Linden Labs Says (Raise Prices)

Again. If you are paid through 2007, how does any of this affect you? If you don't buy anything anyway, how does a change in stippend affect you? If the $L value keeps doing what it's doing, you won't be able to buy much of anything soon, anyway, but, again, since you don't already, how does this affect you? And you call content creators greedy when they are hoping that what they add to the game will at least cover their monthly costs, and are having a harder and harder time making this game more fun for you, while you just want your $500l, the thing that you don't use, is getting closer and closer to being worthless, and the thing that is one of the big reasons for driving down the economy, simply on principle? Seems like youre the greedy one.

I pay money to Second Life and make no income from the game besides my little stipend which had been used to buy crud content. My last 2 skins bought are useless. I should go to the welcome center and give away transferable content for free. After all maybe a newbie will like it but they don’t know any better do they?

I am worried the noisy here will brow beat Lindens Labs into stopping all stipends now breaking their contracts with the people that input money into it. The trouble with Second Life is people think they have an entitlement to draw more money from it then they input. Someone somehow has to inject this cash into the system. In the case of the Linden there has to be willing buyers. The price is going down because the demand is going down. People can rent from Anshe Chung directly for dollars. Thus saving a lot of the nonsense of the Linden Market. My next property will be in dreamland and I will pay my dollars directly to Anshe Chung and not to make RBD or lose money playing with play money. If you want to make money look at her for a successful business model.

They've never broken contracts for aying customers before, why should they start now?




That's what all businesses an companies in the entir world do. They really should stop, huh.



Why not the people who appreciate, or wish to appreciate, the work that someone else has put into something? Instead of LindenLabs themselves for whom it doesn't cost anything at all to make $L. I mean, technically, if you follow the money to the source, if I put in $1.50US worth of work into something, and you give me $500 for it, I made $0 because it cost you $0 to come up with that $500, which cost $0 for LL to print. Not very fair I don't think.



Based on Lindex market data, the demand has actually been fairly stable. Almost the same amount of money was bought by someone else every day for the last month (plus or minus $1.5mil). The supply is going up, while everything else remains annafected (why would people want to buy more $L if the same amount can uy them now what it did before in game?) that's the problem.



So, you're against businesses and investors making SL not fun, and in turn are supporting one of the biggest businesses in SL? One who has been acused of screwing the economy to begin with? (yes, you can easilly and quickly sell off your L$ to her on her webste, but you'll be loosing a lot of money on the deal she gives you, and then where do you think that $L ends up? If you said "the market," you're right. It just ends up being resold, along with everyone else, and driving $L down even more. Her margins on the trades she does for Buy Now are much higher than the ones on Lindex).

Now, I'm not an economist. it's all black magic to me.

But, it occurs to me, why follow the Petro dollar example? Instead of forcing people to buy oil with only US dollars in order to drive demand for them, why not force people to only be able to purchase land with linden dollars?

No, it cost him between US$6 and US$9 to come up with that L$500. It is true that the US$ in this case did not enter the currency market, but from his point of view they were still paid.



Great! But now think about the following question: why would people want to buy more L$ if the same ammount now buys them less than it did before in game? They don't need that extra stuff, and if SL isn't fun it doesn't make sense to spend more on it.



Anshe provides a service, in terms of both land and money, of letting people perform a transaction immediately that would otherwise cost them extra money to delay. It does have a negative effect on the economy, it's true, but I'm surprised that you as a business advocate would say there's anything wrong with her changing for that service.

Because LL can't sell sims for L$, since LL's hardware suppliers and ISP doesn't accept L$.

Once LL has sold that sim for US$ all transactions related to the land on it from that point must be based on US$ equivalence or else someone will be losing money.

Actually, they don't. They input money for their premises, and they take out more money because they make a profit..

But then they use the money to buy stock (input) and expand the business (input) and to pay their staff who use it to buy stuff (input) and put it into the bank who loan it to other people (input...)

Ultimately, everything the business takes out will go back in somehow.

Wouldn't then, the L$ end up in the hands of LL? Then, they would have to sell it on the exchange for real dollars. Hmm. Just thinking aloud here. So, Customer A buys L$s. Uses them to purchase land. The L$ go into LL's pockets, who, then, put them on the exchange to sell. Assuming that land purchases would be a large enough percentages to drive the market value of L$, wouldn't it also be enough of an influence to allow LL to, at that point, when putting the money back into the exchange, drive a regulatory price? If the land monies from LL are a large enough percentage, LL's asking price would then stablize the market?

Ouch, my head hurts.

In other words, the supply of L$ has risen by the same amount that the demand did. Sorry.



Not when they need to sell that L$ because the men with the bandwidth bill are knocking at the door right now and the men with the cable cutters are only 30 days away.

