GOM Exchange Rate fell ~5% Inter-day

Gom has fallen from its recent high of USD $4.36 per L$1,000 to as low as USD $4.00 today.

Volume has been massive.

Is this fall brought on by Philips announcement that he would like to see stability at the USD $4.00 per L$1,000? Who knows for sure.

But it sure makes the game fun

It was interesting to watch. In a very short span of time, almost all open buy orders over $4.00 were filled.

To me, it doesn't seem like a reaction to Phillip's comments or else it would have happened over a broader time frame and not within the span of an hour days later.

Definitely is making trading interesting!

Ah, I see.. so you're more under the impression it was a bigwig cashing in some excess L$?

Wonder if Anshe Chung, Inc. is available to comment?

I wouldn't put a lot of weight into this movement, other than to conclude that it is a bit wider than the average swing on GOM.

As one who trades on GOM all the time, I've noticed that there is a very consistent weekly cycle in the price. On the weekends, the price tends to trend upwards (presumably because more people are in-world, and want L$ to buy land and/or content), and midweek the price tends to fall as a whole bunch of sellers all hit the market at once (presumably because content producers get a large influx of L$ on stipend day), and want to cash out.

My hunch is that this is nothing more than an above average number of L$ all hitting the market simultaneously, and the sellers are jumping over each other trying to get their sell orders in front.

- Ace

I don't think that Philip's statement is what is influencing it, because it's not a really new statement and has been said before.

I see it right now at $4.16, falling from $4.25 where it has been most of the time most days, because the high it gets to like a $4.36 never lasts long IMHO.

I don't see the "as low as $4.00" at all today, i.e. a sale actually at that moment (though it is technically in the chart I see) and I've been flipping to it quite a bit today. I've sold everything at $4.16-$4.20 today.

I think there could be some other factors at play:

1. Payday. On Wednesdays, after Tuesdays, there is always a big cashout at the GOM and the rates go down, Wednesday is a good day to buy and a bad day to sell for those who want to be serious students of the GOM lol. I'm also thinking that lots of people got back from various spring breaks around Easter and Passover, which came later this year, and they found $1000 in their boxes instead of $500 and cashed out more.

2. Ansheland. Two things are going on with Anshe land, no three. First, Ansheland has 4096 m2 for only $19999 which significantly undercuts the price of say, prime mature waterfront on the grid which can go for $30000 or more so that makes mainland sims go flatter. Yet, second, Anshe can't advertise her Ansheland as she likes due to the Lindens and some older players getting worried about abuse of the land sales list to put up what they view as land rentals/private estate parcel sales that don't work the same way as on the grid. That makes Anshe's huge investment of $13000 in the game for a dozen or so sims seem like a really risky thing and gives some IW and auction buyers pause.

Anshe, either due to consolidation, or due to her loss of sales potential with the ads crippling, is slashing prices of her rentals at telehubs and selling off telehub land on the grid (maybe this is all just part of Anshe's planned exodus to the private sims off the main grid but I think she will keep a significant presence on the main grid). That creates lack of confidence in both builders and merchants at some telehubs, but it also creates an opportunity for another layer and level of players to rush in to take advantage of this opening and diversification of the economy. That will then push things like the GOM back up.


3. I can only tell you my own reasons for halting auction purchases and halting construction and paying architects and incurring other expenses that I'd pay for in part by buying on the GOM: Andrew Linden's announcement in the forums (a really uncharacteristic intervention into a player debate on the forums) that he does not believe the tekkie wiki issue is even an issue, and he thinks that the game is growing "too fast" and that if there are putative groups that would throttle its growth, that's OK, because it needs to be a) throttled and b) funnelled to be run only by the techno-geeks. This is disturbing. It means LL wittingly or unwittingly wants to continue to play mainly to technogeeks and their content-baron side of the food chain, and not shore up landowners' rights and encourage landowning (Andrew's announcement, coupled with Robin's about the events and the ads).

4. Even though LL is taking some backsteps and putting on more events, trying to do a spin that there's a "workaround" on the advertising issues, etc. etc. I still see it as not just a risky investment environment, but an environment where there might be active hostility, not only from some small but influential player base that hates landowners and land dealers, but the company itself, which is ambivalent to say the least.

Well, I'm not a serious student of the GOM, lol. Ask everyone else especially those who are day traders of the GOM currency fluctuations themselves.

