Economy Announcement: Removal of Traffic Incentives

(mutters distractedly updating spreadsheet.. "no more DI right got that months ago.. no more dwell kk deleting that line now.." looks up brightly.. "Next!?"

Sheesh I've been here six months and SL's been "ruined by change" five times that I can recall. (looks around worriedly.. sees SL still here.. relaxes..)

I admit I like to make money here not just spend it (those who know me nod and say "yeah!", howEVer I know many content developers and sponsors invest for the love of the game and to create cool stuff you can't create anywhere else on the planet. Heck me too except I can only make bracelets so far (sold seven yesterday woot!). And my business practice to me is a creation (I HATE being told I am a "good administrator" btw.. it's like being told you have "nice stout ankles".. designing and running a successful business in SL is an aesthetic creation every bit as satisfying as a good dress.. well.. almost..)

But content creator or sponsor or buyer, you've GOT to admit the economic situation (it's more than a simulation) in SL is COOL. Tying it to real money was BRILliant. People create and people consume and the "free vs. fee" economies are toGEther balancing media.

All I know is as long as we all (Linden Lab too!) can creatively express ourselves here and cover our expenses or justify our investments with satisfaction returned, than Second Life and the community shall continue to flourish.

Thank you Phillip this is a long time coming.

kudos

Crucial

"This means that stipends, traffic incentives, money given to new Residents and other forms of entitlements will be steadily reduced. This will happen carefully, and over time, all in an effort to preserve the value of the Linden Dollar – making it a constant, reliable currency in Second Life." quoted from the announcement...

MY REPLY:
ENTITLEMENTS: fancy name for something Liden promised me when i signed up for a premium account and started buying this spendy land and making spendy land payments (tier). Give me one good reason i should keep all this land, provide entertainment for all these "free" accounts, and keep em coming on in to pad YOUR pocket, not mine.
You say its to bring the Linden economy back in order, well it was just fine when i came in SL, the slide seem to come when Liden got the monopoly on the Linden Exchange for real currency, and GOM and others bowed out. Nice try on that excuse.
Traffic and Dwell, was the only thing that land owners received in fair exchange for providing entertainment to the masses...i see no further incentive to own more than a 512 and or have a "free" account..i tell ya Phillip, your shooting yourself in the foot, i say if it ain't broke and your making millions..why even do this? If your concerned about camping chairs, take out the reason for ppl to hang on properties for hours, and just make traffic each time someone sets foot on a parcel, instead of how long they stay or how many other places their av goes that day. This would encourage more travel by avs, and more exchange of $ everywhere..not to mention the need would instantly vanish for the reason to have camping chairs, and the entertainment aspect of SL would vastly improve.
I don't know who's idea this was to take out all incentives..but i feel like you falsely got me in the enterprise area of SL, land owning and tier paying. I just bet your not going to lower tier, in any way shape or form are you ?? Its just bad business to treat your best customers this way...wishing you the best Phill, but in my lifetime I've seen greed take down more successful businesses than anything else.

----- in conclusion, Mart and i do well in our little enterprise, but not nearly well enough to cover more than a 3rd of our land payments..fyi, this really fries me to think that the only excuse that LL has is that were making tooooo much money, and they don't feel the need to provide what they promised in the 1st place.

Since I can't post any replies or opinions to all the Linden "economy" problem solving..... great moves to the Lindens.......ya give us "updates" that bring more problems than the last one. now we can't tp out to anywhere and log in problems for two of the many things happening to this "WORLD"

It seems that once again the wonderful world of the Lindens and the players about to get the raw end of the deal ONCE AGAIN. Sooooo with the land dwell being reduced/gone and the stipeneds as well, does that mean our land tiers are going to be reduced as well? I see the long term effect of all this is heading SL straight to the same level that There.com is IMO. No money=No activity in game. This goes back to similar replies I have made in forums. Explain to me WHY anyone would want to have an event when they do not get any dwell for ppl being there. WHY would a club want to keep BUYING linden to put towards event prized or moneyballs etc. when they are not getting anything in return? All these changes are doing is FORCING players to strictly buy lindens. Back to my argument... NOT EVERYONE CAN AFFORD TO BUY LINDEN FROM THEIR POCKETBOOKS. And what about some ppl that are not in the us... I personally know of one person that is charged 20USD each time they purchase Lindens since they are in Austraila and some screwed up thing... Don't ask me all the details I just know the basics of the problem.

