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Thoughts on "Want Lower Tier? Now You Can Get Grandfathe​red Land Rates!"


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Have a read....

https://community.secondlife.com/t5/Featured-News/Want-Lower-Tier-Now-You-Can-Get-Grandfathered-Land-Rates/ba-p/3019148

IMHO This is the end of the LL Land Ownership as a business.

Paying a Buy Down Fee of $600.00 USD per region I own to get a monthly rate of $195.00 USD won't be happening. Why would I? If I owned 5 full regions that is an outlay of $3000.00 USD and I would be forced to reduce my tenant lease rates accordingly so there is no way I would ever see a payback of this fee.

This is nothing more than a dying gasp from the Linden Lab Accounting department to fleece those of us who have been paying $295.00/month for years.

This offer of a rate Buy Down ends very close to the date that the whatever it will be named Sansar starts its active Live Beta/Production Service.

Nice try LL.

The end result will be a lot of us abandoning our investment in our full regions.

This should have been granted to any land owner who has owned full regions [& Homesteads] for a minimum length of time immediately and to everyone afterwards once this qualifying period is met. We've [long term small estate land owners] paid our >Delta< Grandfathering cost for years as a higher rate and with the $1000.00 per region setup fees and used region transfer costs.

-- Angry Land Owner

 

NOTE: I've done the math and will let my tenants know my regions are going up for sale [or abandonment] at the end of June.

There is nothing worse than getting mugged by a long term business associate. This is exactly how this feels.

 

 

 

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Whether or not the offer should have been given to current owners of full price private islands or not is another issure entirely.

In contrast to almost the entire community's beliefs, and no matter how you look at it, LL actually lowered tier. Yes, it will take 6 months to see the reduction begin, but it still happened. You have no more disadvantage now than you did before. Nobody will see a reduction earlier than you if you take advantage of it now.

If anything, you should have an advantage over anyone purchasing later on unless they purchase a grandfathered region.

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BarcodeBrian wrote:

Whether or not the offer should have been given to current owners of full price private islands or not is another issue entirely.

In contrast to almost the entire community's beliefs, and no matter how you look at it,
LL actually lowered tier
. Yes, it will take 6 months to see the reduction begin, but it still happened. You have no more disadvantage now than you did before. Nobody will see a reduction earlier than you if you take advantage of it now.

If anything, you should have an advantage over anyone purchasing later on unless they purchase a grandfathered region.

I'm sorry but I strongly disagree. Current land owners should NOT have to re-up their investment into Second Life.to obtain this rate reduction! We have been paying higher fees for years than those owning grandfathered regions.

This investment at this time is dubious at best. Second Life as it is is going to eventually be displaced and the current cash cow of Linden Lab will become a trickling creak. A reduction in tier Fees should not have to be bought into.

All this does is allows LL a way to generate a huge cash influx from those who will end up with investments worth less on paper in 6 months. Region Abandonment is a huge issue and will continue to be into the future. Why would anyone pay to have their investments become worth less?

Packaging the [COME BE A MEMBER OF THE GRANDFATHER CLUB FOR $600] as this announcement is is pure greed!

 

 

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Pamela Galli wrote:

It will take me six months to recoup the cost, but after that I will be saving almost $400 a month on my four sims (unless LL closes SL).

Pamela, so investing $2400.00 USD into Linden Lab at this time ... $2400.00 USD seems like a good idea to you? There is way too much going on that we don't know about to make that kind of re-investment now in order to realize a cash flow saving 6 months from now.

If you have that kind of confidence in LL and the current product known as Second Life more power to you !

I'm just saying I don't and I'm a retired accountant in RL.

The bottom line in your case is that you are paying $2400.00 USD to hold onto 4 Regions that will be worth substantially less in the near future. [both in terms of income production & any appreciation when selling] You can't sell them and make a profit later. You won;t be able to keep your lease rates where they are now. The leasing market will collapse after this.  SL Regions will not become a hot commodity all of a sudden after Sansar starts up.

Sigh.

 

 

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On this subject, just about everyone disagrees with you, including Jo in the blog post you linked.

And still, whether or not curent land owners should have been given the reduction right away without further investment is a different discussion entirely.

You are free to pass on it if you like, but I am already seeing others claim that they are jumping on it.