I'm thinking that every other time the GOM does something, it will move around, go up and down, do stuff, but then right itself. Since I have been in the game in September 2004, I"ve seen it all and all climb steadily upward and increase in value as new player membership increases, which seems like a good thing. It has taken real nose dives like when the Lindens throw out more sims and devalue old land that way. Or takes real sharp climbs up when things happen like the Lindens dump all the event support grants -- at least the easy-to-get ones -- and slash the ratings stipends, forcing lots of people to go buy on the GOM.

Many people have been really scared of buying on the GOM. They've been scared even of buying land IW, even first-land. One of the things that makes them scared is the whole uglification/free expression/W-Hat kind of thing whacking them and the exaggerated fears of all that. It's made some people stampede into either buying private islands sooner rather than later, renting what can be a more secure view in some areas, or going into the safety of gated communities like Ansheland and Nexusland. When they do that, they tend to go to the GOM more to buy money to buy avatar and home decoration stuff. The ugly antics and griefing make for devaluation and player loss in some areas, but only increase it in others.

There could also be some other funny reason why the GOM is doing something...maybe those 2 guys who run it also went on spring break or had kids home on spring break and couldn't do their PayPal cashouts as quickly or do CS troubleshoots lol? But in fact I've found somebody at the switch even at what must be 1:00 a.m. doing PayPal cash out orders so they must be coping : )

I've also seen something really funny happen lately. Does LL or somebody...some benevolent force..Phil's alt...something...try to prop up the GOM? Recently I put some shares on at $4.25 even when there were much lower prices there that I should have been competing with, just to leave them on over night, you never know. But the packet was bought quickly. Thinking, well that's just somebody who didn't get how it works or something. I put the same amount of packet and priced again at $4.25, and put another one at $4.19 at the same time. I watched as both packets sat there for about 10 minutes, clearly visible...and again, somebody bought the $4.25 packet and left the $4.19 behind.

?????

In my experience, bigwig cashouts might seem to "destabilize" the GOM for a day or even a week but they don't really cause it to plummet because the game is complex enough that there is always a lot more going on.

Like you'll read in the Herald about some giant club sellout and see a huge packet of LL $100000 going on there, maybe set really cheap. And it might get bought up cheap and rock prices, because who knows, maybe part of the deal is that somebody buys somebody's big packet on the GOM for a price fixed in the deal, not set by the GOM itself. That happens.

But then it rights itself in a short time.

Some pundits are predicting a land market crash on the New Continent especially because prices have been inflated there. And they're thinking the GOM will tank with it. But just when you get a bit of receive wisdom like that going, it doesn't do what you thought.

That's what I hate is not KNOWING. Though I develop a theory, I'm not so full of myself to assume it is correct without being able to prove it. Thanks for the insight, Ace.

The reason I assume(d) it was one person was the daily volume jumped in about a 30min time frame.

Hmmm... wonder how many people are freaking seeing the last trade at $1.60. Damn, wish I picked that block up.

Prof, I always enjoy reading your posts, because contrary to what is regularly posted on these boards, they always seem to have a point, support, and conclusion.

Thats not to say that I agree with them.

To understand why GOM is falling, one must understand why it rose. And I'm not quite sure why it got to USD $4.36 per L$1,000.

Can anyone shed some light on why it might have risen (outside the introduction of the new continent). Is it expansion of the player base? Inside players spending more? Better content being sold?

Honestly, I have no idea. But I'd love to hear what our citizentry thinks.

I think you may have mis-read Andrew's post. He did not say that it was growing too fast nor did he say it would be OK to have putative groups (putative to what, I might ask) force a throttle on growth.

For clarification and ease of reading, I am quoting Andrew's post, which can be found on page 11 of this thread:


He mentions that the growth rate is good and healthy and sustainable, even though it provides a challenge for them. He does say that *IF* the rate were to severely speed up, they would have to throttle new accounts. By 'they' he meant LL, not 'puntative groups'.

Prokofy, if you were referring to another post by Andrew where he indeed said the things you mention, can you provide a link for it so I can go read it? Thanks in advance!

This is totally bizarre!!!!!

The Linden price just went back up to $4.20 from $1.60!

What could cause this wild gyration in such a short period of time? I technical glitch perhaps?

Philo (bewildered)

Also, the dip to $1.60 is not shown in the daily chart!