So now I have TWO fully paid premimum accounts that are going to be ROBBED of the stippend they make each week(eventually) PLUS pay a land tier fee for my land and what do we get in return? NOT A DARN THING! This entire situation is so damn depressing, is all we can do is sit and take this crap of an "explination" for things.

ohhhh ONCE AGAIN SL IS DOWN AND RESTRICTED TO EMPLOYEES ONLY.... HOW MANY MORE TIMES IS THIS GOING TO HAPPEN? AFTER ALL WE PAY OUR ACCOUNTS FOR THIS SERVICE, AT LEAST THEY CAN GET IT UP AND GOING AND WORKING PROPERLY FOR US?

Seems that the "economy" will not last if things continue as things are. I already know of some ppl that are talking about letting their "islands" go because of everything. Hence... Lindens are going to be out some RLmoney. There.com II?

All I have to say is, Lindens wake the heck up because you WILL loose players and not just the little players.You're reducing everything else why not our land tier fees? Soooo, When can I expect my land tier fees to be reduced with the lack of in world money being reduced?

I view it as a way to market more money out of us, before you could get a little Linden$ and some land which costed real money to manage. Now owning land will be a seperate fee, managing it will be seperate and shopping will be seperate. That all adds up to where, there will be no land for people to live on and such. "If it ain't broke, don't fix it."

Am I right in assuming that the money balls, free slots, starter amounts in all the *ingo games, prize money, camping chairs, dance pads, etc. that are offered at events is made through dwell/traffic payments? Is it also correct that a lot of this money used to come from event sponsoring from $L?

Yes the end to camping chairs/dance pads is a good thing. BUT where will event hosts get prize money? without prize money what incentive will people have to go to events? though without dwell/traffic payments what incentive will land owners have to host events, why would someone buy $L just to give it away at an event? Sure it will be great for the "economy" but SL is going to become a very boring place soon with no events.

Honestly this will not kill Camping chairs. Those place that have them pay way more for them than traffic bonus ever was. Using them they will still be on top of popular. Nope they will keep right on using them.

A lot of the premise for business is going away and this includes the "sex" industry! Why would anyone want to put out sex poses for the unwashed masses to use for no gain? You are going to see a lot "motels" and cover charges at clubs. It makes no business sense to let the in for free. Also unlike real life they do not buy drinks and snacks.

All of you stuckup designers better get the ideal that a lot of your source of revenue is GONE. These players are not going to give hard cash to buy your products when free stuff is available. For now the L$50 for basic members remains thought that buys a lot *giggle*.

I am not in the bit concerned, for me Second Life is a hobby and a game and nothing more. I lose no sleep worying about the fate of this game.

Did I miss the part that said they were removing the stippend as well? I don't recall reading that anywhere.

Now that we know that 47.6 mio L$ was added in March through the source I am curious about how many L$ has been remove again. Any chance we can be told some numbers about the money sinks?

Naturally enough, I also expect that the change towards removing this source of "welfare" also takes place after the new group system is put into place.

Under the current system, all advertising that is group-based (ie. listing places in Find and similar advertising services) comes directly from the "group account". This means that rentals and malls, which are usually set to group land for obvious reasons, pay that advertising from the "group account" — there is no other way to do it.

The only source of "income" for the "group account" is payments from traffic. So, no L$ from traffic means no way to pay for Linden advertising.

I'm not being original here; this is straight from the explanations given by someone whose voice was sadly removed from the forums a long while ago, but it has been echoed and voiced by many others who currently use the "group account" as the only allowed way to advertise their goods and services on group-owned land.

I'm expecting that Linden Lab will address this issue thoroughly before the L$ payment from traffic is reduced or removed; at the very least, befor May 15th, there should be an easy and accountable way for having some officers or the founder to "pay" to the group account to continue to finance the advertising.

Let's hope this has not been overseen!

I got it! BRING BACK THE TELEHUBS!! More Billboards!! People in chicken outifts handing out free t-shirts! Now THAT'S advertisement!



Did you notice LSL now has statistical functions? Coincidence? I think not!

That would indeed be interesting to find out. Hopefully it'll be in those promised statistics.