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BarcodeBrian wrote:

On this subject, just about everyone disagrees with you, including Jo in the blog post you linked.

And still, whether or not current land owners should have been given the reduction right away without further investment is a different discussion entirely.

You are free to pass on it if you like, but I am already seeing others claim that they are jumping on it.

If I owned these regions for my own pleasure and use and not as a leasing business I may have a different attitude. But I don't. And I'm usually a fan-girl of Second Life. Now I'm depressed.

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KarenMichelle Lane wrote:


Pamela Galli wrote:

It will take me six months to recoup the cost, but after that I will be saving almost $400 a month on my four sims (unless LL closes SL).

Pamela, so investing $2400.00 USD into Linden Lab at this time ...
$2400.00 USD
seems like a good idea to you? There is way too much going on that we don't know about to make that kind of re-investment now in order to realize a cash flow saving 6 months from now.

If you have that kind of confidence in LL and the current product known as Second Life more power to you !

I'm just saying I don't and I'm a retired accountant in RL.

The bottom line in your case is that you are paying $2400.00 USD to hold onto 4 Regions that will be worth substantially less in the near future. [both in terms of income production & any appreciation when selling] You can't sell them and make a profit later. You won;t be able to keep your lease rates where they are now. The leasing market will collapse after this.  SL Regions will not become a hot commodity all of a sudden after Sansar starts up.

Sigh.

 

 

Well it sounded like a good idea until you said all this! Now I don't know. But I don't plan to sell my regions, ever, and I don't rent them. I might even think about adding a homestead.

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Pamela Galli wrote:


KarenMichelle Lane wrote:


Pamela Galli wrote:

It will take me six months to recoup the cost, but after that I will be saving almost $400 a month on my four sims (unless LL closes SL).

Pamela, so investing $2400.00 USD into Linden Lab at this time ...
$2400.00 USD
seems like a good idea to you? There is way too much going on that we don't know about to make that kind of re-investment now in order to realize a cash flow saving 6 months from now.

If you have that kind of confidence in LL and the current product known as Second Life more power to you !

I'm just saying I don't and I'm a retired accountant in RL.

The bottom line in your case is that you are paying $2400.00 USD to hold onto 4 Regions that will be worth substantially less in the near future. [both in terms of income production & any appreciation when selling] You can't sell them and make a profit later. You won;t be able to keep your lease rates where they are now. The leasing market will collapse after this.  SL Regions will not become a hot commodity all of a sudden after Sansar starts up.

Sigh.

Well it sounded like a good idea until you said all this! Now I don't know.

I don't mean to be all negative and such but I do not see the long term gain if you are in the parcel leasing business;.

Pam in your case maybe this makes sound $$ sense. You enjoy your regions for your own pleasure. Knowing that you will want them well into your RL years might make this a very sound investment for you. But I don;t have $2400.00 USD just laying around. I would recommend that you never use a Credit Card for this if you decide to go for it.

Please someone show me that Linden Lab's Second Life has income potential anymore past the end of this year and once the Sansar project starts up.

Clearly the timing of this announcement is to deal with the Region Abandonment rate SL is experiencing. It is NOT LL Management coming to some enlightened POV that rates need to be lower. LL needs the cash flow from region leasing. That is its big cash cow.

I've seen multi-tiered marketing scams that looked better than this deal.

Charging us 6 months ahead of time of the lost revenue to get the lower rate?

Folks, this is a cash infusion strategy for Linden Lab.  Not a win-win.

 

 

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KarenMichelle Lane wrote:


Pamela Galli wrote:


KarenMichelle Lane wrote:


Pamela Galli wrote:

It will take me six months to recoup the cost, but after that I will be saving almost $400 a month on my four sims (unless LL closes SL).

Pamela, so investing $2400.00 USD into Linden Lab at this time ...
$2400.00 USD
seems like a good idea to you? There is way too much going on that we don't know about to make that kind of re-investment now in order to realize a cash flow saving 6 months from now.

If you have that kind of confidence in LL and the current product known as Second Life more power to you !

I'm just saying I don't and I'm a retired accountant in RL.

The bottom line in your case is that you are paying $2400.00 USD to hold onto 4 Regions that will be worth substantially less in the near future. [both in terms of income production & any appreciation when selling] You can't sell them and make a profit later. You won;t be able to keep your lease rates where they are now. The leasing market will collapse after this.  SL Regions will not become a hot commodity all of a sudden after Sansar starts up.

