Stipends and Economy

I think Linden Labs is about to embark on one of the grandest mistakes it can make, which some other online services of a similar ilk have.

Not everyone han afford montly fees for multiple platforms, just to have a stipend here. If it comes down to it, my monthly fees go to the MMPOG's that i play that have a much higher end development cost. I never understtod why a service like this thought 10 dollars a month was reasonable, when I pay 10 a month for fully feature games like Ascherons Call, or Worlds of Warcraft.

So have never been a montly paying member as just being able to own land, wasn't worth the cost in real money compared to the other games, instead being satified with a basic account and less stipend.

The reson land prices are falling, is because no one can afford them since the last stipend reduction. Or did that not occur to anyone? Totaly eliminating Stipend is for basic accounts if going to totaly ruin the land owners that rent land to basic account users, for now they will be unable to get any of that businnes as basic users will no longer have any income to speak of.

You are far too concerned with this fairy tale econmy, then you are for the real reasons you made SecondLife, wich was for people have a place to enjoy.

And how will all those basic acount users enjoy it without any income? They won't.

To give you a history lesson look at what happened to ActiveWorlds. At start it was $20 a year to be a full citizen there. Then they got greedy and up'd it to around 6.95 a month.

The Userbase of AW droped from almost 200,000 subscribers to 20,000 in a matter of months. Lets see, 200k at 20 a year was 4,000,000 anual income, 20,000 at 6.95 a month now comes to 1,668,000 a month. They were warned about this type of loss of income, didn;t belive it, and since then it's been taken over by other companies multiple times, as it no longer has a user base to make profits.

Sell -cheaply- to many.

The situation in SL and with L$ is just the opposite, it seems to be sell expensive to few, instead of cheaply to many. It hasn;t been working so far, and will contuninue to not work, as people will not pay 120 a year just to own a 512 meter plot here, or for a minimal stipend.

The loss of Sipends for basic users means that group is going to hoard thier remaining L for things they only really want badly, in effect, almost garunteeing that they will never be spent on a sink hole again.

If the basic account users find they cannot do as much here because of the loss income, basicilly means they will start trickling off the system. It will happen, it happened to AW and will happen here. As they trickle off the system so will thier buying thing in game.

Prices will fall even more, and as full account users stop making as much profit, they will begin to trickle off the system too.

So some sugestions:
1. Make it more desireable for people to pay to own land, $20.00 to $40.00 a year for a full acount is much more resonable to a far larger audiance then your current rates. Again sell cheaply to many is the key. Branch out so to speak, make it -inviting- to pay for a full account, instead of the "$120 a year for what exatly?" many of us say now. Full account users with the 500 stipend a week base will much more readily spend that L on things promoting the over all growth.

2. Bonus Stipends. Reducing them once didn't work, eliminating them for basic users completely will also not work. Learn from your own history. Instead leave them intact and let the economy settle down. What you have right now is prices sitting like they were before the redution in bonus', such that people are buying less in game. The land prices falling is a syptom of this, just indicating that people can;t afford the rents or land anymore. As people buy less, the prices eventually have to fall to ecourage people to buy. Removeing the bonus's will just compound this issue. Basic economics, the less money there is the less it's spent. If you chose to eliminate bonus's then replace them with -other- means for basic/non basic folk to earn lindens. But make it fun to do such and not onerous, this is after all a game of sorts, and people come here to enjoy. Think back on the clubbing days when 5,000 linden raffles were common, the linden was much stronger then then now. Why? because there was a good supply of lindens people spent them, causing them to gain value. Now with people hording them, they are losing value.

3. Stop focusing so much on the economy side of SL and focus more back on the enjoyment side. You'll attract far more many people to the service and that will be good for everyone. At this point I'd say it's time to call the L$ economy a bust with reguards to real money, and go back to the basics of this being a social hang out. It's OK to say "hey, the experiment didn't work with L$ holding real value." and moving on. Some of the mega land barons may not like that, but most of us have figured it out already. It was a nice attempt, but at this point I'd say you need to take a long look at it, and maybe change focus to something else.

Just my thoughts on the whole thing,

Darm Yaffle

The problem is, Darm, that the players of this game also provide the content. Much of the reason to own land is to have a place to provide content of one sort or another.

It is my belief that the primary reason land has gotten cheaper is becasue there's an increase in the sort of player who is not interested in creating content, and thus has little interest in owning land. So the usual formula for figuring out how much land is needed ends up producing too mcuh land. And scarcity controls price, so land gets cheaper.

