The L$ is Sick

Rental does not effect the L$ value: people have to buy L$ first to pay rent, then it is only sold back.

What makes L$ go up and down in the long run is the L$ supplies (where new L$ are created) and the L$ sinks (where L$ leave the economy). Those are controlled by Linden Lab.

What leads to short term fluctuations is hording and speculation or wrong pricing decisions by big players such as IGE.

Linden Lab may have to increase the money sinks a little and kill more L$ to keep things stable. They can e.g. do this by selling more land at auction for L$ instead of US$.

Who has been dumping those huge sums on GOM lately? there have been some 270K lots and 400K lots of LL on GOM. Someone is profit taking! LOL

You seem to believe they won't lower the rate more... this could be your downfall, grasshopper.

Correct. But renting requires far less L$ than buying. Therefore, less demand for L$ on the exchange market.

Ok Sensei of 3 months.

I have been watching these trends since L$ were first traded outside SL. I simply don't run to the forums everytime there is a fluctuation in hopes of making myself look like Greenspan or in hopes of influencing people's economic decisions.

And "downfall"? I treat SL for what its is, a little extra money in the bank for me, plus it pays my tier. This ain't gonna make or break me.

I'm not trying to be a greenspan or anything... I'm just trying to save people some L$ so they dont buy high and sell low :-/

um um um um um - renting requires MORE Lindens than buying. People can buy and pay tier with dollars. People can only rent (and "buy" and "pay tier" to landlords) with Lindens.

Am I not correct?

coco

IMO Second Life is approaching the point where LL attempts at regulating the value of the L$ will have less and less effect.

There are just too many disconnects between marketing SL and the inWorld experience of SL - along with increased complexity - things like perceived and actual hostility on forums and inWorld, service interruptions, a management style that can be at times unorganized, etc.

All of which is pretty normal - ya just can't control and micromanage this many variables and have a truly organic, evolving, living World of Second Life.

No..Renting is usually cheaper overall. Land Tier costs are in real US$ and the land tiers rise in cost VERY steeply. Renting is usually in L$ and can often times be covered by your stripend.

on may 15th there were 28,471 residents
today may 20th there are 30,043 residents
1572 in 5 days. 5.5% growth from the previous number...
i think their monthly target is 20%?

for a company that doesn't have a press marketing campaign, that's rather impressive.

Sorry if I came across harsh. I was mildly disturbed by being called 'grasshopper'. It is a bit demeaning though now I am not sure you meant it that way. I also think stating that the L$ is "sick" is a bit of an over reaction, as with "downfall". Just my opinion, your mileage obviously varies.

It's just that these fluctuations occur in any market, and are to be expected.

Generally, I don't get involved in these economic conversations because I think people try to apply RL economics a little bit too much to SL economics. There are some vast differences.

Sorry if I came across harsh. I was mildly disturbed by being called 'grasshopper'. It is a bit demeaning though now I am not sure you meant it that way. I also think stating that the L$ is "sick" is a bit of an over reaction, as with "downfall". Just my opinion, your mileage obviously varies.

It's just that these fluctuations occur in any market, and are to be expected.

Generally, I don't get involved in these economic conversations because I think people try to apply RL economics a little bit too much to SL economics. There are some vast differences.

Sorry if I came across harsh. I was mildly disturbed by being called 'grasshopper'. It is a bit demeaning though now I am not sure you meant it that way. I also think stating that the L$ is "sick" is a bit of an over reaction, as with "downfall". Just my opinion, your mileage obviously varies.

It's just that these fluctuations occur in any market, and are to be expected.

Generally, I don't get involved in these economic conversations because I think people try to apply RL economics a little bit too much to SL economics. There are some vast differences.

There is hardly a "freefall" when all that has happened is that after a huge surge to $4.25 -- not characteristic -- the GOM floated gracefully back to $4.00 where it hovers now in recent weeks -- sometimes at $4.02, today at $3.98 which is absolutely normal because remember -- on Tuesdays, everyone gets their paypackets. Quite a few people, instead of going out shopping, go to the GOM to cash out and get their accounts at least partly paid for.

