Brainstorming: How to solve the economic problem

Exactly - they are the kind of people who expect a quick buck, realise it requires effort, and give up.

That's why we see the resident figure skyrocketing ... and the in-world resident figure remaining pretty static.

Getting people here is easy. Retaining them is where LL fail dismally, and this constant referring to making money - and subsequent failure - is unquestionably the source of this problem.

Unfortunately most residents seem to think that SL is only malls, casinos, *ingo and camping chairs - so whilst there are certainly a few that provide quality content and entertainment, or stuff worth buying, the majority of 'active' players don't help the situation either.

Lewis

Linden labs could create and sell land at current market prices for lindens.

Since they plan to sell lindens, they wont go broke doing this.

A simple way is to sell the land at 5L$ per square meter. The danger of that is certain undesirable parcels may not get sold and it is charging too little for nice parcels so would hurt land sellers.

A better way is to:

1. sell at 10 L$ per square meter
2. automatically reduce the price of the parcel by 1 L$ per square meter each week until its sold or hits 1L$ per square meter where it would stay at that price.

Increasing the value of L$ "sinks" would probably not stabilise the economy. This is because simply making L$ more expensive wouldn't lead to more people paying US$. For the majority of L$ buyers, they obviously are not making profit from SL, so to them SL is an entertainment product and all you're doing is reducing the amount of bang they get for their buck. That doesn't usually result in people spending more on that product.

At the moment, we have: rising content supply, rising L$ supply, static US$ supply. The result is the devaluation of the L$ that we're seeing. But if the L$ supply was fixed in place, we'd have rising content supply, static L$ supply, static US$ supply. Instead of a rising volume of L$ chasing a static volume of US$, the problem would now be a rising volume of content chasing a static volume of L$. The effect of this would, very likely, be either a) reduced content sales and reduced userbase as people become unable to get the experience they want for the amount of US$ they're prepared to pay; or b) an in-world price war that would deflate the L$ value of content until the eventual "content to US$" exchange rate was equivalent to that which would have arised had the L$ continued to devalue against the US$.

So what's the solution to all of this:
a) develop, develop, develop. Increase SL's technical scope as a platform to increase the quality of the experience it offers to the point where more people will be prepared to pay more US$ for it. Less lag, better graphics, more options.. you know this, right?

b) Make effort to challenge the strong community perception that a "successful" player should be able to play SL for free; although it sounds valuable and encouraging, it also leads to the reasoning that buying L$ is a form of "failure". (I've seen several players speak of "being reduced" to buying L$.) This reasoning is wrong, but if people are told that it's wrong, they'll likely be reluctant to buy L$ because people don't like giving money to people who tell them that they are wrong.

c) introduce items or additional features that are obtained by going Premium, or by buying L$ on the LindeX, but which cannot be created by players. This acts against the culture which states that US$ purchasing is an "inferior" method of obtaining content that could have been obtained by earning L$ or creating it.

d) remember that continuous content spending - which will be necessary to sustain the value of the L$ - will be competing with tier fees to offer "the most improvement to your Second Life for your monthly buck". If it's the case that no amount of content can compete with land (as people have stated on this forum), then the content must be improved until it can; if SL won't allow that level of flexibility in content creation, then it must do so.

e) As others have said, introduce a continuous (rather than discreet) tier scale. In the last few weeks I've had to turn down a person building a business on land next to mine who wanted to buy a portion of my land, on the grounds that they were not offering to buy enough to reduce my tier, so any gain from the sale would be wiped out in "wasted" tier fee - I imagine similar things are quite common and reduce liquidity.

You mean SL isnt? Walk around for 20 minutes and thats the first impression anyone would have. I just returned from 10 month "leave" of SL (extended overseas vacation where didnt have adequate connection.) My last month there I was sad that would be leaving but at same time excited to return to SL. Already had it scheduled to have cable internet hooked up on day I returned to US; before the installer got out the door I was downloading latest SL patch... Couple friends that came over to welcome me back was standing around and I wanted to show em SL... log in and after 10 mins was like "what the hell has happen, this isnt the SL I remember."