What LL is probably hoping to encourage in part with this cut of bonuses (not the stipends, the stipends stay the same) beyond curtailing the decline of the L$ against the USD, is to get more basic, "consumer" players to purchase L$. Getting USD into the hands of the folks making content and thus, via land and other fees, into thier own hands.

The advantage to a system like this is: A "consumer" player can choose to pay X amout to play with this month, then not spend a single real-world dime the next. And even if you don't spend any real-world money, there's still plenty to do.

SL is pretty close to the perfect entertaiment value, IMHO, becasue it's entirely up to you how much your going to spend. Even the tiniest of stipends lets you play a great deal. The social aspect of this game has just exploded in the year I've been here. A good freind and I spend three hours messing around on the grid without spending a single L$, for instance.

Once LL gets thier own money exchange up, it will be far easier, too. No having to muck about on PayPal. Hopefully it will be cheap, too - with minimal fees (say just enough to cover using the credit card clearinghouse and pay for the bookeeping.) Plus, the L$ is cheap even at 4USD/1000L$ - a movie ticket's worth (14USD here) gets you 3500L$. At the current rate on GOM, a movie ticket gets you 4000L$. I'm under the impression people can play for a good week on that easily.

So the economics of SL are intergal, and nessesary. I think if you ride out the rough transition pariod that follows any economic adjustment, you'll see things get better on the other side.

I can see that taking away the ratings stipends will cause some more established players who run Money Trees to possibly stop doing so. Right now my Money Tree expenditure of automatic L$500 a week is taken care of by my resident stipend of $500 and by the additional ratings stipends every Tuesday,, but if they go also, that again will for many weaken the resolve of people to run Money Trees which go entirely to new people most of who get little or no income at first.

I shall continue mine, vut I am sure it will put some people off and maybe stop new people from joining the Money Tree scheme as owners. It just makes the idea tougher to support.

I know from comments I have had from new arrivals how useful they find these Trees.

I disagree with most of what you are saying, Darm, but in particular I take issue with the above quote. As I understand it the major component of the "bonus stipends" is the payment given out as a reward for positive rating points. This system was always a farce, nothing to do with assessing an avatar's real contribution to the game. Its one value was, arguably, to get people talking to each other. Since it became so expensive to do, the scratch-each-others-back-for-virtually-nothing-fest came to an end, and new players have had no opportunity to get on the gravy train.

The continuation of these payments has therefore been inequitable and unjustifiable for a long time. They should have been eliminated at a stroke when rating costs were upped.

To argue for their maintenance on the grounds of overall resident spending power is nearly as ludicrous (and for those profiting, as self-serving) as for a robber of the royal mint (uk currency manufacturer and destroyer) to claim he is doing a public service to all by preventing the destruction of money.

The rating-related payments are unfair, and that is why they must go. The question of the money supply is a different one. If you feel strongly about it, argue for the withdrawn rating money to be instead redistributed equally between all residents.

To argue for its retention "as is" seems to me indefensible.

I think the only rational people likely to disagree are those making money from it at the expense of others, and on the basis of things they did long ago, of dubious value, and which we are now prevented from doing. Pure self-interest.

If you are thinking more about the loss of "dwell" payments, that is a different matter. I have no idea if it is/was fair, in encouraging and rewarding what it was meant to do. As such I am unqualified to comment, and have to assume LL know what they are doing.

They might find it more useful, Snakekiss, to receive a fair share of these moneys, if they are to be paid out in the first place. See my post above on why ratings bonuses are totally unfair and should therefore be instantly eliminated. Generosity with funds one should not be receiving is no justification for receiving them. That is assuming it is the ratings bonus that we are discussing.

I have to agree with Ellie... Although it is very noble of you to be so
generous with the $L YOU receive from previous gotten high ratings,
I'm sure there are many other SL vets with high ratings that don't
share out their $L gains equally. Since it's impossible for the new
residents to amass ratings in the hundreds, then you are getting
a form of welfare that they can never hope to get... so, even though
I'm sure you mean well.... you are promoting the continuation of
an old system which unjustly favors you and your high ratings over
the newbie who has no hopes of getting to the same level.

If LL stops giving out that welfare of unfair rating bonuses, then
in what better ways could they use those $L ? I'm sure we can
think of some that would benifit us all.... and I'm sure LL is more
interested in what might benifit the WHOLE community (especially
those newbies) than just benifitting a few through unjust welfare.

