Hi all,
I just notice the new continent has a total of 100 sims (or even more). If the Land Barons cannot sell their newly purchased sims quickly, cash will be limited which means the rest of the new continent will be auctioned relatively cheaply. Hopefully we can see price <10/sqm very soon. Thanks LL!!
Zen
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Mainland (the new continent) price is going to be adjusted violently!! |
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Zenith Zhaoying
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02-23-2007 01:06
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Reece Gunawan
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Join date: 21 Dec 2006
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02-23-2007 01:18
Not necessarily. Just because the new continent shows sims, it does not mean LL will release them all at once. If they release that over 1 week for example, prices will remain largely unaffected.
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Evil Land Baron
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Zenith Zhaoying
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02-23-2007 01:21
i agree with you reece. Control release of sims might make it a soft landing for land price
 However, are there more residents going to take up the excess supply, especailly at this price? I doubt it.Unless there is an influx of guallible newcomers to buy up those lands. Zen |
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ninjafoo Ng
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Join date: 11 Feb 2006
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02-23-2007 01:25
Prices will remain constant anyway - nobody is going to dump land cheap just to be rid of it
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Stephen Zenith
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02-23-2007 01:27
They've been releasing at 8 a day on average since the Black Thursday release of 40 sims. Of the sims I bought yesterday, I've sold all of the land I put up for sale so far - and at a higher ratio of private buyers to other resellers than I saw before the mini-crash. So somebody seems to be buying.
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Reece Gunawan
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Join date: 21 Dec 2006
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02-23-2007 01:29
We've all learnt from what happened a couple weeks ago that LL is incapable of providing sims at more than roughly 16 per day. With that in mind and the fact that we're experiencing growth in excess of 30,000 new residents daily, it seems highly improbable that there will be any lasting long term effect.
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Evil Land Baron
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Elanthius Flagstaff
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02-23-2007 01:32
We've all learnt from what happened a couple weeks ago that LL is incapable of providing sims at more than roughly 16 per day. With that in mind and the fact that we're experiencing growth in excess of 30,000 new residents daily, it seems highly improbable that there will be any lasting long term effect. Although I'm maintaining a very cautious position just in case I basically agree with this. Although I'd say 16 was on the high side and don't forget the tired old arguments about alts and freebies fudging the numbers. |
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Reece Gunawan
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Join date: 21 Dec 2006
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02-23-2007 01:34
Yes, but even if say 3% of them become premium, we're looking at a constant demand of roughly 16 sims per day. And as Stephen notes, they've been averaging 8 lately.
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Evil Land Baron
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Stephen Zenith
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02-23-2007 01:34
We've all learnt from what happened a couple weeks ago that LL is incapable of providing sims at more than roughly 16 per day. With that in mind and the fact that we're experiencing growth in excess of 30,000 new residents daily, it seems highly improbable that there will be any lasting long term effect. I still think they'll start increasing and decreasing the release of land to keep prices stable at some point in the future. _____________________
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Zenith Zhaoying
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Join date: 28 Dec 2006
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02-23-2007 01:39
I sort of see the point from you guys. I also think LL doesn't want to drop the sim price too much.
What about exchange rate? Could it impact on the land supply/price? Zen |
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Stephen Zenith
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02-23-2007 01:42
I sort of see the point from you guys. I also think LL doesn't want to drop the sim price too much. What about exchange rate? Could it impact on the land supply/price? Zen Yes. Land is bought at auction in US$, however when it is sold on we receive L$. If we wish to reinvest the income, we need to convert the proceeds back to US$, at the prevailing exchange rate. If the rate were to change, it would affect the US$ value of our income, even at a constant L$/sqm price. However, LL are committed to keeping the LindeX stable, and if you look at the graphs of exchange rates you'll see this is exactly what is happening. _____________________
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Reece Gunawan
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Join date: 21 Dec 2006
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02-23-2007 01:44
Th exchange rate has remained very stable lately. LL has been earning roughly 25,000USD off sims daily lately -- not including tier fees, profits earned from the purchase/selling of linden to purchase land in these sims, etc. When you put it all together, it's quite evident that it is not in LL's best interest to have prices fluctuating excessively on a daily basis. Let's face it. Despite the fact there are some risk takers here, much like RL, most people are relatively conservative in nature. The thought of dropping 10-20k usd on sims only to lose it all because LL starts releasing 100 sims per day is a very bad one. First of all, it would turn all the positive press on SL upside down. Players reporting losing more money in a day in SL than they make in a month in RL, that kind of thing... Not good for business, even a virtual one.
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Evil Land Baron
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Reece Gunawan
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Join date: 21 Dec 2006
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02-23-2007 02:04
Judging by search prices, it looks like we all predicted correctly what would happen... Prices have dropped minimally to say the least.
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Evil Land Baron
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Brazil Comet
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Join date: 13 Nov 2006
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02-23-2007 03:21
From what i saw 2-3 hours ago, the minimum price in mainland was at 14+.
