New "Bulk Sales Land" at the Auctions. Anyone cares?

I don't know if anyone has checked the auctions page lately but without much fanfare from the Lindens side the bulk sales land auctions seems to have been revived (link)).

It is a lot different from the first phase of the experiment in January:

1. The two packages on the block only contain 5 sims each.
   
2. Those 5 sims are pre-terraformed and can no be changed much by the new owner

I am asking myself currently what might be the (business) sense of these packages. The sims put on the block in this form are of the unspectacular variety (flat, green, mature) which fetched 1,000$ to 1,050$ at the auctions lately. The demand for this kind of land is not exactly soaring as the market has been literally flooded with it in the last three weeks. Buying them in a 5pack does not seem a huge advantage to me. Winning bids will not be higher (actually lower) then auctioning them seperately and terraforming is done by the Linden Lab team (no cost advantage for LL either).

The only advantage might be a chance to make sure that you get a large connected area if you are planning to do some really big (rental?) project on the mainland. But for a typical rental project the land offered here seems to be a bit ... plain

What is most disappointing to me, though, is the fact, that terraforming is limited and the opportunity to "create mainland" for residents is gone.

What is your opinon? Is this an interesting offer in the market?

I may be willing to reconsider this statement in light of new facts which weren't available today or weren't presented here. Several economic variables changing may cause me to reconsider as well. However, as presented, and as things stand today, bulk auctions in this format are of absolutely no use or interest to Cyberland.

To be totally honest, I don't think Linden Lab could pay US to take these perticular bulk auction sims off their hands today, unless tiering incentives were also offered. There is simply too much land on the mainland market today. I feel that its mid-term value is suspect, and unless something gives soon, auction buyers may end up holding a very large bag.

Noone will bid. At least not me. 65K mature sims are selling bad atm, why buy 5 of them at once?
I think LL is not watching the land market maybe even Secondlife closely. Previous bulk sales were even more meaningfull. At least we could have right to terraform, retexture them.
Now current bulk sims wont sell. I REALLY WONDER who is deciding these auction strategies(no offense).

LL has absolutely no reason to watch or care about the land market. Their goal is, as it should be, to get AS MANY SIMS into the hands of TIER PAYING CUSTOMERS (us... land traders, land barons, whatever) as they can AS QUICKLY AS POSSIBLE. Their job is simply to produce revenue, and they're doing it well!

On the other side of the coin, it is OUR job to watch and care about the land market, and to take on new supply based on demand. As a group (class, industry, whatever), we do a pretty sad job of accomplishing this. Frankly I don't fault LL at all for doing their jobs. I just can't, in good concience, buy their sims, given current market dynamics.

Residents should maybe look into forming a regulatory group for land auction initiation. I don't think it would be possible to get all concerned parties to play ball, but it may be something worth considering.

Yes, and they should ask this question to themselves:
"how can we sell more sims at the moment"
answer is definitely not putting 5 ALREADY TERRAFORMED&TEXTURED sims bulk auctions up.

This is simply impossible atm. maybe was possible 6 months ago with only 4-5 land barons. Over 20 active barons it is simply impossible.

They're just experimenting with new angles to sell more sims. The last bulk auction sims did well sales-wise, but the terrain was problematic, at least the area that Cyberland selected. The direction they've gone (uniform size, pre-baked terrain) indicates to me that they probably just want to see if they can keep up the same sales levels without the ugly inconsistances that result from these problematic situations.

It might even work! All that I was saying above is that I don't see -Cyberland- buying them, as long as things continue to remain as they do today. I can't speak for everyone, though.

Second Life is a constantly changing atmosphere. Perhaps one of the other land traders will buy them, or perhaps LL will even tweak a variable that causes it to make sense for us to take another look. If nothing else, I know a perticular trader that I'd speculate would almost CERTAINLY buy them as soon as it makes sense inventory-wise.



I wouldn't go as far as "impossible", but I would definately put it in the "highly improbable" category. Through my experience with Metaverse Stock Exchange and Cyberland, I can definately attest to the fact that self regulation is not easy, even with relatively few concerned parties involved. It takes hard work and a certain degree of sacrifice. I'm not sure if that could be attained in the land market.

It's also important to note that MANY of those "over 20" active barons will fail. More will decide to leave the land market for other reasons. Barons come and go so often that I don't understand why the derragatory slang term of preference is "baron". I could think of some that make more sense.

Certainly true. Still Kazanture might be correct in his assessment of the situation. Even if - especially if - the smaller players in the land market are coming and going their willingness to cooperate will be very low.

Linden Labs focus on making money as the main feature in the marketing of Second Life has attracted a certain clientele of egomaniacs which operate under the assumption that an investment of a few thousand real US dollars in SL will make them clever and successful businessmen in an instant. Young guys "playing tycoon" are rarely willing to compromise. And no cooperation without compromise.Aggreed. I am hoping for that "tweaking". What I loved most with the first bulk sales experiment was the terraforming. It gave land developers a chance to really compete creativity-wise on the mainland market - with mixed results. That trader is already filling up inventory at prices between 1,000$ and 1,050 per sim. No huge advantage of a 5pack here.