Gabrielle

So, you DO pay $10/mo to other MMOs, just not SL, right?

I'm not sure why you're seeming to suggest that SL is not
as "full featured" as some others, but everyone has different
tastes, and so we are all going to gravitate to the game, world
or platform that we prefer.

If you enjoyed SL as more than WoW, and only had $10/mo to
spend, I'm sure you'd spend your $10 with SL rather than WoW.

I take it you are not a fan of owning land here... me either.
There is no need when you can rent land.... and get the same
abilities as owning for a fraction of the cost.

What would you think about about a type of SL account
which cost $10/mo... gave you no land, but instead gave
you a weekly stipends of about L$1,500 ? Would that make
it more enjoyable? Of course, if you DID want land, then
you could always rent a 512m2 plot of land (or more) for
about L$200/wk or less and still have tons of money left
over to send as you desire.

Would that make a difference?

Gabrielle

Gabrielle Assia:

Actually I spend more time on SL the WoW. What i'm saying is in most places you get what you pay for, but with SL. 10 a month for a minimal stipend and right to own land, does not make any sense. At all. If they lowered the rate to say $20 to $40 a year they would attract a slew of new people, get many of the basic users to full accounts, they could probably even grab the remaining die hards from AW. Sell cheaply to many.

For a point what does Chrystler make all it's money off of? the 'Prowler' which sells for $45,000.00 to start (2000 have been made and sold), or the common besties we see on the road every day that cost from 8-16 thousand (millions have been sold).

It isn't attractive to pay $120 a year just for the right to own land and for a stipend is all I'm saying.


Jillian Callahan:

Not everyone wants to create or build contend, instead we prefer to enjoy the social intreations. The thinking that this will encourage them to do so is wrong thinking. Most of us don't have the time for this sort of endevor. There is already serious talk on the game about leaving if SL eliminates the inclome of basic users and reduces it for full users.

So now LL is going to either try and force non builders to build, or drive them off the game due to the lack of funds to participate in the game.

You are looking at it from the point of view of a merchant I think, nothing wrong with it, but i've been talking to both basic and full acount user freinds and none of them are happy with this change.

Unhappy customers tend to leave games, not spend thier $L, etc...

The best thing that could happen to SL economy is to get an influx of more people into the game, not tinker with the existing systems and cause a loss of people.


The Ratings Bonus:

If it's determined that this is unfair, fine then replace it with something that is more fair is all i'm saying. Don't eliminate it, replace it. The people that come to game for enjoyment far outnumber the murchants and land baron's. If we are driven to other places because of a lack of abilty to function in SL economy, excatly who are the merchants and Land barons going to sell/rent to?


Ellie Edo:

I agree with the loss of dwell, that was a major blow to enconomy overall and has totaly stifled the flow of L$ in game. It did far more damage then the reduction of the bonus's.

The current situation with there being less buying in SL and thus the eventual reduction in prices now happening is a driect result of this.

As to the bonus stipend's, see above. Perhaps the current bonus system is totaly unfair. I'm all for replacing it then.

But not eliminating it.

If you eliminate a source of income, then your just forcing a case where people spend even less, and making worse the problem thats trying to be fixed. Doesn't make any sense.

You need to reread my message - I never suggested that the point was to encourage people to build.

And you need to try to see how it works from the content creation end too - this whole system needs to balance in order to function. If all the L$ comes from stipends and bonuses, the system fails to generate real-world cash flow. Then folks like me couldn't afford to hold land - and if that's true for the majority of the content makers in-world (and I suspect it is) then things go south for LL.

Again, I remind you that it's not LL who provides things to do in SL, it's the residents. LL is trying to encourage moew content creation by making it a way to make a little beer-n-skittles money, or at least having SL pay for itself. This means needing people to spend a few real-world dollars now and again to buy L$. Not even a matter of high expense, and definatly not a requisite for having fun in SL!

I pay much more then 120 a year to own land. Plus if all you want is a little 512 plot, why not just pay the 72USD and make it even cheaper for yourself? Also, I want to see the PROOF that if they lower the price they will get more players. I want to see all the market research you did to prove your point. I want to see the cost per user vs. fees per user. If you don't have this information, that I suggest you don't state it as fact. I bet you LL has done lots of market research on what to charge, and what the costs are. If you can't afford the 120 a year, then just drop down to basic, get your free 50L every week, and be on your merry way.

What exactly do you pay each month for WoW?
And, what exactly do you get?