Well, the SUPPLY is the same, but we're already driving demand by tying it in with the demand for land.

And, yes, they have to sell it, to pay for the servers. But, let's say 100 people are selling L$.

10% of them are selling it for $1 for 350L$. 10% are selling it for $/300L$. And LL, which are offering 80% of the available L$ for sell are selling it for $1/380L$. That drives the price up. And allows LL to 'control' the exchange.

Again, "his" $6 to $9 does not get converted into $L. That money goes to pay the cover for keeping up the SL servers, and paying for th e bandwidth. The $500l is a sort of a bonus that $LL just makes out of nowhere and gives away to users. If the $500l was taken away, chances are LL would still need that same $10 per user to support the servers and bandwidth (although they don't nessesarily need to get it from players directly, instead possibly switching more to Lindex fee based income).



Easy. If $5us used to buy them $1,500 then, and buys them $1,650, and the item used to cost $1,500 then, and costs $1,650 now, they will spend the same amount of money to maintain the same level of life they had before, but will end up buying more Linden.



There's a service, and then there's ripping off uninformed people. Even at the current REALLY unfair instant buy offers of $340l per $1, you STILL make $294US, which is still $14US more than what Anshe charges. People have a bad taboo feeling associated with using Lindex, or simply don't understand how it works, and she's taking advantage of them by offering REALLY low prices. It's not illegal, since the buyers are actually willing to do such a trade, but it's kind of like having a gas station that sells gas for $3.60 per gallon (while everyone else is selling for $3.00), and making money just because people in the local area don't know that gas is actually supposed to be a lot cheaper than that.

That doesn't matter - the original statement was "it cost you US$0 to come up with that L$500". That is not true, it cost him between US$6 and US$9. The fact that the US$ was not directly exchanged for the L$ is irrelevant in that context - it did indeed cost him US$ to be able to pay you that L$.



That's in the case where prices rise and the L$ falls. But that isn't really an increase in demand, it's just the same amount of demand with a different label on it! The question is, what happens when the L$ rises?



Or because it would cost them more than the price difference in gas to drive to the next gas station. I agree, the service Anshe provides with regard to L$ is worth a fair bit less now that LindeX has open buys but I can still see where it could be useful.

and why don't you shut up until you're ready to adress the real issue...money mongerring manipulators trying to force us to buy your Ls.


and BTW, I don't care who says to. I ain't raising prices.

Wow... didn't anyone actually read the one sentence in Lawrence's post??

Let's put a little emphasis in it and read it again:

If you're creating customized goods for each buyer, then you should raise your prices to reflect the change in exchange rate.


IF you are creating content that is custom made for each customer (or made to order for each customer), then you should (a suggestion) raise your prices accordingly. In other words, if you are making custom orders you might want to raise your prices but if you are not making custom orders then raising prices isn't really needed.

For instance if you build someone a custom home on their lot then you may want to charge more than if you were building a home to sell unlimited copies of. The same applies to limited editions. I don't think Lawrence was saying to raise prices on everything you make that is not a custom order.

Its funny how Linden Labs acknowledges the Inflation in Second Life
by telling people to raise prices to reflect the market shift in the L$.
Considering its Linden Labs own fault for the inflation in the first place..
If they would trim back the stipend output, the issue would go away...

Forgive me if I say something stupid. I just found SL, and I mainly came to this forum to try to figure out how I'm supposed to get money to buy things in the first place. This forum didn't help much, but I think I finally figured a little out after looking around the web site. At first I was confused about why on earth I'd buy play money. Then I saw that I can actually sell the play money too. The one thing I still don't get is where people think they have real life expenses for a game? Where is that coming from?

Anyway, back to the point. If I'm understanding things right, why is there so much concern about free play money to everyone in the form of a stipend? The suggestion Linden Labs gives seems very reasonable. If there is more money out there, why don't people just raise their prices? If you really do have the same market share, and there are more people playing the game, then you should be making more real money no matter how much play money is in the system, right? I would think the concern would be how much real money is being spent by players, rather than how much play money is there floating around.

Besides, I think it would be good for an economy to have more money per person as the population grows. A small population doesn't need much money, because there are few transactions and little complexity to the system. A large population would probably need a much larger money supply to make the system more liquid as the system got more complex, yes?

Again, I'm new and probably missing some things. Just my thoughts so far.

Just some quickies to catch you up on things.

1) even though its a game, land is EXPENSIVE. It costs $1,250US to buy an island, and anywhere from $150 to $300 a month to pay for it (I still haven't heard a concrete figure on this). Some people own so much land that their expences are in the $600US a month or mre (payments to LindenLab). People who rent at times also have to by $L from the Lidex web site trading market to cover their rent.

