Yellow Peril is Perilous

[Qie Niangao]

In the not so distant past, we could look at all the Mainland for sale, coded yellow on the Map, with the comfort of knowing all that was at least paying tier.

That started to change when Abandoned land began going to sale automatically. Any land for sale by Linden Lab is not paying tier, so it's burning server cycles without generating revenue. That's not good for the ongoing product viability of the Mainland.

With this background, Tyche Shepherd's most recent Mainland Census is interesting, particularly the last chart. Among its revelations:

1. we're not just imagining it, more Mainland than ever really is for sale now,
2. for the first time, more Mainland is for sale by the Lab than by Residents, and
3. not only has the amount for sale by the Lab been increasing, but the amount for sale by Residents has actually been decreasing -- both sharply, for multiple quarters in a row.

The way this all is happening seems fairly straightforward: Just through random churn, more and more of the Mainland gets abandoned; some of that abandoned land is subsequently sold for L$1/sq.m., but land is being abandoned faster than it's being sold at that price.

On the positive side, this means the automatic L$1/sq.m. price is currently acting more as a floor than as a ceiling. Land that won't sell at that price is effectively removed from market supply by its artificially high price. That is, the abandoned-to-sale program is cushioning downside price pressure by automatically reducing supply at the lower market price.

Of course, if demand ever recovers, there's a huge and still growing inventory of that L$1/sq.m. land to burn through before the price of least desirable land could ever break through that level. If the market direction were to reverse like that, then the price is a ceiling.

The numbers may inflate the real inventory backlog because a lot of abandoned land is in utterly useless shapes, carved from parcels to save tier. That misshapen crap will never fetch L$1/sq.m., barring an unprecedented growth in demand not filled by any new supply. To the land market, it's irrelevant--but that crap land is still going to show as non-performing for LL, generating no tier, permanently for sale.

Now, that's all about how we got where we are now and what the current situation means, going forward. But for amusement, try extrapolating those curves a few quarters; before long, there would be no land for sale by residents at all. That's not going to happen. Sometime soon, there has to be an inflection point.

[Pussycat Catnap]

What we don't know in this is how does that compare to land in past that was abandoned and sat there in an abandoned condition?

- If we added that land into past figures, as if it was 'land for sale by the lindens', how would the past picture compare to the present one?

 As for 'that's not going to happen' - I once got flamed on these very forums in 2009 for suggesting the price of junk land might someday go below 1.5L/m. No idea anymore who flamed me, but they'd come back with a somewhat terse version of 'that's not possible, factors would intervene to prevent it.'

- The 'average' price of land was about 0.5m/L before the linden's abandoned land policy rose it back up to 1. To actually sell a lot of land though, you still have to go -below- 0.5. Unless you're in a choice location. Then prices can jump back up to 10L, 20L, even more...

The land market has just gotten, super selective.

 

[Koltari]

I was surprised to see that when my neighbor abandoned almost an entire region a few weeks ago it was not automatically set for sale at 1L/sqm by Linden. It is not set to be auctioned either. It's just there being empty, barren and looking sad. I am pretty sure it would have been picked up by someone if it was for sale as it does border to protected water so it puzzels me why it ended in limbo like that.

[Qie Niangao]

We certainly don't know how much land was in a non-productive state before -- nor now, for that matter. Tyche's statistics do record how much was formally abandoned, going back quite a ways, but I think your point is valid anyway: there was no active mechanism for setting that abandoned land for sale, and no evident automatic process for it going to auction, so it just sat there, showing as abandoned but not for sale.

There's all this other non-productive land (not generating tier) that's not formally abandoned. For example, coincidentally, I had a megaprim returned overnight that I'd rezzed years ago to cover up a parcel full of crap, owned by a group that wouldn't respond to IMs. This was all before I learned how to check how much tier was donated to groups, so I popped over this morning to see: sure enough, there's zero contributed tier. I'm pretty confident it's been that way for at least three years, showing in the statistics as normal, tier-producing land, even though it's been nothing of the sort for half the time the continent has existed.