I agree that the biggest single factor right now is game performance. I suddenly have dozens of people IM'ing me now asking to sell their land to me, sometimes for rock-bottom prices, because people find they aren't holding something they feel has value. They are afraid of getting stuck. They can't log in to enjoy their land. They had just too many unanswered letters to support@. I can't overemphasize what a huge, huge factor it is. I see it echo and echo for weeks and weeks every time Lindens have a "lost weekend" like this. I know 3 days of no log ins will cost us weeks and weeks of tenants leaving, being unable to log in, or justify paying rent. It takes a long, long time to recover. Then when you do -- horrors, it's time for the next game patch!

Therefore I wish the Lindens would look at this horribly pragmatically, and sit down, calculate that each game patch they create will consciously harm the economy and cause players not to log-on and have problems, and consciously rectify that problem as Anshe noted with sinks and withdrawals or flushing of LL accordingly.

Indeed, consciously or not, they are doing that by putting a lot of parcels on the auction for Linden valuation not US dollar amounts.

They might consider a nice $1000 bonus to every single player for their poor game performance, putting the compensation this time in Lindens instead of dollars as they did with the last "lost weekend" so people have incentive to spend within the SL economy.

When the GOM is low, it's a good time to buy, and no, you won't lose money if you buy and then put it into real estate. Seems reasonable to me. Of course, you have to have a balance of sales and rentals in order not to get stuck with loads of tier on devalued land you can't sell. That's always the risk.

People rent more when they can't buy, but only at a certain level. These game borks make the bottom part of the rentals market, the 512 and 1024, just give up sometimes. This is just my anecdotal experience. I think SL also moves in cycles. I see some people just disappearing because college is over for the semester, or they are getting married in June, or they are pregant and about to deliver, or whatever. The annual spring cycle of Real Life takes its toll on Second Life LOL. Watch for the log-ins to pick up again if Memorial Day or July 4 weekends are rainy LOL.

Precisely.

Maybe to *your* landlord but some levels of our rentals are less than what you'd pay to LL in tier. We have to do that because many people are reluctant to pay more rent than their stipends per week.

Coco, if you say "yay" about the GOM falling, then you'll be saying "Yay" about your landlords' project failing, because if this is not a normal economy, where people have the profit motive to play in it, they can't justify playing unless they are nutty philanthropists or utopian idealists with nutty philanthropists or rich uncles funding them somewhere.

So it's worth thinking through the consequences of a concept like "oh, let's applaud the fall of the GOM rate and let it bottom out so that money is no longer a motivation in SL."

I do think there is a place for your dream (and the dream of many) of a more TSO-like SL, that operates in a more artificial hothouse like a game rather than a metaverse. And that dream could find a home within a better-functioning metaverse.

When money is no long a motive, we'll go back to the free-for-all on the main grid with griefing and ugly builds and lag the norm rather than the exception.

Yes, not bad... but in that same time frame the L$ fell.... does not that seem weird to you? I'd think it would rise as more players come in and want to purchase things - thereby driving demand for the L$ up...

no. the market flucuates.

I guess, but now there are 20% more users in SL, but the L$ is worth 11% less over the same time period.

Just seems odd to me.

huh?
11% would be around a $.44 change.
that hasn't happened.

also i think ll tries to keep the exchange rate around $1:l$250

it's near there.

oh yeah, the $4.20+ prices were the aberation.
being near $4.00 is normal

" bonus to every single player "

I like the way you put this, Henry.

And yeah, I sure don't want my landlords to suffer or go out of business. OK so I take that back. (But having real money mixed up with things really isn't good for the fun aspects of the game.)

And I do think that I get a better deal in terms of renting/whatever you want to call it as part of a group than I would get buying the same amount of land by myself, which is one reason I am renting or some variation thereof.

But what I meant was - if I bought my own land, from Lindens, and paid tier on it, I would pay them in real dollars.

When I rent, I have to come up with Lindens. Which means I either make them myself (as I have so far), or I buy them from GOM.

So - buy from Lindens = no GOM activity in terms of buying Lindens

Rent = more GOM activity in terms of buying Lindens

Am I not correct about that?

The more renters like me, the more money gets bought from GOM.

coco

I don't know if $4.00 is actually "normal" or if it is "desirable" without hearing someone's analysis of it over this whole period, tying its rate falls to game patche dates.



Well, just just got here. Philip said 3000 came in the last month. That's a big adjustment. I would give them time to settle in for 30-60-90 days and see if they spend more money.

evidently, ll has a standford economist to advise them.