Easy Money$ How does dwell=profit?

I'm having a hard time understanding how some people appear to be able to be giving away over US$1,000 per day "Easy Money" and expect to make a profit. There's currently a few island owners that have 40 or more money chairs paying out about L$250 per hour, which would be L$240,000 per day or roughly US$1,000 if the chairs were fully utilised 24 hours per day. From what I can see they largely are. In addition they have other prizes and cash give-aways.

I expect they do this for dwell, but how much is the dwell and developer incentives really worth? Last month LL reported they paid out approx US$10k to 110 winners in the developer incentives, so these people may stand to gain at most 2 or 3 thousand dollars there. Then there's the daily dwell payout. I don't know how much this pays but I'd expect you'd be lucky to get more than L$5,000 in a single day.

So that would be say $L5k x 30 days = L$150k = US $600

Then they also have income from rentals at around L$35-40k (US$160) per month.

So nearest I can see is:

Outlay ($US): $30,000 - prizes
($US): 195 = Island Rental
-------
$30,195

Income : $ 3,000 - developer incentive
$ 600 - dwell
$ 160 - Shop Rentals
-------
$ 3,750

Profit/Loss -$26,445

So what am I missing? Surely noone is tossing US$25k per month into promoting an island for purely egotistical purposes?

I would dearly love to be enlightened, as I just dont understand this.

I think your numbers are off.

Most money chairs are like, $L5 per 10 minutes or something.

Someone like Anshe sinks $25,000 into SL a month.

At most I can see a several hundred dollar loss per month for even the most worthless of clubs.

It's still a loss, though.

Not everyone can be a successful businessman.

LF

ok well lets look at that $5 for 10 minutes is $30 per hour * 40 chairs * 24 hours is 28.8k per day * 30 days is 864k = $3500 US per month - they'd STILL be extremely lucky to make any form of profit even if they weren;t providing other cash/prizes on top of that - sure ok maybe not spending the kind of money that we were informed but still, if they are spending all this to make a loss --- why?

Im not talking about anshe who is buying and selling land more specifcally these islands that are in the top picks utilising FREE EASY money to keep people there. To make a LOSS, Why???

What am I missing?

ok well lets look at that $5 for 10 minutes is $30 per hour * 40 chairs * 24 hours is 28.8k per day * 30 days is 864k = $3500 US per month - they'd STILL be extremely lucky to make any form of profit even if they weren;t providing other cash/prizes on top of that - sure ok maybe not spending the kind of money that we were informed but still, if they are spending all this to make a loss --- why?

Im not talking about anshe who is buying & selling land more specifcally these islands that are in the top picks utilising FREE EASY money to keep people there. To make a LOSS, Why???

What am I missing?

Its simple really, LL hands out Cash Prizes in RL money to those in the top spots (top 25 I think, correct me if I'm wrong). On top of that it puts you really high up on the search results so people will more likely see your place and come to you figuring they'll be more likely to find what they're looking for at your place then those with a lower traffic rate. More traffic = more business. If you're renting out spots, people will be more likely to rent in your area if they see high traffic wich means more potential business for their vendors. People who are looking for store fronts will also be more likely to buy any land you have for sale nearby. On top of that it looks like a good place to meet folks because there is alot of people there.

Never underestimate three things:


1) The creative ability of people to 'game' any system, anywhere,

2) the depths of immorality that a human being is capable of, and

3) sheer, abject stupidity and foolishness.


Most people are basically good and reasonably intelligent.

This is why items 2 and 3 always come as such a shock for the uninitiate.



A good question to always ask is: who profits, and how?

- Desmond Shang

LL gave out $10,000 US divided amongst 110 people according to their most recent award announcement. So if you got $3,000 US from the monthly pay out it still does not offset your expenses. Yes you get rentals but not enough to offset what your having to outlay in giving out cash and prizes.

Well, I think you only get paid if you stand up. Maybe a lot of people are crashing?

You're also assuming 100% occupancy. I'd put that more at 50% occupancy (if that).