"....become a land speculator..."
http://secondlife.com/whatis/businesses.php

are we "land speculators"

This is certainly a better term than "baron", which sounds preposterous when you use it for yourself. I am not sure if it describes the business better, though.

True "speculation" with land is nearly impossible in SL. Speculators usually buy and hold under the assumption that certain land will rise in price. That is a business tactic that is utterly doomed in SL because land nearly never rises in price and tier kills you long before that happens. (The proverbial land baron of SL tried it with the move on the waterfront market. Currently I don't get the impression that it works out that well.)

I would prefer "land developer". And I would love to do more developing if only the tools available would make it more efficient. Community and rental projects are not a very scaleable business model in the current world of SL. Yea, and I would like to start development earlier. Did I mention that I love terraforming from the ground up? I guess, I did.

This is true. Profoky was told once that there's always somebody else to buy the land. LL couldn't care less how much land is for sale as long as it's being covered by residential tier, They only have to worry when they see public land sitting on the map unclaimed.

Come to think of it, there is no more public land; so they only have to worry when the Governor's holdings start increasing due to lagging auction participation. Is that happening now?

There are many, many ways to speculate in real estate. I think that one of the biggest issues with SL's real estate model is that it's just too simple. The rest of this post, I agree with. Perticularly the developer part. I would love to go way beyond even teraforming, but the economic realities make this an impossible dream, for now.

I can't see why this would ever happen unless SL collapsed altogether. People have to look out for their investments, afterall. Why give your land away if you can find a buyer?

edit: It IS true that there is always SOMEONE to buy your land. If all else fails, and you're in need of a quick sale, there's ALWAYS a land baro.. err.. speculator.. willing to pay you a fair wholesale price for it.

Well that's certainly a bit more polite than "Baron". I don't really feel like a baron, lol. I think that I would perfer "land investor" or "land trader" over "land speculator", though.

That's what I mean by worry. If LL notics that the Governor's holdings are increasing due to abandoned land that nobody is claiming in auction, it'll no longer be true that "somebody" will buy the land. That's not such a bad sign if people are still purchasing new sims regularly as the old lands can be consolidated and resold as "new." But when the new sim auctions also start to fold, SL will either be collapsing or becoming dependent on the private estate market.

It'll be apparent to LL long before it is to us though.

I agree with you totally. If there is ever a situation in which there is nobody to buy the land, there will be much larger problems to worry about.

After the last bulk sim auctions it did occur to me that Linden could forget the up front real US dollar cost on new sims and just be content with the US dollar rental.

After all highly priced land is a consistent moan for many people....Linden may gamble it can do without the Land Barons in exchange for much more rapid expansion in dollar rental income.

(Shiver of horror down spines of land barons) (Me thinking outside the box -

I agree with the land barons here.

1. I don't understand why their previous bulk auctions weren't islands. They set up dozens of void sims to separate the auction land from the mainland, why not separate them from each other?

2. 5 sims were a really weird number, and still are. 4, 6, or 9 make for a more workable land area.

3. "flat sucks".

I'm glad it's not just me who's been looking at the auction page and thinking "do they really need to sell all this land? nobody seems very interested, and what, now, five at once?"

The "high price" of land is one of the myths that seems to be very hard to uproot. As someone obviously used to using a calculator you can easily deduct that over the course of some time (say: a year) the biggest chunk of the costs connected with owning land is tier.

Owning 4096 sqm will cost you 300$ in tier over the course of one year. That's a whopping 90,000 L$ and more than double of the price of the most exquisite waterfront parcel of 4096 sqm!

Yes, tier is more important for the Linden bottom line than land sales or subscriptions for premium accounts.

Still, it does not make much sense for the Lindens to give out land for free. A server sold at the auctions means earnings of between 1,000$ and 2,000$ now! In addition tier payments for that land start immediately. It does not matter if the lucky winner of the auction can sell it or not!

Killing those earnings would be a huge blow to the Linden cash flow.

Barons? What makes a land baron?


Hey, may not seem like much, but if you are a dirt broke Basic Member, a mere 15 prims might seem like a lot, and $L 40 a week to be a crushing payment.

And your buddy renting you part of his First Land might seem pretty tyrannical...

I don't see any barons here. How about you, Shaun?







People are simply not being creative enough!


Uses of five flat sims in a row:

- Biggest virtual subway sandwich ever created

- Noob racing (hop on piggy back!) and the associated gambling pit

- Avatar Accelerator Rail Gun: 75,000 prims @ max push launches you to TSO.

- Velvet roped waiting line, for the run on one of the 'bank' ponzi schemes

- A decent view in just one direction


That took me one minute of thinking. Just think what a creative person could do!