We have no way of knowing for sure how much the swelling stock of land for sale by Linden is due to more abandonment by residents, as opposed to more effort by Linden to get that stuff to market.

One thing, however, suggests it's more the former than the latter: the decrease in the amount of land for sale by residents. That's not a surprising result if the active market is simply shrinking, with increasing amounts effectively pulled from circulation by being artificially priced above market at L$1/sq.m.

What I was saying could never happen is the amount for sale by residents falling all the way to zero, as the current trend would have it. As long as any Mainland has some value, owners will sometimes sell it, so that trend must eventually flatten out.

Perhaps what we're seeing is the gradual emptying-out of all but the most prime Mainland parcels. Eventually, when the featureless landlocked interior of the continents is all but completely abandoned because there's no buyer at any price, then the true size of the remaining market will be evident -- and it will have nothing to do with all that L$1/sq.m. yellow.

[Pussycat Catnap]

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Koltari wrote:

I was surprised to see that when my neighbor abandoned almost an entire region a few weeks ago

...

I am pretty sure it would have been picked up by someone if it was for sale as it does border to protected water so it puzzels me why it ended in limbo like that.

---

Larger lots are harder to sell.

People have to be ready to absorb all that tier.

Too small a lot can shy people away - but too large a lot can make them think twice. Somewhere in between is ideal.

 

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Qie Niangao wrote:

We have no way of knowing for sure how much the swelling stock of land for sale by Linden is due to more abandonment by residents, as opposed to more effort by Linden to get that stuff to market.

One thing, however, suggests it's more the former than the latter: the decrease in the amount of land for sale by residents. That's not a surprising result if the active market is simply shrinking, with increasing amounts effectively pulled from circulation by being artificially priced above market at L$1/sq.m.

Perhaps what we're seeing is the gradual emptying-out of all but the most prime Mainland parcels. Eventually, when the featureless landlocked interior of the continents is all but completely abandoned because there's no buyer at any price, then the true size of the remaining market will be evident -- and it will have nothing to do with all that L$1/sq.m. yellow.

---

I do wonder if the linden land up for sale is why less residents are selling.

The hypothesis: If anyone can buy decent land for 1L/m - its a lot harder to sell what you have, so unless you have an ideal lot; folks give up and abandon.

- No idea how to figure out if that would be correct or not.

And yeah, I think over time we will see an emptying out of a lot of the 'any land will sell' lots that have been made over the years. 2 years ago, you could sell even a bad cut to people wanting a place to start out. Now... why buy that when there's good land for cheap elsewhere, and at a minimum, a linden home at least gives you a viable shape with a built in roof...

If the lindens don't come in and recut a lot of it, it will never move. Some won't move even if recut.

 

We have a company financed by a virtual land market, run by people who have no concept of the human psychology behind virtual ownership of goods and vritual land... The land market is endemic of the same problems seen elsewhere in the SL economy - its finally suffering the impact of years of bad managerial choices.

 

[Cube Republic]

Problem with the land ownership model is it's outdated and too exspensive. Why would anyone pay to 'live' on the mainland, it's a digital ghetto wasteland. Areas like the Blake Sea demonstrate what consumers really want. That is a space that's well managed while still allowing some expression within that framework. There's a sense of community and it also looks gorgous. It's also the same with that brownstone estate whose name escapes me! They should scrap mainland all together. Offer several more entry level products....How about a 7000 prim sim? Or how about larger land masses so individuals can create communities? Time and again I explore the map and the best places are the well managed estates. Take the example of Caledon, it's not peppered with yellow, it looks gorgous, there's I suspect long term residents. This again demonstrates what people want. 

On  side note, Anche Chung is reputed to own 11% of the land mass of private sims, however I estimate it to be higher. So the shift in landowership has gone to renting private residential homesteads.  