$5 for 10 minutes is $30 per hour * 40 chairs * 24 hours is 28.8k per day * 30 days is 864k = $3500 US per month

I agree though, I think camping is starting to become a bit of a game of chicken.

Dont forget content sales as well in those estimates. I'm sure that helps a little bit. I would be very interested myself in figuring out how exactly they manage to do it, or if they havent done the math. That very well could be why so many clubs open and close back down quickly.

I agree with blaze, I don't think the chairs run full occupancy, though it would be a good idea for a sim owner to plan for full occupancy when setting the payout rates.

Well, I don't think anyone on this forum is going to like my answer, but here it is;

On Chatelaine we have eight money chairs paying $3L/5minutes, costing us on average $2,000L a day. And yes, that's definitely a loss considering what Chatelaine is for us and our guests; a place to relax, socialize, and just have fun without being nickel'd and dimed to death.

Most of our attractions are free, along with our exhibits and such.

Why do we do it then? Two reasons mostly; for the dwell putting us higher in the FIND lists, and to promote the Rec Area as being a place to come to and enjoy.

But it's what's happening with them that has convinced us that the monetary loss is worth it. Through them we have met a lot of people that have become good friends. The chairs have also brought in new players who need help, guidance, or just a bit of extra earnings to further explore and enjoy what SL has to offer.

We've even had a young (SL life) couple from the next sim come over, use them to earn $100L or so and run over to Hoffman Designs and such working on furnishing their new house.

The stories are endless considering the short time we've had them, and we don't even advertise the fact that we have them.

So yes, the biggest reason, at least for us, is that some, like us, do consider it a game, where we just log in to play, socialize, and have a good time and put the real world behind us for a few hours a day or so.

There's nothing wrong with that, and if it interferes with some people's idea's of "proper business model" structure of SL, then so be it. We play SL as entertainment, and relaxion from real life, not a mirror image of it.

The ironic thing for me is, is that there are some who will sit in the chairs to use them to fulfil the "proper business model of SL" in trying to reach their goals of that next $1,000L to put on the LindeX or such to try to get that next $5US or so. But in talking with them, with all these mini-step goals, it does make me wonder if as much as they're gently chiding me on losing money playing a "game", if they're not actually playing a game themselves in their perpetual search for that next block of Linden money to put on the exchange...

Phase 1 - Install Camping chairs.
Phase 2 - ????
Phase 3 - Profit!



As you can see it is quite easy, just follow the plan.

Just to clear up a few things from my point of view. I can not speak for why others do it, Honestly I am baffled myself in doing the math most will loose HUGE. But, with this said. I have been reading for months the forum posts complaining about the ratings system and weekly stipend bonuses attached to them. LL as they often do listened to the whiners on this topic. I however didn't agree. I do trust that LL had a bigger reason behind this change, not sure at this point what but, never the less I think they had there reasons.

The weekly stipend is often awaited like an allowance only to be spent on in world content resulting in sales for, in many cases the same people whining about the stipend. Now sales are declining and Im waiting to see who the finger is pointed at this time. Hell, maybe me for having money chairs......LMAO. Befor you start complaining about the chairs, stop and think what the people receiving my hard earned L$ are doing with it. They maybe giving it to you for your land, clothing, shoes or whatever it is you earn with. I say bring back the weekly stipend.

After 1.7 came out and GREATLY reduced these funds I went out and bought camping chairs set them out and have proceeded to donate 100%+\- of my daily sales to them. Now clearly the monthly bonus will not even come close to covering my expenses. But, I have done ok in this game and decided to give a little back for the holidays. (feeling like Santa. BTW you are all welcome to come sit on my lap I have got the costume and all) *grinz* . Besides they have been great promotin for the winter festival, something I spent ALOT of time and effort building. I call this win win.


Now I do inforce a few rules:
No guns or other disturbing objects.
Not intended to seasond players with other incomes.
Be friendly and enjoy the movie.

I have only had to ban a few people for violating these simple rules. For the most part players seem to enjoy themselfs, meeting new friends learning a few SL tricks. Good positive results. I intend on keeping them up until I feel they are not getting my intended results.


