Linden Labs Says (Raise Prices)

That's true - but from the buyer's point of view, it's irrelevant. The buyer's only interest is in getting as much as they can for their US$.

It's a RL market reality - if you want to make your own brand of cola, then you're probably going to have to sell it at the same price or cheaper than Coke, even though Coke have a far bigger customer base and can benefit from huge economies of scale. Your customers don't care about you not having those things - from their point of view, they're paying US$ and getting a drink, and your comparative inefficiencies are your problem. If your drink is better from their point of view than Coke, you might be able to charge more, but that depends on how much they value the difference.

The closer the SL market gets to the US$ and with it the RL market, the more unpleasant factors from the RL market will start to creep into the SL market. With the new L$0 newbies, the US$ they buy their L$ with will be money they could have spend on Half-Life (or whatever)!

Yus, but one has to keep the break-even point in mind. If you would go broke by selling at the same price as Coca Cola, you shouldn't even begin to produce your coke. As you have stated, you don't need to go for the price leadership. You can try to get the quality leadership on the market by producing better products for a higher price.

Maybe the skin DOES have a better quality than other skins. The market will decide the fate of that shop. If the creator has priced it appropreatly, the shop will survive. If not... you know the story.

So to all the newbies trying to open a business: Running a store in SL isn't much easier than running one in RL. Sure, it is pretty easy to produce something... you don't need a factory for that. Still some business skills are neccessary to operate a successful shop. So grab a book and learn a little about marketing and cost calculation. It will be easier for you.

There's a combination of a. wanting the $L thjey charge to be worth the same now as it did a long time ago, and b. natural evolution of this style of economy where the qquality of content is constantly improving. This place looked REALLY crappy two years ago compared to the gorgeous worlds and creations we have now. Naturally, more money is put into the system, and more is expected to get pulled out of it. For some of the still crappy content the prices haven't really changed much to my knowledge. (Heck, freebies are still free, too, and there's still plenty more of those coming)

One of my friends, btw, used to charge $12,000L to $15,000L for his avatars. They were custom made, oftentimes resebled pictures supplied by the people wanting them almost exactly, and were exclusive to the buyers. That's a high price, but that $30 is really no different than what you would pay an artist to make you a RL art comission. (After getting swamped with request, with his waiting list going over 10 people, he decided to stop taking any more requests.)

And the rising value of the L$ tells that story.



That's exactly the objection, though: running a store has been made harder now by the reduction of the "free" L$ in the economy, but that's only been done so that the people who made money while running stores was easier can cash out for more.

But, again, the money was put in knowing that things like stipends, bonuses, starting money, existed. Because of the social nature of SL, the workings of "content quality" are a little confusing..



No, the prices have come down because of the falling L$.



And that's fine, but that's custom work, which doesn't match the example I gave.

Most of the content I've seen from a long time ago was priced above the stippend allowance to begin with. A $600L to $900L av is more than you could afford with a $250L starting bonus and over a month of $50L a week stippends. I believe most of the content was created on the assumption that $L would come from somewhere, not really thinking too much from where, and when the $L kept coming in, the prices kept being supported at their level. Not sure if that will change now. Maybe, maybe not.