Since you're here, though... out of curiosity how will this affect AnsheChung.com, if at all? If you don't mind saying. I imagine by virtue of Dreamland, property for sale and whatnot that you got a fairly hefty chunk of dwell every day. Is this good, bad, or trivial for your business?

I'm curious about other Landlords also. Will any of them have to raise their rental rates to compensate in any way?

This is probably a good decision, but I still wonder what incentive (other than ego, say) anyone has to create anything beyond something for their personal enjoyment in second life.

I'd really like to hear what incentive there is to develop something that can be enjoyed by the average resident, as opposed to limited-membership groups that will gather on private islands or in private clubs. In other worlds, why should I donate content, and pay for the priviledge of donating content, to Linden Labs?

I'm really afraid of constantly bumping into red tape that won't let me pass until I pay for who knows what.

I guess I'll just keep doing what I'm doing as long as I break even.

Lindenomics: Whither Stipends?

Entitlements have been a facet of the Second Life economy since its inception. Initially, there were Stipends and Reputation Bonuses; today, we have Grants and Traffic (or Dwell) Awards. Only occasionally has the logic of entitlements been examined – and the usual question is, “where's mine?”

There are plenty of sound reasons for retaining entitlements in Second Life. New Residents are arriving at an unprecedented rate - our population is increasing by about 15% per month - and new Residents need to have some money in their pockets. Further, the creative efforts of Second Life Residents are causing the quality of goods and services, along with the number of transactions in a given time period, to rapidly increase – meaning that Residents are increasingly interested in purchasing more.

Based on these growth factors, Linden Lab must actively increase the money supply - basically print new money and somehow get it into circulation. If we didn't print new money, the existing money would become scarce, making Linden Dollars increasingly expensive in US dollars (see How It Works).

However, if printing money sounds like a bad idea – that's because it can be! Long the last economic refuge of African dictators, printing more money than the world needs can be devastating. In an economy as hot as that in Second Life, infusions of new money balance the rapid growth of the economy and keep the currency exchange rates fairly stable. But, as the economy begins to slow (Second Life's economy will cool down; if it continued at this rate it would be the largest in the world in only a couple years!) Linden Lab will reduce the amount of money that we put into the economy to keep the Linden Dollar from becoming worth too little!

This means that stipends, traffic incentives, money given to new Residents and other forms of entitlements will be steadily reduced. This will happen carefully, and over time, all in an effort to preserve the value of the Linden Dollar – making it a constant, reliable currency in Second Life.

** this was taken from the LL editoral page, and invites reply back to the editor, i am hoping that each and everyone of you will !

They seem to know better (currently) than to reduce stipends, at least on the premium accounts that pay for their stipends. If they do, they will likely see less lindens bought as a result of less people interested, premium players dropping to basic or leaving entirely, and less premium accounts being made.

To do so is to invite disaster.

That info is now available to anyone with research and math skills.

At the start of march the money supply was about L$565mil(L$532.9m in accounts and L$27mil on lindex).

The economy adds 7% per month so 565*.07=L$39.55mil added in march.

I don't know where you got 47.6 mil I get ~$L52.29mil added.
Source
37.7/.72=52.36
4.7/.09=52.22

That makes sinks about 52.29-39.55=$L12.74milL removed with sinks in march.

If all those percentages hold, removal of dwell will reduce the growth of the economy by 1% from 7% to 6% per month.

Finally. This has been a long time coming. Thanks Phillip for realizing the mistake made so long ago. Dwell was supposed to encourage compelling content, but it never actually has.

Will entertainment disappear? Cookie cutter clubs with the same music, animations, and events isn't what entertainment is. Entertainment is having a laugh with your friends. That didn't disappear during the depression, don't see why it would go away in SL also. People will stop doing it for the money and might start because its... well.. entertainment.

I do not know one single content creator that would refuse to sponsor an entertainment that they'd be interested in. You have an idea for something cool? Pitch it around, someone will bite. Because of this fact alone, entertainment can and SHOULD be sponsered by residents and not LL. Enough money is being passed around now that this is completly viable. If it is too much work for you to find someone that would donate, either your idea blows or you are lazy and do not deserve my hard earned L$.

Sex clubs will stay around. As I imagine that the high percentage of the "fees" go to the club, which is probably a lot more then the crap dwell payments.

Casinos will stick around. Why? Same reason why Vegas casinos' rooms are cheap. The house Always wins.