Ill be first to agree that way SL is currently being promoted as a "get rich quick playing a game" scheme is hurting it. As many have said, the retention rate of people checking it out proves this. In LL's defense, thats how majority of its residents are treating it. Yes there is a FEW beautiful people left, a FEW builds that are beautiful just for the sake of being so; but nowhere near enough. Nowhere near what it used to be like. No wonder the play for greed adevertisement campaign. Thats what majority of residents are staying for these days.

Guess my long winded suggestion is instead of downing the lindens policies; lets as the people who love SL... return to our old ways and give them something else to advertise. Lets show peole what first attacted us to SL. I would be willing to bet that most the old timers didnt come here just with ideas of making cash... they came with the sparkle of excitment in thier eyes of unbound possibilities. More new people STAYING could only help the economy. After thats achieved maybe all this hiend economic muble jumble will still be needed; but my vote is lets start somewhere we can control. As much as hate to say it.. I miss the old days when couldnt swing a dead cat around on a string without its corpse getting molested in 20 sex clubs; atleast back then ya didnt get billed for it happening.

I agree sadly however i couldnt afford it!

here is my modest proposal.

lets put prices on everything.
charge to rez prims
charge to add comething to the "content" of an object
charge to cross sim borders
charge to teleport
charge for space in your personal inventory
charge to add people to a friends list
charge to chat
charge to IM
charge to compile each script
charge for basic accounts
charge to get the client
charge to change clothes
charge to customize appearance

no more free lunch, anything that strains the servers need to take a payment, and it can't come from these stipends, everybody must start at zero, get no free money, and have every last linden come from RL dollar purchases. Lets see how much fun this place is when we have an economy without play money, and a price on every action performed. Finally businesses will get the precious stable currency they need to sustain themselves, people will get the money they are entitled to. Finally the sinks will equal the sources.

The most important sinks though are the ones on content creation, only people who put in dollars should be able to earn them back by selling creations, when anybody can make stuff freely nobody has any reason to buy linens. We need a premium on the ability to create things, perhaps that feature should be available to paying users only, no more of this 5 free uploads weekly garbage. This is entertainment afterall, so it must be commoditized and sold in order to sustain its creation.

These would immediately put SL behind IMVU, TSO, There or any number of competitors for the social users who are the best providers of consumer base for the type of content existing in SL.



Has anyone created scripted tumbleweeds yet?

It hasn't been a week yet man, we start shooting each other's ideas down after the week has passed so everyone gets a chance to propose something

The way the rest of the computer industry keeps money coming in is through moore's law, but I really don't see SL being able to improve itself at such a rate which will justify the continuous spending that would be needed to stabalize the value. It is really rare we ever see something that is nice enough to throw away our old stuff and buy the new thing, things just aren't improving fast enough.

The only real way that this problem will ever be solved is for $L to stop being converted to USD and instead be returned to LL so they can recirculate the money. With that done, they wouldnt need to print more. Problem solved. Its foolish to be profiting off a game to begin with.

And as for the one with all the rediculous suggestions like paying to change clothes and all that garbage. Just let him suffer that fate while the rest of us enjoy our sl experience.

I agree with you that "sinks" like paying for prims and changing clothes are not the answer Graylan, but while you might be happy if a large number of content creators left the game because they no longer received US$ for their efforts, a lot of residents wouldn't feel the same way. We have to accept different people play the game in different ways and this would effect not just those creators but a large majority of residents - "consumers" who enjoy buying and using what they make. Free stuff is great, but some players want more choice than that and would leave if they couldn't have it. SL and LL relies on a growing and diverse population for its survival, it has never been a totally free platform and that goes for some of its content too.

Currency trading and simple cashing out of stipends aside, it seems to me the Lindex is a mechanism by which "consumer" residents can pay US$ to "content creator" residents. So what is causing the current imbalance ? If the content creators are finding it hard to sell their Lindens at a good rate it's not simply a matter of there being "too many Lindens" surely, because all those Lindens have been spent on purchases from them... there are sufficient people wanting enough of their products.

So surely the issue is more to do with not enough US$ being exchanged on the Lindex since this is what everyone who is selling wants. This surprises me since the only new source that doesn't have an associated exchange of US$ is stipends and I personally wouldn't have imagined even L$500 a week for the premiums would be enough to cause this, afterall, who makes a land purchase with only their saved stipend, or how many really nice items can you buy with it ?

Sorry, this is "first principles" stuff for me as I'm no economist, but I'd still like a better understanding of all this with respect to all the issues involved.