Sigh.

Well it sounded like a good idea until you said all this! Now I don't know.

I don't mean to be all negative and such but I do not see the long term gain if you are in the parcel leasing business;.

Pam in your case maybe this makes sound $$ sense. You enjoy your regions for your own pleasure. Knowing that you will want them well into your RL years might make this a very sound investment for you. But I don;t have $2400.00 USD just laying around. I would recommend that you never use a Credit Card for this if you decide to go for it.

Please someone show me that Linden Lab's Second Life has income potential anymore past the end of this year and once the Sansar project starts up.

Clearly the timing of this announcement is to deal with the Region Abandonment rate SL is experiencing. It is NOT LL Management coming to some enlightened POV that rates need to be lower. LL needs the cash flow from region leasing. That is its big cash cow.

I've seen multi-tiered marketing scams that looked better than this deal.

Charging us 6 months ahead of time of the lost revenue to get the lower rate?

Folks, this is a cash infusion strategy for Linden Lab.
 
Not a win-win.

 

 

No I appreciate hearing the cons as well as pros.

I don't lease anything, my regions are just a business expense, not an investment in themselves. I have to have at least four regions to keep my merchandise displayed. I think they will still be a reasonable expense after Sansar, esp with the tier reduction, but no way of knowing anything for sure. But if Sansar does not open for six months, then I will at least come out even.

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Pamela Galli wrote:

No I appreciate hearing the cons as well as pros.