Please excuse spelling and grammar, good thing I can add.

Camping chairs and rating bonuses are completely different issues. Too many $L being newly created without enough $L being destroyed will result in everybody's $L getting less and less valuable. Every single person in SL will eventually feel the negative side effects of this eventually including the poor.

Camping chairs do not create newly printed $L, therefore the issue people have with it is not the same issue. The problem people have with it is that some of the people that previously made money from bringing lots of people to their place without camping chairs will recieve less money. Unlike rating bonuses, this does not cause everyone in Second Life to gradually loose money, it only causes those with high amount of traffic on their land to loose money.

I can see why people are upset with competition that does nothing but set out chairs, but I don't really think it is that big of an issue. Many of the places that will lose out have money balls with chairs people can sit in, and the people sitting mindlessly playing Tringo are doing a similar thing. The main difference I see between this and Tringo is that everyone has a chance to make money no matter how good they are at Tringo. Money trees are another thing people use to draw traffic. I do not think this is that big of an issue like the rating bonus was. Many that are effected by this are using a similar tactic themselves, and in the end new players are able to find a quick way to make small amounts of $L.

Im glad were able to discuss this without people going off crazy, so hoping we can keep the discussion going this way.

I posed the question simply because I dont understand how the places that are giving these amounts of money can afford to do this as I dont see it coming from the rents and dwell bonuses. In my estimations they are running at a loss but maybe I was missing part of the picture. I did not add in for sales as quite a few dont have thier own merchandise that they sell.

blaze " Well, I think you only get paid if you stand up. Maybe a lot of people are crashing? You're also assuming 100% occupancy. I'd put that more at 50% occupancy (if that)."

You still get paid even if you crash its the same effect as standing up. I think you would be suprised at occupancy.

Blue I know has had many successful ventures here and its great that he is able to give back as I know even with the limited rentals he has it not even putting a dent it whats being put out. Charlton has stated for they are running at a loss but its a game for them and it gives them enjoyment.

I do think its sad that the only way people will do anything is if you pay them, over the last year I have read people complain about the lack of quality events & fun things to do. It seems though even when I have tried going to events they are not well attended or cancelled for lack of attendance.

The majority of chairs that I find (with the exception of a few) pay out only L$3 per 10 minutes, this reduces the cost of running them by quite a bit.

IceDragon's Playpen has a ton of money chairs/dance pads and the popular ones are all positioned near games, despite them paying out less (there is a block of L$4 per 10 minute dance-pads near the Blood 21 cards).
This would seem to indicate that most people who are using these chairs/pads are using them to help fund the games they are playing, such as Slingo, Tringo and anything else rhyming with dingo.

But as far as I can tell none of the money from these games goes back to the playpen, the full pot goes to the winner. So unless there are secret operatives who play the game and give their winnings back to the playpen then I don't think they can making back the money there.
Though there are a ton of shops in the middle, so I suppose the thinking may be that winners of these games come out with fresh money in their pockets, ready to spend!

I dunno, it's all quite complex but it must work to some level or it simply wouldn't be feasible to do.

I'm no expert, but here's a possible thought.

What if 'they' implement point-to-point teleporting so that we don't have to use telehubs any more? Then advertisers would no longer be able to put up signs and obstacles in our path. They'd no longer be able to make us fly past their malls. Advertisers would need to buy space IN the popular destinations instead of on the route between hub and destination.

Popular clubs, stores, and such could sell space in their club instead of having advertisers buy land on the route between the telehub and the club. The clubs with the highest traffic could command the highest prices for advertising space. If this point-to-point teleport were going to implemented soon-ish, like say next month, then it would be very important to compete for dwell right now... maybe important enough to pay people to sit on your land.

And now, good reader... go to the announcements forum to see if point-to-point is likely in the near future.

Ive spoken with the owner of IceDragons, otherwise I wouldnt chime in, but he claims that more often than not he DOES NOT break even. Generally thats one of the more full sims also, so that says alot about the "content" based model of income. "Content" here being Camp Chairs, Games, and Shopping.