So to continue...

Sinks don't seem to be the answer if only for the resentment that giving with one hand and taking with the other would cause.

There is obviously plenty of demand for products/services/land or the content providers wouldn't have all those Lindens to sell and saturate the market with so limiting the content supply side with artificial sinks such as increased upload fees, paying for prims etc isn't the answer either.

I still can't believe the excess of Lindens and the lack of US$ is really due to stipends given my previous post, but I just can't think how people are otherwise ending up with so much money to spend without exchanging the corresponding amount of US$ to recompense the content providers at a good rate on the Lindex, so it seems to me stipends would have to go.

Free accounts and free items are readily available for those who believe in not paying for anything so I don't see the objection to removing them. You want free, you can have a free SL experience, but don't expect to be able to get free content from those who expect a little recompense for it, which is basically what demanding a stipend and then spending it on a product made by someone seeking to be paid RL money amounts too.

This really does seem backwards to me Ng.

There is nothing to be gained paying LL L$ to do any of these basic functionality things other than causing resentment, particularly is it would no longer be possible to have a "free" SL experience. Additionally, premium residents have effectively paid for these things anyway as they are what you would expect as a basic level of service from a service provider.

The strength of SL is its diversity. We need a solution that can allow a free culture to exist side by side with a commercial culture.

The Lindex needs to be stabilized purely so content creators on the commercial side that wish to profit from their work can do so, so there seems little point in penalising them either with taxes or fees.

There seems little point in "play money" - you either pay for something or you don't. there are other ways of "keeping score" if that's your idea of the game.

By simply removing stipends rather than increasing sinks you allow the players who want a free experience to continue to enjoy this with NO charges to do things and access to all the free content they want.

Players wanting more than that, particularly the products and services offered by other players who want to be paid, need to exchange US$ for L$ to do that as LL have been withdrawing any financial support for content creators themselves.

The real reason we have an economic problem is that we're thinking in real world terms in a world that's not supposed to be fully like the real world. In the real world we deal with electricity, water, gasoline, and food expenses which are all recurring. Our vehicles in SL do not use gasoline, and our avatars consume nothing to exist.

Putting these charges in will certainly fix the economy BUT will also ruin the SL experience since the main point of SL is to get away from RL stress.

Hence:

These suggestions are instead based somewhat on system load, as in you pay if you want people to put up with performance hits that you are causing. In short, they who create the most lag pay the most.

1. Prim limits on avatar attachments, with a small daily charge for exceeding such. We've all seen these: Avatars with a horrendous number of prims causing lag by their mere presence. I would put a limit on how many attachment prims come for free then place a charge for exceeding it. The charge is applied once per day and once paid you can have as many prims as the charge covers for the 24 hour period. If you want more prims on your av, you pay more to show them off.

2. Active script count limits on avatar attachments, with a small daily charge for exceeding such. It's been shown that scripts whether doing something or not, as long as they're active, appear on the sim script queue. Such a charge will either force people to turn off scripts that are not supposed to be doing anything or force people to be a bit more creative in minimizing their active script count. The charge is applied once per day and once paid you can have as many active scripts as the charge covers for the 24 hour period.

3. Charge for load caused by texture or sound. The charge should be paid by the person actually using the large texture file or large sound file. To make this part work creators need a free preview system (perhaps something client-side) so that they can get everything right before confirming the upload. Someone before suggested a 30 minute grace period before the charge is applied for large textures and I think that might also work. The idea here is the larger the texture you are showing, the more you pay.

The three suggestions above will force a mentality of minimalist creativity where you try to get the same effect using less. A lot of "creativity" I see now entails horrendous texture sizes and prim counts. It looks great, yes. But it really lags the system.

Similar guidelines can also be worked out for vehicles and buildings. I use avatars as the focus here only because they're the most seen.

I still think you're trying to charge people for basic functionality here Aodhan, and in paying LL for it you're not helping the problem of recompensing content providers via the Lindex or indeed LL to be profitable in the real world.

The fundemental problem here is that LL not only creates NO CONTENT, it also offers its OWN SERVICE for FREE via free accounts, and furthermore offers FREE ACCESS TO THE CONTENT CREATED BY OTHERS via the stipend. This is simply unsustainable.