If you paid for a year at a time, the cost is US$72/yr.
That breaks down to US$6/mo.
With that (as you said) you get L$500/wk.
Being 52 weeks in a year and doing the math,
you wind up getting L$2166/mo .. plus being able to own 512m2 land.
If you take that $L and sell it on GOM with the current (LOW) rate
of US$3.50 per L$1000, then you could MAKE US$7.35 !

SO... it seems having a Premium account with SL is even BETTER
than free!! Infact, THEY ARE PAYING YOU to play!!!

Now, you tell me again why LL should give you even more?
Name one other MMO that gives you this much "real" value?

(edit): I'd also like to point out that THIS is a total slacker's
profit... you dont even have to log on to get this!

Gabrielle

1. you pay LL for the server resources, bandwidth, development costs, etc. plus a little pocket change (and basic users don't really even do this save for a 1-time $10 charge)

2. you pay other residents for the goodies they create, but only if you want those goodies (freedom of choice!)

3. LL does not want to be the payment middleman when you want to buy something from a resident. If you want something Joe made, LL says "Don't pay me! Pay Joe!" They let the seller set the price, they let you decide whether to buy, and they let you figure out how to pay for it -- with RL money which buys L$ or through in-game earnings.

4. LL offers you a "pay as you need" plan, essentially. Once you have paid LL for the basics of what they provide (the platform and your land), you can buy as much or as little as you want from other residents.

5. You can even pay LL NOTHING per month and still come in-world, do what you want to do, and then decide if you want to buy more stuff with your own RL pocket money.




Linden Lab knows that if you want the creation of high quality goods, people need to be rewarded for their efforts. I think the Soviet Union is pretty good proof of that. What I hear in your words is that people do not want to buy from other residents, they only want to buy from the "game company". Well, that is exactly what LL is trying to test.

I have heard comments a few times that sound like, "Why would I buy $L with real money, this is only a game." I don't know how many people think like this. For all I know, I may have met the only people that do. People like this though are begging for a marketing scheme that seems like they are buying $L from the game company. These people will never help increase the volume of trades in the economy unless some way is found to get them to pay $US for $L.

Even the stipend as it is gives LL money, which at least helps ensure the chance that the virtual world will survive to continue giving at least some value to the $L.
Gabrielle made a good point as well that it could be possible to turn the stipend into an auto-buy on this new market being put together by LL. It was in this thread:
/130/4c/60224/1.html

It would get people to put $US into $L owned by other users without actually increasing the supply of $L created. In any case there is a market of people that could be brought in to buy user created products if they are sold in the right way on the $L. Everybody responds to different types of marketing.

From what I've seen myself, there does seem to be a reason for some form of money flowing into SL. It is all a delicate balance. Money entering and leaving the system can be used to help balance the value of the $L to make it easier for businesses to function. The existence of stipends as they are allows for a distribution of $L to keep the value of the $L from going through the roof in value. If $L increase in value too fast people may not be able to afford as much in world which could cause sales to drop rapidly. This would be just as bad for the economy as a fastly decreasing value in the $L.

There may be too many $L being put in the market right now, which is exactly why bonus stipends have been cut. The dance of the $L will probably always continue. Someday LL may have too little $L being created and they will create more ways for you to earn new $L to stabilize the price. Later they may find again that there are too many $L coming into the market and take away any bonuses they created earlier. In the end though, the best situation for everybody but speculators is if the $L stays around the same value. LL seems interested in working toward this goal.

The content providers are a small minority of Second Life. Many come here, to get away from the Conservative Work Ethic and have fun. People do not want to have to work like in the Sims just to have some money to spend.

What needs to happen is that SL needs to reconize that 70% of the people in SL are here to have fun, and that 15% of the people are content makers. Then the bonus needs to be restored to the way it was 1500 lindens.

Fine, then make everyones basic pay 2000 lindens a week. Not everyone is here to make things, they are here to have fun.

Stop calling it welfare. Its the only way new and old people can get enought lindens to spend at the shops which will now be going out of Business because the bonus will be cut.

1. bonus money isn't welfare. it is one of two things: a reward for good behaviour or a good scam, depending on how one used it. Now kindness will have to be its own reward, and as for the good scam... well all good scams come to an end.