2) Many people fear that if the devaluating $L forces people to raise their prices in game, that will cause their sales to plumet, since there are a lot of people who are selling content for really cheap, not relying on real $US conversion, and also because A LOT of SL players don't associate the value of $L with the value of $US. Even though $100L and $110L may actually be the exact same amount value-wise if the first one was in April and second in May, to a lot of players that looks like a price increase (which it isn't technically), and they won't want to pay for that hike. i.e. lost sales.

3) Devaluation of $L also tends to cause anyone holding their money in game to loose their value. I.e. what I have today will be worth less tomorrow. This causes people to try to sell their $L as soon as they get it, since holding on to it would mean loosing money, and in turn keeps driving the market down with more and more people effectively attempting to "throw their $L away" on the market

4) Some people believe that the only way to solve this problem is by balancing the amount of money available in game (reducing the percentage of money per person). I.E. they think there is already too much of it floating aroud, and with more of it being added every day, it just makes everyone have even more $L, and thus value it even less. There are two ways to fix it.
One is increase the amount of money going out of the whole system through sinks (taxes, fees for certain cervices like teleportation, etc). Other side argues that this won't work, since people will just avoid paying the fees, or will "game" the system to get the same services without paying for them (teleports can be scripted, taxes can be avoided by laundering money, etc). Plus it is probably harder to take away money from people than simply not give it to them
The other is to decrease the mount of money going into the system. The only source of money at this point is the weekly stippend payments. The group that wants stippends reduced hopes that by doing so, $L will become more valued, with it being more rare, and hopes that less of it being given out will cause more people to resort to having to buy it on the market, which would make its value go up. The opposing side, however, argues that cutting stippends will further decrease sales, since, again, A LOT of players don't see a connection between $L and $US, and seeing $L as just game money don't want to pay real $US for it. They believe that a lot of people, when receiving less $L a week, will simply cut down on their purchases instead of going to the Lindex market to substitute their stippend loss with real $USD.

Both sides are probably correct in their own ways, and the issue is no doubt hundreds of times more complex than this, but that's pretty much it in a nutshell, and is the cause of debate on this forum.

Here we go again.

RD, are you still trying to scare people into dumping their L$ onto the market so you can buy them and sell them back at a higher rate when the exchange swings the other way?

tsk... tsk... tsk...

You're the one thats nuts.

For thinking the L$ will climb in value.

There's only one way for this baby to go.... DOWN!

SELL
SELL
SELL

That's funny... I noticed the value improve recently... then all of a sudden, here's RD's post. Just validates my theory that those who scream about the value of the L$ may very well be trying to devaluate the L$.

Wow, land is expensive! What is this rent thing you talk about though. I see the land sales, but I don't see any renting? Are some of the land sale ads actually rentals?

As for the other stuff, I think I'm starting to understand why people are so up in arms with it all, but its pretty hard to really grasp all this at once. I'm still trying to get over the shock that Second Life seems like a place that can make the players real life money. Only reason I even can grasp that $L might have a US$ value is I found the Lindex Currency Exchange thing on the website, I'm sure alot of new players like me don't see that for a while. I'm still a little confused about two things. What are the ways the money leaves the system? You mentioned rental, land sales looks like it isn't really leaving the system. Is there a tax that I don't know about yet? The other thing I'm wondering about is banking systems. Are there any forms of banks in Second Life where people can earn an interest? I know one way people can be encouraged to value or devalue a currency is through manipulation of interest rates. Sorry about the newbie questions. It is just that there is way more to this place then I ever expected, and I'm not completely sure how else to find my answers. This is college business majors wildest dream of a playground come true.

Um, that's trully a retarded idea if ANYONE out there is actually trying this. LL themselves said that they do not want to have $L have a constant increase in value. They want $L to be moved around and bought/sold with, instead of stashed in savings accounts. So if it starts to go up in value (which it hasn't consistently done for almost two years now, and has NEVER done on Lindex), LL will just start selling off their own $L to keep it down. Crappy down trend of the $L is the LL polcy. Having it be more or less stable (not go up) is ours. Believing that it's possible to force game curency to go down with the intent of buying it up when it's cheap and selling it for a profit is jus stupid (especially since it will take YEARS for it to drop to a point where the upswing will even be profitable, because there is no way to predict the bottom point after which it will go up, and because there is zero guarantee that once it hits bttom it will somehow for some reason go up. And also because if you buy up a lot of curency and wait till it goes up to sell it, the act of you selling it will in itself drive it's value down AGAIN, since you selling it will increase the amount of it in the market to where it was before).

I'm not trying to scare anybody, I'm just pointing out the facts.
If that scares people, then maybe they'll take up the debate on
why Stipends need to be cut 95%.