I believe that Baronies are inherited or can be assigned by the Monarch, but I'm really not sure about the relationship between Baronies and Dukedoms or Principalities. I would say that anyone owning more than one sim's worth of land is at least a Land Baronet, and anyone considering bidding on a bulk auction is a Baron. Anshe, of course, is at least a Land Duchess.

I challange you to sell slope land ATM for more than $L4.0 a meter.

Now about the land issue, I've noted a general crash on the lower end of the market. I have been able to pick up every thing from snow, to green, for less than $L4 a meter...Considering full sims cost $L5.5 a meter, and there are 1,000's of land lots for less than $L5 a meter one wonders how soon befor a major upper end crash happens, and the "barrons" start leaving.

Bulk land auctions like this, in my opinion, simply saturate an allready flooded market.

*puffs his chest out, and trys to look important*

Happy Acres Land Sales won't evan considering buying sims at this time, unless their is good insentave.

I've got a better idea. Why don't you show me where I could find some to buy that's (a) attractive, and (b) in small enough parcels that I can actually afford it. The very first land I wanted to buy in SL was some marvelous slope land in the north of Arches... but the smallest parcel was 8192 and priced at over L$8/square meter!

I gave up on the whole idea and rented a smaller chunk on an island... for no more than tier! That's the real reason people aren't buying... renting is just more cost-effective.

The land I did eventually buy is on a slope, albeit a gentler one than I prefer... and it's in a normal mainland sim so I can't do much to terraform it, but I did work where I could to make the edges look nice where the developer of the next sim uphill had flattened it.

My current project is slope land, too, in a sim where just about everyone but the developer has flattened their parcels and covered them with plywood boxes. But that's back on an island again...

Now, thats an easy one. What do I win?

Just a joke. This bet would be a little unfair, because here at THE OTHERLAND GROUP we specialize in extraordinary land, which rarely is non-sloped. We sold most of the Emerald Mountains up in the North (very steeply sloped land) and some very interesting waterfront terrain (sloped) on the Northern and Souteastern Continent. None of that went below 7.5 L$ per sqm.

It is true that the biggest slice of the market is "flat green mature". Of course, we have a few 100,000 sqm of that in our inventory, too. Most people want land that is easy to build on. And most people are not skilled to build something on a steep mountainside or on a high cliff above the sea. I don't blame them. This takes some talent and not everone is an architect. Most prefabs don't fit well on steeply sloped land. But, like in RL, the most impressive architecture is usually not build on "flat green mature" and this kind of land certainly is not the most expensive.

The lower end of the market crashed because the Lindens are literally flooding the market with "flat green mature" for reasons untold and because some of the little barons tried a strategy of sell-quick-before-tier-hits-me. This is stupid of course because it is nothing else than a price war and its never the little guy who wins a price war. But I guess these are old lessons from RL that some still need to relearn in SL. Full sims currently go for 4.8L$ a meter. And I don't know of larger areas currently sold below 6L$ per sqm - which makes sense because you have to add tier to the procurement costs.Sadly true, but I guess this is happening because no one at LL seems to be watching the land market. I fear the only parameters they check at LL are: the number of sims (and sum of their prices) that went over the auction block and the average price of land in SL.

Disclaimer: I am talking about fresh land in new, now lag sims when stating the above mentioned prices of course. You certainly have to set prices lower for used land in laggier, crowded sims.

Dana, my first life business is based on both immediate and ongoing cash flow, in other words a passive income stream. In the beginning it is clearly obvious that cash up front is better than ongoing income because it takes time for the ongoing income stream to equal the up front cash.

But over a longer term basis reoccurring income is better than up front cash because when you wake up on January 1st you can predict how much income you are likely to receive over the course of a year, taking into account such data as persistency and ongoing growth.

Clearly any transition from one business model to another needs to be managed. I do not have data from Linden to validate such a proposition but I do know that in almost any business structure I look at, income stream is as important as Net Asset Value (NAV).

Here in Second Life NAV is either rare or non-existent. The cost of each new sim could be expressed as the cost of the server plus perhaps an overhead shared by all sim servers to pay for such things as physical ground rent and wages. I do not think that servers cost a great deal of money, computers always get more powerful and cost comes down (part of Moores Law)

As you rightly say the ongoing rent is more important to Linden than the upfront cost longer term, therefore the $1,000 lost on upfront cash would be covered by around 5 months rent. A rental agreement between two parties for say 1 year could therefore be attractive to both parties assuming no up front cost.

Finally I think that many people here would perhaps "own" more land if the only cost was tier. Just a personal view of course.

PS, in the UK it is a fact of life that if you invest in the stock market longer term, received and re-invested dividends can account for much of the longer-term capital appreciation of asset-backed investments

PPS, Do you know what a Boston Sales Graph is?

Useful rough and ready caculator to assess a business or sales.....you know a big square divided into 4 smaller squares, they are called "Start Up" "Problem Child" "Star" and "Cash Cow. You can only go around clockwise so to remain in either "Star" or "Cash Cow" you need to consistently develop new ideas. Perhaps Linden is moving out of "Problem Child". Just a thought.