Must have been a glitch.

The price you see is the last trade. If you look at the lil history graph, you'll see a dot that shows a trade did occur.

Yea, I went back and looked at that a few minutes ago. I wonder though why the graph dosn't show the dip? It did when the big drop occured. Strange.

There's a word in statistics that's used to describe pieces of eratic data, like a sale for $1.60 in a market where the average is $4-something. Alas, I didn't try very hard to remember all the stuff I learned in college statistics. But statistictians learn how to recognize such things and will generaly throw them out of their calculations if the situation warents.

We're currently testing a new version of our market page which will make it impossible to fill orders far outside the "best price". Once that hits the live site, blips like that will be a thing of the past.

Whew, we can all take breath now!

lol anyone notice that by the time this was posted all prices had gone back up to average? LOL I read 4.00 and instantly ran over only to find 4.19 for a select few, and 4.20 and up for the rest... hehehe someone took advantage

The term you are searching for is outlier, and yes, they do strongly affect the mean. For example, given 5 sales at {4, 4, 4, 4, 1} the mean is 3.4 which is not quite "representative" of the selling price. The median (4) is much more robust in the face of outliers.

Just in case you were looking for a pedant.

And the answer is...


...because the auction appears to have had more than its usual number of land parcels for sale in Linden dollars instead of US dollars in the New Continent. And to bid on the auction in Linden dollars, you are required to have Linden dollars inside your account, and that means you have to buy them and get them into the account before you bid.

So a week's worth of trading with more than usual numbers of Linden-dollar land, at higher prices (New Continent land bubble) is *one* reason.

Other reasons:

1. New players who want to skip steps and just buy larger pieces of land in world right away, they may have friends in the game to help them do this, and they also want to buy skins for $4000 or vehicles for $5000.

2. The presence of the video streaming in the game and the need for video players of the $999 variety or higher to get the most content, the free ones don't have the content choice.

3. Spring break for those where they didn't leave, but stayed home, and loaded up on Lindens to buy stuff inworld.

4. Events calender bork forces people off Tringo and off games, and sends them out in-world to do avatar decoration, home decoration, coupling and nesting, and that always means higher spending rates.

Um, thanks in advance *yourself* Juro, hon, for not quoting the whole thing right -- go back and quote the whole thing! lol

Um, no, Juro, that's *exactly* the quote of Andrew's we need to look at and my interpretation is *exactly* the right one and I imagine Andrew and other Lindens are now taking a second look at how what they say can be viewed -- instinctively, by people with money to spend on their game -- and tightening up what they say.

This evening I asked Cory Linden in the technical Town Hall whether or not the Lindens felt the game was growing too fast, and whether or not a way to slow that down would be longer lines at log-ins. His reply was only half an answer. He ducked the part about whether the game grows too fast. He replied that the log-in problems were a bug, not a feature. I know that. But I also know that when games have too much attention and too many people coming, they have to adjust log-in lines and make them queue up, and they do that. We've seen that. It maybe is a "bug" in SL but it can also become a policy, tacit or not, to just filter out the undesirable influx.

I don't think I've put too paranoic a spin on Andrew *at all*. In fact I think he's shown an *examplary* verson of the very thing I call tekkie wiki himself.

First of all, he thinks of the concepts of games "growing too fast". This isn't one that anyone but technicians would be obsessed with. They think of how it puts a strain on themselvse and their machines. Others think "buy more machines, hire more people". Tekkies think "Oh no, they're going to outsource my job or send it overseas if they do that, we can't have more people." Cory also talked today about how they are hiring lots more people. Well, lots more people need lots more machines. The point is, you can look at the problem of an influx of customers as something you "need" to "choke off" or you can scramble to keep up. I'm hoping that LL will do the latter, and the those who tell you condescendingly that games can't "grow too fast" will have a chance to see that in fact they can when there is a "will there's a way" approach.

Would we have ever gotten Bell Telephone if Alexander Graham Bell had been allowed to keep saying "Not yet, I'm not ready, hang on here...let me get the next patch ready."

Andrew says it is "still not ready". But the CEO never says "I want a million but it is still not ready". Now it is the nature of the beast in companies that out in the front office, CEO's are bragging and saying "Let a million come in the door" whereas in the back room the technicians are moaning "oh, but we're still not ready".

