The real reason for the devaluation.

(I decided to set this up as it's own thread, instead of just a reply on another)

Here's the real cause of the devaluation, and why LL won't change it:

Take a look on the front page. LL marketing has been working overtime to bring SL into the RL media spotlight. The more that they do this, the more people who sign up to see what the article was talking about. They sign up, check out the clubs, see that they have $500L to play with, and buy some stuff. After the first night, 50% of them have probably seen what they wanted to see and abandon their accounts. 95-98% will most likely abandon their account within two weeks. The remaining 2-5% will stay on and integrate into the communities. That small number will then start bringing in more people via word of mouth. Those are the people who will actually buy Linden and acquire land to continue playing.

LL is not goint to change this dynamic for anyone because they know their business model. The business cycle for a massively pmultiplayer game is 3-5 years (Everquest has been an abberation to this model). It's possible to go on longer, but most systems peak at that point and decline as their fanbase migrates to other games. That means that they have, at most, 3-5 years to capture as much of the market as they can and make a profit.

They won't get rid of the stipend. People are wasting their breath asking. The reason for this is that they have to give that large wave of new people somethng to play with to find the 3-5% that will stay. They won't shut down the market system because it is integral to their market differentiation. Namely that you can actully acquire real world wealth in the game if you have the business accumen to do so. If they got rid of that, then the media simply wouldn't care about yet another online game.

I know that the people who are calling for massive change probably won't agree with me, but I bet that we won't be seeing a change to the stipends or the market system anytime soon.

-Catnip

Whilst I agree with quite a bit of your statement the way the numbers were growing for SL don't reflect the way they grew for any of the MMORPGs.

I definitely agree LL is in the drive for more people, but I fail to see how a free basic that leaves helps their bottom line... A system that aims at converting (say) 5% rather than (say) 2.5% of sign-ups into longer term residents, especially land owning ones actually affects their bottom line if that was their main goal.

While devaluation of the L$ by 'printing' money for new users is a problem, I don't think it's the root of the currency slide.


TRADE
I suspect that what L$ really need is trade with the RL world. Currently people buy L$ in order to do things which are fun/useful/whatever _inside_ SL.


As people come up with things to do inside SL which are of use to the outside world then more RL people and organisations will have a reason to buy L$, to get things done, not just because they want to do stuff inside SL.


Currently the major players in SL currency trades are taking money out of SL, so of course the currency will devalue. SL needs people to think of ways to bring money in to SL to have services performed for the outside world.


I like to think of SL as a country which has some tourism but doesn't yet produce anything for export (correct me if I'm wrong). The exports will be services, but they needn't require the external party to the trade to visit SL at all.


Just my L$6 worth.



sparti

Is what? Your post singularly failed to provide one.

Don't you think SecondLife is an abberation to the MMORPG model ?



What "other games" ? There.com ?
Mwahahahaha !!!!111!oneoneone

Take a look at neocron, bugged as hell, poor community managment, tons of marketing business, etc
The majority of the player base is ready to move, some already left. But... where ? there is no neocron-like and this damn game is still alive

Secondlife is so advanced that it will be very very very hard to any competitor to do something similar ...
There is a huge gap between the technology used in most of the MMORPG and secondlife.

Now I just have to jump in here and state that you cannot compare SL to other mmorpgs' because there is nothing else like SL out there! Nothing comes close, and I have been trying to hunt down even a hint of something that is trying to copy or outdue SL. Nothing is being done or developed. SL is a beast of its own accord. The reason for the short life of other mmorpgs is because they are all basically the same thing, and people can jump from one toanother. SL is definately unique, and it will take a long time for another mmorpg game to come out and rival it. SL has a very strong long term user base of users who have pretty much been on here since its inception.
I disagree with your idea of the devaluation, and I state that the points you did bring up were vague at best. The devaluation is due to nothing more than the sellers trying to unload money fast. if we want to increase the value, we just need to add a simple fix to limit how low you can sell your L$ for. So lets stop the conspiracy theory on LL's behalf.