On the other hand you also need to take into account the destruction of the land market by the marketplace. There was a time when many people owned land as stores. So people went shopping and bumped into other people with similar tastes and thus further reinforced community. Now people don't need land except for their own little private parcels.

 

Really Linden Lab need to get out of the land buisness and carry on doing what they're good at, which is hosting sims and providing the framework to create whatever you want. They should lower tier, because at the end of the day, as well as my earlier points, this is the real major driving force behind SLs woes.  If land was cheaper, this would increase market place sales as there would be a rush on to get land and populate it with content. As it stands, , they're footing the bill for this 'yellow peril' . Surely getting less money for a large amount of your stock is better than constantly getting no money for it.

[Qie Niangao]

There's certainly a market for Estates, but that doesn't preclude there being a market for the Mainland. It's pretty evident that both markets are shrinking fairly rapidly, but Tyche has a much easier time measuring the rate at which the Estate market is failing, compared to Mainland, where the supply of land is independent of demand. Instead, for Mainland, it's an exercise in interpreting second-order effects of the underlying change.

That, of course, is the whole problem with Mainland: it doesn't automatically shrink to fit demand, as do Estates (in spades these days). The point here is to try using what data is available to tease out what's actually happening to Mainland demand.

[Koltari]

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Pussycat Catnap wrote:

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Koltari wrote:

I was surprised to see that when my neighbor abandoned almost an entire region a few weeks ago

...

I am pretty sure it would have been picked up by someone if it was for sale as it does border to protected water so it puzzels me why it ended in limbo like that.

---

Larger lots are harder to sell.

People have to be ready to absorb all that tier.

Too small a lot can shy people away - but too large a lot can make them think twice. Somewhere in between is ideal.

 

---

Oh yes I understand that. I was just wondering why they let it just become waste land. It didn't get automatically set for sale this time around while the last time it was abandoned it was. Probably just a bug, but if there's more land like that it certainly isn't helping Mainland adding that on top of the for sale parcels that also don't have builds or landscape on them.  :matte-motes-bashful-cute:

[Qie Niangao]

I guess it's debatable whether it's helping Mainland to keep abandoned parcels off the market. There's certainly no lack of land already for sale. Also, a lot of folks complain that the Mainland is laggy, and nothing reduces lag better than empty land.

Whether it's good or bad, however, I've no idea why that particular parcel didn't get the automatic for sale treatment. I have seen some quite nice parcels go to auction lately, so I wonder if the auto-for-sale program gives Dee or Guy or somebody a chance to check and reserve the most promising ones for eventual auction. It would be lost revenue opportunity for LL if they sold for L$1/sq.m. a double-primmed parcel on Zindra, Bay City, Nova Albion, etc., so it would make sense for them to develop a way to intervene before that happens.

[Pussycat Catnap]

I've seen some lots that I knew were occupied until recently, that are now abandoned and not for sale.

I even put in a ticket for one (Torch sim) - and they only put part of it up for sale (in my ticket I asked them to slice it up, which they did, but left most as not for sale, and a land flipper got the rest within seconds of the linden going there...).

 

That we see lots in auction these days - I wonder what the source of that land is. Old abandoned land, or newly abandoned that was not put for sale.

 

[Alicia Sautereau]

Maybe it has to do with that LL kept adding continent after continent back in the day untill the bubble collapsed? 

Personally, i will never in my life get a mainland parcel in my life and actually fallen in love with LionHeart sim setup
Mainlain is and always remain a junkyard, unless you get a full sim, sit in the middile with 64m draw distance heh 

[Qie Niangao]

Yeah, it certainly didn't help that the market was already over-supplied, then they added Zindra and Linden Homes. I still have a shred sympathy with the original Linden Homes program because I actually accept that the intent was to broaden entry-level landownership, with the hope that people would graduate to Mainland and Estate ownership. I actually think that was plausible at the time, when it wasn't so obvious that overall demand was slumping. But there was the fatal error of giving LH that big prim advantage and not raising Mainland bonus tier to compensate, nor lower Estate fees, thus locking-in Linden Homes owners with no viable upgrade path.

