ok, I give up!" No. They will either improve their product (and therefore, sell more and make more than you) or do what you did do them and cut their price (in which case, sell more and make less).

In either case, your revenues will eventually be pushed down to zero. This is why I don't fear undercutting anymore from a business person. I do fear competition from a naive technical individual who thinks that lower prices is the way to compete, because all they're doing is ruining it for themselves and for me. A lose lose proposition.


BTW, if you are merely decreasing the price because people would buy more, competition or not, then yes.. absolutely. That is an excellent strategy.

However, I suggest you try increasing your price as well. You may find that you'll make a lot more that way.

Not always. Blaze is right. Not only can increasing the price increase the return, it can actually increase demand (ie the number sold). For certain particular sorts of products and environments.
Maybe these less usual situations aren't in Basic Economics 101, and you have to wait until Intermediate Economics 204?
This can apply, for instance, to premium, top of the range goods with a substantial reputation.

You can see it most clearly if management stupidity lets such a product range slip from its privileged position. If such a manager, thinking he will increase sales, drops the price towards his competitors level, he may put his product on a par with them in the customers mind, and discover to his horror that his sales have fallen drastically towards their levels. It may be impossible to recover.

On the other hand, if he finds his image (and sales) slipping for other reasons, he may succeed in reestablishing both with a price rise to increase differentiation.

Note that this need not be a confidence trick. The product may well be much better, and cost more to make. But if this is difficult to detect without owning one, and repeat business is not significant, price and reputation may be the best way of making it known.

I would guess all this might well apply, for instance, to the in-world Seburo gun. (have I spelt that right ?)

I went through 4 years of economics and every class taught you the same thing. Supply and Demand... increase demand and increase sales... there are various ways of increasing demand, including reducing your prices, but your best bet is to just make your product better. Market sizes in SL are small (currently), you can lower your prices and expect to see flocks of customers, but it probably won't happen. It is more sound to just constantly innovate and be associated with high quality products (see Cubey Terra, DNA Prototype, and Aimee Weber). Then people will be willing to pay more for what they think the Brand is worth. This also increases your chances of success in the long run. When we tip the 1 million user mark, how are they going to find your products in a sea of products? They won't but they will probably find you name. Basic internet marketing.

Not to mention I'm sure I'm not the only person who has purchased a dud product. I like to buy from names I trust or that friends have recommended to me.

The laws of supply and demand don't really apply very well to concepts, just material goods.

That's because there is generally infinite supply of an idea, not to mention the cost of goods are completely different for intellectual property than physical property.

Much of the laws of economics are based on the a very long history of business based on physical goods, and the nature of the knowledge based economy is still rapidly evolving.

This is a great point, which restates what Ellie was saying in a way. If you lower your price, you just devalue your brand. If you innovate instead, you keep your brand as valuable and innovative.

To say in another way - by lowering the price all you really are doing is lowering people's expectations of you, which means they're less willing to pay higher prices for your products.