Thank you, and goodnight.

Project Entropia. Same marketing ploy...."Play our game, make real money."

Hey, you said a hint! ;p

Actually... it's not.

Building/scripting... not available with Project Entropia. Their idea of making things to sell seems to be comprised of getting a blueprint and finding materials, then button mashing at a manufacturing terminal. Sounds just like crafting in EQ2.

The process for depositing RL cash into your in-game account with Project Entropia seems rather involved... in other words... it sucks.

Though Project Entropia has a similar concept about RL cash being used to buy in-game items... Project Entropia does not compare to SL's diversity and functionality.

2 totally different animals.

the $L continues to slide because there isn't a demand for the currency to keep it up.

It used to be $L250 and whatnot because the world was much smaller; fads, new products, and most importantly, land would keep the demand for the currency up.

Now that anyone who wants a lot of land simply buys an island, there's nothing propping the currency up. Slide, slide, slippity slide...

Aye, I guess the big question is what do people need $L for?

Would be interesting if LL were to disclose where $L went, I'm sure there is a way to at least sort out the standrd land purchase verse other in-world transaction.

I think 90%+ of $L went to land purchase. Now with the release of the new continent and increased private island ownership, the land shortage is no more. It's a buyer's market for both land and $L as a result.

Whatever the reason for the "devaluation", I am sure that LL will take measures to ensure that the economy remains relatively stable. It is within their best interests to. If the economy is completely pooched... SL suffers.

How do you figure that people are "taking money out of SL"?

When you put L$ up for sale on Lindex, you're trading it for USD. The L$ don't go away, another resident is buying them. They get your L$, you get their USD (minus the commision LL gets).

The only way money gets taken out of SL is through sinks. Lindex is not a sink, and it never removes a single L$ from the SL economy.

- Jon

Sorry to debunk the hysteria, but the number on the front page isn't total accounts ever created, its accounts that have logged in at least once within the past (60 or 90) days. I can't remember whether its 60 or 90, but its one of the two. If we were talking total accounts ever created, we'd be approaching 350,000 at this point.

When the number said 30,000 accounts, I had 60,000 name/key pairs in my database. What I'd like to hear again is how many accounts created convert to premium; I believe it was something between 15-20% last I heard, but I'm not sure on that.

Regards,

-Flip

A few comments:

1) The competition may not be out there yet. When UO was strong, EQ hadn't been invented yet. So you can't say that the business model doesn't hold true. Yes, SL is a different engine, but it is not beyond human ability to create a competor if SL proved to be profitable.

2) The number on the front page, however it is measured, is still a scaling indicator of acocunt population to at least some extent in SL, and it has grown by 70%.

3) Elde, my apologies for not directly spelling out the path. Many new signups that spend their beginning stipend, but drop out prior to ever going premium, buying, land, or buying $L funnel that stipend to the most successfull merchants, who cash that stipend out without any counterbalancing buying pressure. Hence the devaluation.

-Catnip

You really think so?

My first couple of weeks, I spent my L$ on all sorts of things. I don't think I found one of the "most successful merchants" for a while. I was too busy walking around and seeing the sights.

Besides... even if I spent my L$ on a merchant that does cash them out, how is that any different then spending them with a merchant that doesn't? Either way... my L$ stays in the economy.

Now answer me this...

If the stipends are removed... and the value of the L$ increases to stupid levels... how many new subscribers do you think will stay on seeing how much it would cost them to get L$? Hmmm?

LL has to play a fine balancing act between the desire of those who want the L$ to be worth more, and the need to maintain a steady population growth. Those of you who want to raise the value of the L$ without giving free accounts *something* to play with... you are asking to remove an incentive for people to try SL. Very short sighted of you.

The L$ will not stay valuable for long if the population decreases or slows its growth because L$ costs too much.

I know, I know, but he said hint.

A better example is probably "Active Worlds" or "The Sims." Active worlds has been around forever, but it never really took off. The social concept is practically the same for all three, which leads me to believe that the economic aspect is probably keeping SL from going the way of the other two.