That's actually a small increase from last days that excluding dumping parcels at 3-6-8 l/meter, the bottom was at 13,5. This increase might be due to the fact they cut the first land option, so some more people will try to find to buy land Don't know what is going to happen, but also the last days i notice much more trading activity, from end users actually, than the previous 10 days. THis might be explained also by the fact that many were betting that prices will drop, but right now the indication we have is that prices don't drop further than the level of 13,5-14. So, even with 8 sims this could be considered a market bottom and the market seems to have stabilized a bit the current levels of supply. The only case we will have another mini crash is for Lindens to do again the same with throwing many many sims at once, so some will panic and dump their land with loosing money. Right now they seems to supply 160-200 sims per month. They might start thinking of supplying 500 sims per month maybe to see prices dropping enough. And they should be able to do it constantly and every month |
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Reece Gunawan
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Join date: 21 Dec 2006
Posts: 413
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02-23-2007 03:23
From what i saw 2-3 hours ago, the minimum price in mainland was at 14+. That's actually a small increase from last days that excluding dumping parcels at 3-6-8 l/meter, the bottom was at 13,5. This increase might be due to the fact they cut the first land option, so some more people will try to find to buy land Don't know what is going to happen, but also the last days i notice much more trading activity, from end users actually, than the previous 10 days. THis might be explained also by the fact that many were betting that prices will drop, but right now the indication we have is that prices don't drop further than the level of 13,5-14. So, even with 8 sims this could be considered a market bottom and the market seems to have stabilized a bit the current levels of supply. The only case we will have another mini crash is for Lindens to do again the same with throwing many many sims at once, so some will panic and dump their land with loosing money. Right now they seems to supply 160-200 sims per month. They might start thinking of supplying 500 sims per month maybe to see prices dropping enough. And they should be able to do it constantly and every month Agreed _____________________
Evil Land Baron
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Kitty Barnett
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02-23-2007 03:23
Yes, but even if say 3% of them become premium, we're looking at a constant demand of roughly 16 sims per day. And as Stephen notes, they've been averaging 8 lately.  The conversion rate of new residents to premium (whether looking at the total number, or only active residents) has been dropping for the past few months and is now under 1%, half of what it was three months ago. |
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Reece Gunawan
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Join date: 21 Dec 2006
Posts: 413
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02-23-2007 03:31
Thanks for the update Kitty
I haven't looked at the numbers since December. Even at 1%, that's still 300 new residents buying land a day then. Average size bought is maybe 1024? So we need 5 entire sims daily just to feed the needs of new players and probably a few more to feed the needs of existing players. So we're probably looking at a minimum 10/day to crash prices based on this information I'd guess._____________________
Evil Land Baron
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Stephen Zenith
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02-23-2007 03:35
Don't know what is going to happen, but also the last days i notice much more trading activity, from end users actually, than the previous 10 days. I noticed that as well. When I put a new sim up for sale, I like to hang around and watch who is looking around, not just at who buys. Usually I would see the same faces coming and looking, some buying. Yesterday I was seeing a totally different mix of people. _____________________
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Reece Gunawan
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Join date: 21 Dec 2006
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02-23-2007 04:22
I saw one person sell an entire sim within 30 minutes earlier today. And his price wasn't ridiculously low either.
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Evil Land Baron
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Stephen Zenith
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02-23-2007 04:46
I saw one person sell an entire sim within 30 minutes earlier today. And his price wasn't ridiculously low either. If land search had been working when I put my Horsa up for sale, I'm confident it would have gone within a couple of hours. I think some people are drawn to that new-car smell of the eastern continent. _____________________
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Zenith Zhaoying
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Join date: 28 Dec 2006
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02-23-2007 04:49
sounds good!! But have u notice the profit margin has been changed recently? Or people buy the land for flipping more than buying it to build stuff on?
Zen |
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Stephen Zenith
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02-23-2007 04:53
sounds good!! But have u notice the profit margin has been changed recently? Or people buy the land for flipping more than buying it to build stuff on? Zen Different sellers have different ideas about what margin they need to cover their costs, how often they want to flip land, how long they want to be holding it and therefore risk getting caught by falling prices, that sort of thing. Auction prices don't always go up perfectly linearly with resale prices either, depending on supply for example. For what it's worth, I'm planning to maintain the same margin as I have since the turn of the year, but I couldn't speak for anybody else. _____________________
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Zenith Zhaoying
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Join date: 28 Dec 2006
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02-23-2007 04:57
i think my concern is not about sellability (which I think is pretty stable recently), but rather profitability. I think the supply of land might have reduce, although slightly, the profit margin.
Although it doesn't matter to you if you successfully sell the land to someone who flips, at the end the land is empty (ie. no one actively using the land to live, to do biz, etc). I think that's not good for the general public. Zen |
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Reece Gunawan
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Join date: 21 Dec 2006
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02-23-2007 04:59
Profit margins on 1 day flips are certainly down. Ultimately, it's as Stephen says. You're realized profit depends on the risks you're willing to take.
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Evil Land Baron
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Cristalle Karami
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02-23-2007 05:04
People may correctly assume that they will be priced out of the market if they don't buy now. Correctly, at least for a while. Every system ebbs and flows... the only unknown is when it's going to take a dip. Even though LL does great selling sims at 3-4k, the long term health is dependent on people going premium. If the average user doesn't want to go premium and chooses instead to rent, or go homeless, or leave the game, then LL shoots itself in the foot by not doing something to ensure the accessibility of land to thriftier players.
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