I accept LL giving free accounts to encourage new residents, but ultimately they have to be profitable by charging US$ (NOT LINDENS) for the only service they offer - access to and use of, the infrastructure of SL.

Furthermore if they wish their world to prosper by benefiting from the attraction of content created by users who wish to be recompensed, they need to support a system that allows just that, and giving stipends effectively amounts to giving away the content of those residents trying to earn US$ from it, for free.

This is why we have a problem, it's as much about LL's real world economic model as it is about the SL economy in isolation.

CJ please abide by Mad Wombat's rule. It is a standard rule in brainstorming that any idea no matter how hare brained is not rejected at this phase.

But to address your point anyway, no, it's not charging for *basic* functionality. It's charging for *excessive use* of same function. # prims and # scripts on your avatar are free. This number can be maybe 100 or so prims. The idea was to charge the people who are using incredible numbers of prims and scripts. There already have been complaints of 100-script avatars causing sim lag, and there are also complaints arising from prim-hair with really high prim counts.

I'd rather not comment further because my answering your point is already in violation of the rules of brainstorming. But I will say, my idea is not just a pie in the sky suggestion. It has a foundation.

My suggestion has a win-win aspect to it. If people want to avoid the charge and start cutting down on prim count, script count, and texture/soundbyte size then we get less lag! If they insist on having a 1000-prim avatar, they help the economy by paying rent.

Ok, I'm sorry about that. Debate for me isn't confrontational or critical so much as exploring ideas as presented.

Would it be critical to say that your idea has much merit in stabilising the use of Linden Labs resources, but little bearing on the economics ? Technically meaningful "limits" can be established wrt server loads, but in terms of economic impact are effectively arbitrary.

Little bearing is still bearing. It's still a potential money sink that does not bring the everyday RL stresses into the SL world. Besides, we're still in the brainstorming phase where the goal is to collect as many ideas as possible with no prejudgement. Even an idea such as "make everyone wear green" has to be accepted at this point.

The second phase would be studying ideas, merging ideas, mutating ideas.

is it not possible to link vendors to some sort of updating price ratio? lets say someone wants a buck (1usd) for item a. and today lindens are 500000000 to 1usd. well...seems this would solve the sellers dilemma. this would also make no difference how many lindens there were. i know i have started pricing things based on usd ..not lindens.

so every 10 minutes the vendor updates and the buyer simply pays the buck... or pays the ratio in lindens. it wouldnt matter how many lindens were produced or sold. if you started selling things outside the bounds of linden they would quickly understand people meant business about gaining control of the economy.

watch ..someone will try to make this vendor and sell it ..when in reality everyone that sells should be given it for free for the sake of the game.

I realize how the suggetions can appear outragous. You guys really need to read some more, I'm surprised more of you didn't get the reference to "A modest proposal". Look that piece of reading up and it will put my message in a better context, make alot more sense, and reveal which side of the argument I am really on . I thought that would have been more obvious considering the fun wording I used, but it looks like it didn't work so well on some of us.

here is some help http://art-bin.com/art/omodest.html

I am pretty pleased with the replies that it incited though, especialy that free culture stuff, even if they hapened a few days too early.

The easiest thing to do would be for people who want to make real money, would be to charge real money, stop with the unstable play currency(which doesn't show any sign of wanting to become stable) and just sell things with dollars if you want a stable system for earning cash. Kinda like what was said earlier, let them dynamically update their prices using the current exchange rate so they always get the amount of dollars that they want, the only challenge there is convincing people that the content is worth that much, most of the stuff I see just isn't worth the money people are asking for it. The only problem here is that people can't cash out at the very instant they get the lindens(unless they are selling stuff over the web for dollars or unless SL has a paypal vend feature) so they lose money the longer they sit on those L$.

These are just silly pictures and 3d objects, most of it could be plopped out in five minutes by somebody with a good routine for producing this content. No way I am paying five bucks for a picture based on a TEMPLATE that somebody who knows that they are doing can pump out in less than an hour. I would pay 10 bucks for an hour and a half of music, but it would have to be really good, and competitive with music we can find on archive.org for free. If you are gonna charge money for this content it has to be better than the stuff anyone can pull off the Internet for nothing, and it is really hard to make stuff like that here. The scripts and the animations come close, but the bulk of the population often doesn't realize the amount of work involved in much of those things, a problem perpetuted by the huge amount of peers doing that same exact work and asking for nothing in return.