The unintended consequence of the bobbled Linden Homes implementation, then, was to erect a barrier to expanded landownership, Mainland and Estate, that wasn't present with premium bonus Mainland.

Zindra was, of course, a complete clusterf*ck from the start. It, and the Adult content policy in general, damaged SL in many ways, of which perhaps the least disastrous was dumping yet more surplus abandoned Mainland on the market. But yeah, it certainly didn't help.

As to the old Mainland / Estate debate, it's really not very interesting to me. I've built my share of Estate sims, and (god knows) I've owned my share of Mainland. Some people like Mainland, some prefer Estates, and I haven't detected much change in the ratio for, oh, maybe three years. Both models are slumping now, the difference being that Estates simply shut down sims. Well, the smart ones do, anyway.

[Phil Deakins]

I saw the introduction of Linden Homes a bit differently to the way you saw it. I know that LL said that it was intended for people to get used to having homes and move on to other land, but I put that down to LL trying to appease landlords. Imo, the sole reason for Linden Homes was to attract more premuin accounts. The idea of people moving on to other land was a sort of excuse and not in any way even a part of the reason for doing it - imo.

Also, imo, it was a good thing to do, even though it had a negative impact on those in the landlord business, because it offered more to premium account holders. Unfortunately, that's where it stopped.

[Pussycat Catnap]

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Alicia Sautereau wrote:

Maybe it has to do with that LL kept adding continent after continent back in the day untill the bubble collapsed? 

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They're actually still doing this.

There are at least 3 complete full sized continents of linden homes sims.

They're not too close to what we think of as mainland - so easy to miss. And they're not -huge- continents. What they were doing on at least 2 occaisions was copying the entire continent when they started getting low on homes.

So at this point - all those full linden homes... that much of mainland is not getting used that might be used if things had been planned better.

Sure, maybe they would not have sold that many of them if linden homes had been build in a disjointed pattern across abandoned land - but mainland might be getting more use, and people in those homes might have seen more reason to tier up and get more nearby land...

Hard to say.

They gambled it one way, I would have done it the other. We know their way has hurt mainland a -LOT- but also gained a lot of premium accounts. So its easy for them to be uninterested in how I would have done it.

 

[Pussycat Catnap]

I have more mixed feeling about the adult policy.

Zindra was done all wrong I'll agree - even though I have retreated to Zindra for, oddly, better land choices (not true when it opened, true now).

But I am glad that certain sorts of things no longer show up all over regular locations anymore. The 'naked guy with frenis out and about' and the 'collared females' both are a rarity now whereas before that was almost a tenth of people you would see, if not more, on regular M land.

When I first bought land in SL, my daily hassle was finding people on the road in front of my lot, on my lot, and the adjacent lots - using all of the animations of their sex HUD...

Funny some of the time, but not always... Now at least, I can usually control when and where this occurs.

 

But the way it was done - a new continent - was a mess. They should have done what many have suggested and taken one existing continent and changed it to G, then all the rest to M, and maybe one small one to A - then moved people around.

They already did do the move around... remember all that? So, since they already were going to do a nightmare with people's locations - they should have done it right, without expanding the amount of land beyond what was being used...

- People on M land got changed to G, or the small M that went A, or the G that went M - they'd have been ticked off at being forced to move. But that happened anyway with the plan they did go with... Ie: If you're going to tick everyone off, at least come out the other end with a better result...

 

[Koltari]

There was a survey about Linden homes a few months ago. I wonder what kind of feedback they got all in all.

[Seven Overdrive]

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Koltari wrote:

There was a survey about Linden homes a few months ago. I wonder what kind of feedback they got all in all.

---

 

I told them that they should lower tier to encourage people to only use the Linden Homes as a stepping stone to land ownership in SL.   Mainland tier would have to be lowered enough to make living in a big junkyard worth it though.  