"oh no the events list will be empty." They sung this when the event support was taken away. Yet, people still hold classes and there are the random events lost in the stream of **WIN L$XXX***Nekid***Ingo. People will still put on entertainments. They will either 1. charge for them. 2. Get sponsorship. or 3. Have other means of making cash.

Saddly, they are only taking away part of the use of camping chairs. I believe that they will still be around until the find menu no longer calculates zombies. Stores and malls will still have them to inflate their sales/rentals.

For the 2 people (random guess) who did make compelling content and are getting shafted by this, I am sorry. Thank LL for letting this go on for so long, then blame the people who gamed it to get rich quick. Then go out and find a couple of content creators that have the same idea of entertainment and strike a deal.

I've only read a few posts, but I did read Philip's post. Here's my take on the whole issue.. Just as when they removed the ratings incentive, there will be a turnaround. Things will change.. They always do. I personally don't like the idea of removing the developer incentives, I do think they still play a part in those "cool" sims out there.

Unfortunately I think we will see a lot of those sims close down as the cash they got from dwell was what was offseting the cost of the sims, even if it was just a little bit. The thing I don't think Phillip realises is that so long as there is any way to make money, people will always try to game the system. It's human nature. Maybe this is his way of dropping his risk.

I had a friend once tell me something, and I think it rings true here. It was his philosophy on running a business. He said, "I pick bright minds, overpay them, and try to stay the hell out of thier way." There's a lot of talent in SL, but without incentives I think they will fade.

We don't get much in the way of an "allowance" which means there will only be one way left to make money. Building in some shape or another. The problem is I think that there are more consumers than builders, which is what makes the system as it stands work. If everyone floods the market with crap which is good because it forces the prices down, but bad because there is little if any chance for someone to make a "living" to be able to spend that money on other's products.

I honestly don't know how this will turn out, but I'll stick it out to see. I'm sure things will come back, but there will be some sad losses as well.

Lewis & Nay-sayers-

Please consider it from this perspective:

Camping chairs were effective at grabbing a much of the dwell income pool, depriving huge amounts of it from those for whom it was originally intended.

Banning camping chairs, or changing the dwell income calculations won't fix anything, it merely redefines the challenge for the exploiters, who will certainly find new ways to exploit the changes.

Rewards MUST come from us... not from Linden Labs... or people will continue do absurd things that Linden Labs rewards.

When the incentive rewards come directly from the people of SecondLife, then the desire to exploit will be focused on creating competitive and creative content that appeals TO US... not some blind algorithm designed by Linden Labs.

Isn't this contradictory? No dwell bonus to get anymore after June 13th.

I can't agree more. All the Lindens are doing are making you earn your cash rather than handing it to you for having people around. If you are depending on this for your way of life, then there is a problem with your business model to begin with. Make something people want (service or item) and people will keep you in lindens. If not, you go belly up. That is the free market. If everyone was meant to survive and prosper with no work or effort this game would be called Welfarm.

Jopsy and Yay-sayers look at it from this way:

Gardens and other 'passive' environs offering a relaxing time with nice scenery will find themselves needing that much more to operate with, the little bit that dwell gave gone. Many of these environs will fade away as the cost of running tramples the joy in giving others a pleasant place to remain. I myslf will be checking on a few friends tomorrow, hopefully to help sponsor them through the sales from my shop.. I need to look at income levels and other factors.

Its a shame these areas, which benefit anyone who comes by at no cost to them, will fade on SL.

Heh, I was thinking the same thing. Maybe not to a great degree, but there should be a noticeable difference.

What do you get? You get a place to hang out with (possibly) interesting people. A outlet for creativity, be it design, building, animating, ect. Then you GET to sell it to other residents in which you eventually will be able to pay tier. I have never once heard anyone from LL say "hey come join SL, do nothing, and we'll pay you for it."

You can't pay tier? Then sell your land. No where does it state you NEED to have land. All LL does is give you the OPTION of having land. You decide on how much you want to have then pay LL for the server space. Most of us are smart enough to figure how much we can afford.

BTW stipends aren't going away. It's just the dwell thing at current. It might be the next thing that is reduced, but I doubt that stipends will fully go away anytime soon.

Depression for not getting everything handed on a silver platter? Boo Hoo. If you don't like what you get for the money that you pay, then leave. Please.