The problem seems to be that to the majority of residents, the content for sale is not worth the dollars that are asked, the solution seems to be to weed out the people who are not willing to pay(tantamount to taking away their stipends), to charge less for content, or to make content that is actualy worth the dollar prices people are asking. The challenge is on the sellers to make things that are worth the prices they ask, like the Internet industry in the 90's it is going to be hard for people to learn how to distinguish a sustainable business model from a hollow buzz generator.

Exactly Ng ! Or the flipside of this suggestion:

Create a purely IN GAME currency - prim coins if you like, that CANNOT be exchanged outside SL for any other currency, for those residents for whom SL is purely a GAME and/or simulation, trading, buying and selling included. The stipend would also be paid in this currency to satisfy those with a sense of entitlement, for they surely have no entitlement to the products of those creators who would prefer RL$ for them. Everyone's happy !

This isn't possible. If people are prepared to pay US$ for it, it will be sold for US$.

I pay my premium fees for Linden Dollars thank you. Shove any other currency where only a hardware-lit prim shines. As for a sense of entitlement..I PAID FOR MY STIPEND.

Did you read the modest poposal link I gave you(or even a sumary of it)? I think if you do you might have a good laugh about the(pointless) exchange we just had here.

I have no aversion to paying real money for intangible items, we do it all the time when we go to the music store, rent a movie, visit a museum, and what have you. We pay real money for these things that are not commodities that you touch, and do not cost the producers (relatively)anything in raw materials, the production costs happen only once and after that they can be replicated infinitely just like what happens in SL.

The problem is, the stuff has to be worth paying for or nobody will buy it! Different people have differeing ideas over what is worth paying for, which what keeps SL interesting. I like to buy things that have an obvious amount of creativity and effort in them. I find that anyone can come up with a decent av shape or eye color given enough time, but the stuff worth paying for is the stuff that stands out, and I feel that SL has lately become more of the same gimmicks sold to us over and over, which is causing this lack of dollars flowing into the lindex. I mean, how many thongs and collars and tiaras can people possibly want?

I think the development is just immature right now and isnt worth that much. I would like to see more contxt in which these things we buy can be put into, rather than going to the mall and buying a skin, how about crafting a world in which people will find it enjoyable to wear said skin, and then sell it there? The sex clubs kinda do this with their escorts and penises and skins sold right there in the clubs, but I think it could be expanded into more than just sex so that people are more convinced that they can get some enjoyment out of the things that they buy.

First of to stabilize the Linden LL should make it a bannable offense to engage in third party sales of L's. In other words you wanna cash out you cash out at a preset FIXED price to LL. say 300 per USD, then if you want to buy L's you buy from Linden only at a fixed markup, example 10%. This would stabilise the economy WITHOUT drastic measures such as removing dwell/traffic bonuses and stipends since everything is at a fixed rate. It also has the aded advantage of Linden being able to generate more capitol for itself. Plus the ppl who do use a cashout of L's to cover tier would ahve a fixed rate to depend and plan with. Of course this will draw much flaming as the money mongers would no longer be able to speculate and try controlling the market.

As far as attracting more basics to become premium..easy one..raise prim building limitations on the land to a reasonable level. Everyone knows that for the avg newb on thier budget it is almost impossible to put in a nicely decorated. furnished home when a 512 only allows 117 prims. I'd say at least double it for one..for two also set a cieling on land value markups. A reasonable profit would be say 50% over what you'd paid for it. A lot of what keeps ppl from buying land and going premium is NOT the tier fee. It's the huge 1-2000% markups ppl are charging on land over auction price. In other words lower land prices, more basics can save enough L's to afford said land and buy it thereby becoming premiums on purchase. It would also help if Linden would make it part of the ToS that anyone employing anyone in any capacity in SL had to pay them a minimum wage or commision and prohibit employers from taking ANY precentage of the employee tips. oh and for those saying that dbling the prim limits on land canot be done, let's jsut say if you think that you got a lot to learn about building in 3D...especially since most ppl with elaborate builds buy a parcel here and a parcel there in one sim then concentrate those prims on one parcel. The effect would be identical lag wise of just raising the prim limits to that level in the first place.