[Alazarin Mondrian]

As long as people are prepared to play the land flipper / baron game I don't see any reason for LL to change tack. Sure, the margins for land fliipers are probably negligible these days but they do pay tier on land.... which is what LL wants. I'm a mainlander surrounded by a sea of yellow. Some is abandoned land for sale at 1L$/m, some is waterfront land at a higher price [land flippers at work] and there's one huge parcel [3/4 of a sim] at 3.4 L$/m. There's also a fair amount of abandoned land that is not for sale for one reason or another.

 

Maybe the Linden Homes mini-continents should have been bolted onto the existing continents. That would have made the migration from Linden Home rental to land owning a bit more obvious to new residents. It could still be done.

[Marianne McCann]

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Cube Republic wrote:

Problem with the land ownership model is it's outdated and too exspensive. Why would anyone pay to 'live' on the mainland, it's a digital ghetto wasteland. Areas like the Blake Sea demonstrate what consumers really want. That is a space that's well managed while still allowing some expression within that framework. There's a sense of community and it also looks gorgous. It's also the same with that brownstone estate whose name escapes me! They should scrap mainland all together. Offer several more entry level products....How about a 7000 prim sim? Or how about larger land masses so individuals can create communities? Time and again I explore the map and the best places are the well managed estates. Take the example of Caledon, it's not peppered with yellow, it looks gorgous, there's I suspect long term residents. This again demonstrates what people want. 

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I would say that Bay City has also proved a viable model. Themed land with a fairly strong community base is a winner. 

In SLs heyday, growing land fast was a very viable thing, IMO. People wanted land, and the lab was more than willing to add it. At this stage of the game, however, there simply is too much out there for the userbase to support. While Bay City does well (as do some ofthe other city areas and other Resident-created community spaces), other areas simply do not.

In my heart of hearts, I wish the lab had not added Gaeta, Corsica, and perhaps even Nautilus and Satori. It would have made for a VERY lean land market in the heyday, but it would mean it would still be fairly strong now. 

[Pussycat Catnap]

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Seven Overdrive wrote:

I told them that they should lower tier to encourage people to only use the Linden Homes as a stepping stone to land ownership in SL.   Mainland tier would have to be lowered enough to make living in a big junkyard worth it though.  

---

My idea for that would be this:

Premium gives you a linden home, as it is curently set up, OR 1024 of mainland tier.

- That would actually make mainland an upgrade for everyone, and not just those of us who know how to make more out of less prims.

[Seven Overdrive]

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Pussycat Catnap wrote:

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Seven Overdrive wrote:

I told them that they should lower tier to encourage people to only use the Linden Homes as a stepping stone to land ownership in SL.   Mainland tier would have to be lowered enough to make living in a big junkyard worth it though.  

---

My idea for that would be this:

Premium gives you a linden home, as it is curently set up, OR 1024 of mainland tier.

- That would actually make mainland an upgrade for everyone, and not just those of us who know how to make more out of less prims.

---

 

 

 

Actually I would like to see them ditch the whole Linden Home idea and make mainland the starter choice again as it once was.  Remember First Land?  It was gamed to death by land flippers, but at least it introduced new residents to the mainland market from the start.  

I would like to see a minimum of a 2048 sq m premium land allotment or an even larger 4096.   This would require a reworking of tier though or even the premium membership.  It could be offered for premiums that pay for a year or they could even offer a premium plus membership, or something similar.  Any amount of land beyond that and the normal tier rates would kick in.  It is quite obvious to most of us that it isn't the initial cost of the land, but the cost of the ongoing monthly tier for that land that is the issue, and a much larger free tier offering would give people more incentive to put down some roots in mainland and SL in general.  

Mainland really should be LL's economy land product, but at the current tier rates for it.. it isn't such a great deal as all the yellow on the map indicates.

[Pussycat Catnap]

Oh I agree with you. But it'd be chaos if they just booted all those Linden Home people out overnight.