2. welfare has never been cut. it goes on at precisely its former rate: $50/week for each person (if only real world governments had basic income for us all, wouldn't we be lucky ducks? )

3. the linden dropping is a complex issue. LL seems to think there aren't enough money sinks and that may be one issue... but selling too much land at auction for USD may be another, potentially, as land remains unsold week after week, leaving those who bought at auction paying the teir until they sell it off. Likely, a single action won't be enough to stop inflation, but the Lindens are smart and seem to be operating on a few fronts to stabilize the economy.

4. making it easier to buy linden (more cheaply than ever, now) may be a good option for some folks who don't want to work in game. another might be freebie shopping. it is amazing how many goods and clothes are available for $0 or $1 L in game!

5. you don't have to build things to work in game, but it is the best way to make money if you are a clever marketer and dedicated to improving. if you don't like building, you can still host events (though not as profitably as you once might have) as many club owners and venue owners are willing to hire events hosts at a loss (perhaps as a way to convert lindens? or because they are nuts like me?)

They're going to cut out the weekly stippend?

I just started here and that'd really hurt me. I have next to no building skills and no idea how to do the scripting and all so that'd leave players like me high and dry. I also dont have the extra cash right now to buy the game cash and i definitely can't afford to upgrade my account. I think the lindens need to take stuff like that into consideration. Not everyone has the skills to make all the flashy stuff, most are on just for fun.

Again, a clarification—the actual stipend (L$50 on Basic, L$500 on Premium) isn't being cut but the RATINGS BONUSES are. I'm no content creator either, but there are a lot of lateral ways to make L$ if you look for the cracks in the floorboard. If you can ride the rippleshock, then you can find opportunities and have fun with it. I too am unhappy with the cuts because, heh, ratings used to be MY game. But times have changed and I'm ready to adapt and roll with the punches (and kicks, and wuxia sword attacks).

this is bullcrap..

MOST people make about 100L or so, 50 base 50 ratings. Most things cost at least that much.

cuting everyone's stipend bonuses is the same as tax the poor.....benifits only the big shots who can make lots of L other ways.............

You wanan take L out fo the economy? start buying it up at cheap rates........LL can start selling ojects or soemthing...........

Good to see some others speaking out on this issue.

I think the one person summed it up best when they said 70% came here for enjoyment.

And that is the group that this latest economy change will totaly cripple.

Basically, most don't want to build, don't want to hold in game jobs, don't want the hassles of an emulated RL.

Second life is an escape, first and formost for a majority of the people, if you try and force an economy on them that causes them to have to stress in the game. You -WILL- lose those people.

A loss of even 25% of the population would devistate it, what Linden Labs is failing to consider is such a change will cause such a loss. And historical evidence with ActiveWorld, Three, and other simulations supports this loss will happen. AW lost over 90% of it's population in under a year after they changed the rules there.

There is no way you can say such a loss would be good for SL.

The point i've been trying to make is L.Labs needs to look at some of the other services that have failed or are failing, and find some other way to adress the situation, then removing the main source of lindens for those that just come to SL to enjoy, and not stress.

I'm curious then...

If the consumer's unwilling to spend money on what they consume, where does the money come from, then?

that's just it...most game buyers are willing to spend game money, not RL money, on objects that in the end have no redeemable RL value (I use the word redeemable because I know it has time, heart, and soul value to the creator)...and in most cases which they cannot re-sell to earn their money back, as someone would in RL, thanks to past abuse of permissions settings that would allow for that. Now if you were able to buy something, decide later down the line you didn't want it anymore and have a big SL garage sale to get rid of old items you didn't want to earn a little cash...that might be workable, good luck getting the designers to change their permissions though.

First, I sell my vehicles copy/no trans becasue SL destroys vehicles - so I'm not abusing anything, I'm making sure you get to use your vehicle more than once.
Second - you mean all the work I and other content makers put into these toys has no value? I'm rather shocked and hurt to hear you think that.

No, I hear you claim "time, heart, and soul value", but you're just throwing that away for not being willing to drop.. what... most expensive vehicle I sell is 800, at today's trade rates that's $2.80... $2.80 for something you can play with for the next few months, AND get upgrades for it as I improve it? Seems to me that's telling me it has no value to you what-so-ever.

Did you even read my post? I meant that the buyers abuse the permissions when they are set so as to allow for re-sale. And let me repeat what I said above..



Redeemable value. I know they are of value to the creators, and I know those who purchase them in world valued them enough to purchase them, but I think if there is no redeemable value people would be rather hesitant to spend RL money on them if and when stipends are gone and the only source for many players woud be to trade $US for $L.