Still not ready...if you have perfection always as your goal...perfecting being the enemy of the good...and if you worry not about growing the game, having more customers and making them comfortable, but worry about things like "how can I have this or that esotertic scripting thing fixed" or "how can I have Havoc 2 for shooter games and kewl vehicles." Honestly, if they polled the entire population of SL effectively, with real focus groups, weighting for time zones, etc. I have a hunch they'd find it's more of a girl's game than a boy's game, i.e more about playing house than about playing war or playing ride. Just a hunch.

He said IF there was growth THEN it would be a good thing if such "putative group" existed because then it could throttle growth.

Now I find that utterly unconscionable even as a putative. It's a slam. It says "We are prepared to entertain such a hypothetical and allow it to come into existence if we have to."

Here's the entire Andrew quote *in context* that way by being quoted *in its entirety*. What you did was selectivelyi quote *some of it* then summarize *in your own words* what you wanted to glide over, then slam me for putting a paranoic spin on it. But just read it as it is:




Here's what's to understand about this:

1. He utterly dismisses that there is even a concept of the over-geekification of SL although an entire group of people in the community just spent dozens of pages talking about it -- and have been for weeks -- everyone knowing what is meant.
2. He says there is no such group, but that's just his opinion. Some of us believe there is. Even blaze/his alt.
3. Look at the all imporant line that Hiro left out in his "citation":

So, even if there were some minority of residents that were "holding SL back" then I might not be inclined at the moment to ask them to let go.

This is just about the most chilling and nasty thing I've heard since I've been in SL. It immediately led to whoops and shouts of glee from all the people in the thread trying to trounce me, and all of them starting citing madly out of their favorite cartoons or anime or WTF (to the effect of "Joshua fit the battle of Jericho/and the walls came tumbling down" although they of course had *no clue* that all their Westernized regurgitated kewl anime or WTF is just reworkings of old Biblical stories or ancient myths LOL).

Andrew would "be inclined" would he, not to ask them to let go? Well, geez, not only am I inclined to ask them to let go, I'm not inclined to spend on his auction until he *does* ask them to let go.

Thanks Prokofy, but I did read his entire post 3x before I posted, thinking maybe I missed what you were quoting him on. I did not miss it, you mis-quoted him. That's why I asked if it was the same thread - maybe you were speaking of another one that I had not read. It wasn't a slam against you, it was a CLARIFICATION.

Nowhere in his post did he say, and I quote you:


So, I read your response, re-read his post and guess what? Still, he doesn't say that, what he does say is:

Then, he addresses the upcoming challenges facing LL with new subscribers:

He goes on to say:


Nowhere does he say he thinks its growing too fast - at least not the post I read from him. I read what was typed. What did you read?

Juro's too much of a gentleman to say this, but I'm not: We all love your demeanor, decorum, wisdom, judgement, persuasiveness, patience, impeccable logic, concision, self-evidence of your opinions, and your open mindedness. I apologize if this post ever gave you the impression that you lacked our collective, undying reverence.

I'm really really sorry, I apologize unreservedly. I offer a complete and utter retraction. The imputation was totally without basis in fact, and was in no way fair comment, and was motivated purely by malice, and I deeply regret any distress that my comments may have caused you, or your family, and I hereby undertake not to repeat any such slander at any time in the future.

Oh, dear, somebody who didn't put me on ignore? Huh? Well, I just want you to track this Hiro: see, they come in (and this is one of the regulars) and they blast off vituperative, coarse, idiotic, exaggerated personal attacks -- it's mot me who makes them, it is they, and they make them after they think I've said something "too contrarian" or offneding their sensibilities somewhere.

I'm not supercilious or rumour-mongering, I'm quoting what was said exactly, and I'm analyzing and elaborating on it. If you don't agree, well, don't, but dn't start trying to pillory me. Stick to the facts. Stick to your well-argued premises. These should include:

1. A discussion, bringing for the facts from other games or this one, about whether the game *can* grown, and whether growth has an upper limit at last at different time periods.
2. Anlysis as to whether *if* such an elitist group existed would it be a good idea to let it choke growth (and make no mistake about it Hiro, he had this group choking, not LL).
3. Analysis of whther chokeholds are needed at all to 1) prevent growth 2) burnish the stature of the said choking group.

No, I'm sorry, you were not - thus, my confusion and clarification. Elaborate you did, but you didn't 'quote what was said exactly'.