So they need to squeeze them out, but not with a penalty, but by making the other choice better. I should add that I would couple my suggestion with no more linden homes and no more taking one. Abandon; and you're out.

- Start merging their sims as its population dwindles.

 

The problem is I'm sure its making money. Its a short sighted approach though. LLs is making money, by strangling itself.

They need to ween all those people over to mainland, without losing any premium subscribers... Or we're all screwed.

 

[Seven Overdrive]

Or perhaps the long term goal is to ween the mainlanders over to the Linden Homes.  It would be cheaper and more manageable for the Lab and completely automated if people were in managed communities.  People that wanted more would be funneled to the more expensive private estates which would mean more private estate sales with less support costs.  

It has been awhile since I saw the survey, but I seem to recall a question asking how the Linden Homes could be improved and I would have sworn one of the selectable options was a larger plot of land (might have been just a bigger house and not more prims, but can't remember).   I wish I could go back and look at it to verify because my memory isn't what it used to be.  Maybe someone else that took the same survey could verify that.

[Qie Niangao]

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Seven Overdrive wrote:

Or perhaps the long term goal is to ween the mainlanders over to the Linden Homes.  It would be cheaper and more manageable for the Lab and completely automated if people were in managed communities.  People that wanted more would be funneled to the more expensive private estates which would mean more private estate sales with less support costs. 

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That's pretty hopeless, though.  The Mainland can't plausibly unplug a sim at a time, as they're abandoned, without leaving big void gaps in the middle of everything.  They'd have to somehow entice people to move... and that's not easy. The Zindra migration was one example of the chaos and resentment that comes of mass relocation. And there are always hold-outs who will moan and gripe and make noises about how they have Real Live Internet Lolyers on retainer and the Lab better watch out.  Take the historical example of the Ancient Shyster of adfarms, or the current queen of casino crystals.

In contrast, the LH sims could easily blink out one at a time and nobody could much care. 

It's certainly true that the Lab can't really afford for the Mainland to suddenly compete favorably with Estates. I mean, if a bunch of Estate tenants left in favor of some much better deal on Mainland, it would hurt LL's bottom line.  I don't know how many idle Mainland sims they can afford to let rot in order to preserve the revenue generated by just one Estate sim, but I bet it's quite a few.

There's also a quite different income model that LL used early on: Lifetime memberships with some square meters of free forever tier. I'm not sure what a viable market for such a product would be at this point, but it seems worth mentioning.  I mean... I'd be interested, at the right price, and I think such a program could generate revenue for Mainland that otherwise seems destined to just rot away forever.  On the other hand, it very well might steal away Estate customers, so the Lab would need to be careful about that... if they'd ever even consider such a program again.

[Seven Overdrive]

I agree that scenario is grim and it is completely based on my fuzzy memory of the LHs survey.  Even if I cannot  remember the complete details in it, one thing was very clear...  

The point of the survey was to get opinions on how to make the LHs offering better.  IMO that doesn't bode well for the mainland.  Why solicit opinions about how to make them better when they have all that available mainland at their disposal?  Plus, they only advertise the LHs as a perk for signing up for premium.  They don't equally advertise the mainland as an option.  I find that to be very telling.  

 

It really wouldn't surprise me if the mainland is being left to just wither on the vine while they only try and push new premium members into the LHs.  That really is the only thing that makes sense to me and eventually they will have to shake things up a little to balance the whole land market and some group of people will probably end up getting the short end of the stick.  Somehow I doubt it will be the estates.

 

But who knows.  Maybe they have a brilliant secret plan in the works that will make everyone a winner.  Doesn't hurt to have some optimism I suppose.

 

ETA:  I do remember the lifetime premium accounts, but I think I just missed them when I signed up in mid 2005.  I would love to see that return.  The only thing with that is, LL is a completely different company now than it was back then and any special offer like that would most likely need to be fairly cost prohibitive so the estates remain stable.  It would most likely be too expensive for me, but I think others would enjoy it.