I don't lease anything, my regions are just a business expense, not an investment in themselves. I have to have at least four regions to keep my merchandise displayed. I think they will still be a reasonable expense after Sansar, esp with the tier reduction, but no way of knowing anything for sure. But if Sansar does not open for six months, then I will at least come out even.

~~~~~~~~~~~~~~~~~~~~~~~~~~

Yes by that thinking I do agree with you.

I pray that merchants with in-world locations will continue to have profits over then next several years. :D

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And if it IS aimed at stopping or slowing region loss, why is that a bad thing?

SL still makes enough of a profit to stay open as it is without a drastic decline.

If there were any possible way to lower tier with the least amount of friction, the way they did it might well have the best possible.

The rage from everyone paying more for years, and especially those who stopped because of how the rates were then, was going to happen no matter what. There is no way it was avoidable. Sad, but I'm sure they knew that some would be furious even if they lowered tier.

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KarenMichelle Lane wrote:


Pamela Galli wrote:

It will take me six months to recoup the cost, but after that I will be saving almost $400 a month on my four sims (unless LL closes SL).

Pamela, so investing $2400.00 USD into Linden Lab at this time ...
$2400.00 USD
seems like a good idea to you? There is way too much going on that we don't know about to make that kind of re-investment now in order to realize a cash flow saving 6 months from now.

If you have that kind of confidence in LL and the current product known as Second Life more power to you !

I'm just saying I don't and I'm a retired accountant in RL.

The bottom line in your case is that you are paying $2400.00 USD to hold onto 4 Regions that will be worth substantially less in the near future. [both in terms of income production & any appreciation when selling] You can't sell them and make a profit later. You won;t be able to keep your lease rates where they are now. The leasing market will collapse after this.  SL Regions will not become a hot commodity all of a sudden after Sansar starts up.

Sigh.


If you've been reading about it, you know that Sansar is not SL ... pretty much not even close except both deal with virtual worlds. Maybe someone will pay LL for a big enough world in Sansar to create a competitor to SL, but they'll be stuck with the same model as now ... charging users fees for land rental. They won't even have a marketplace since LL is handling the marketplace for all the Sansar worlds. We don't know what LL will be charging for the worlds, so we don't know how much it'll cost to rent there. Furthermore, if worlds/experiences have to be recompiled at once, renters won't even be able to decorate their homes since that would shut down the world until the entire thing goes through the optimizer. Sansar isn't good for what SL does.

You shouldn't expect any appreciation when selling, whether or not Sansar exists. It's been a buyer's market for a long time - the time when land prices appreciated is long past. If anything, you should be able to get more for your regions if they have the grandfathered tier rate. If I was buying a region, I'd pay more upfront to get US$100/month less maintenance cost.

Why decrease your rental rates to match the decrease in monthly tier? Not everybody will be able to take this deal due to the upfront cost, so they won't be able to reduce their rates. BTW, Anshe charges the same for rent whether or not the region is grandfathered. I know; I pretty much covered her tier on a grandfathered region for years by renting a bit over half of it. The land's value to me didn't go down because she was paying less.

 

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I appreciate your thinking on this and for many sim owners this will be a no go.  For others it may make good sense.

I don't think that SL is going to die as soon as you think.  I've talked to so many people who have already decided they will not be leaving SL for Sansar, as they have spent too much on inventory etc. just to give it all up.  Sansar would really have to 'knock it out of the park' spectacularly, both technically and in terms of cost to them, to lure them there permanently any time soon.  Cost includes drastically lower land rent as well as a really low cost to build their inventories to an acceptable level.

From all I've read and heard about the new grid, I think Sansar, while welcoming any SL residents there, is targeting another market than SL residents and both virtual worlds can co exist.  I don't think LL would be spending money on the further improvements it is making to SL or working on, if they though it would die shortly after Sansar opens.  Sansar is going to take a few years AFTER it opens to have 'fully developed' experiences and the variety of inventory content available that SL has now.  That's provided content creators flock there and start putting out content at a good pace.

While I realize my evidence is not scientific, what I have heard from most casual users of SL, (ie not content creators) and what I've read about Sansar, leads me to personally believe that SL will be around for the forseeable future unless LL pulls the plug.  I may be wrong but don't think I am.

Also, for all we know at this point, Sansar may turn out to be a big fail.

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Few remember that way back in 2006 - nearly 10 years ago! -- I was the one who blew the whistle on the imminent plans of the Lab to start selling their islands for a higher cost - and their secret offer to their friends in a special developers' group to get the old price  and stock up on sims before the new price kicked in. You can't put outside links in the forums but this article is findable on the Alphaville Herald and is about "Sticker Shock".

At that time, Linden was then forced to sell sims at their existing rate to anyone who wanted them instead of just letting their friends enjoy the good fortune. They made up for this by the homestead debacle -- but that's another story.

Naturally, those of you who came in a little later, and missed the deadline to buy the old "grandfather" rate had to pay the $295. Of course, at that time you got better sims -- faster, with more capacity. At first, there was great distress that some people would be forced to have to charge higher rent. That they made up for this by stocking up on zillions of homesteads that they merely flipped to new "estate managers" that they never had to do customer service for is of course long forgotten in the mists of virtual time. Linden then cracked down on that because they couldn't see why everyone should make money off their lands but them.

Eventually, those with $295 instead of $195 islands made higher-end content, worked harder or created special themed communities to attract a higher-paying customer than the slower-speed $195s -- that creator-fascism solution sold as simply creativity that forces so many people into frustration and burnout and selling or abandoning their sims.

But that worked, as the $295 sims took over the market. $195 sims still traded briskly, but the reality is, they didn't fill up any better than $295 sims. These are intended for the kind of person for whom it doesn't matter whether they pay $5 a week US for a parcel or $10 a week as these are people who drop bills in Starbucks or restaurants or at movies and it doesn't matter.

Today, even $195 sims have trouble staying filled (and less than 80% occupancy means loss of money) and have to keep lowering their prices constantly (like me) or offering extra features like homes and furniture  -- I see many homestead owners offering not just rock-bottom prices but lower prices than the tier they have to pay just to have something coming in.

If YOU don't have to pay another $100 US on your sim every week, and can pass that savings along to your customers in the form of lower rent, I'm just not getting your agida. They will be happy and you will be happy to have less tier.

The ONLY reason this would be a loss is if you have still not paid back your purchase cost -- your "set-up fee" for the island in the first place. Now that really bites. 

And that's why Linden should do the right thing for those who bought their islands only X months ago -- arrive at a fair number. Within three? Within six? And for those people, do not require the paydown fee but just start them at the lower tier. Something like that.

 

 

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The coherence of this debate is really hampered by the fact that no one knows how many grandfathered islands there are; no one knows how many $295 islands there are; no one knows the size of the population logging on every day or every 30 days prepared to spend the US $20 or so required to get a 4096 parcel on an island. We used to know more of that information, particularly that last bit.

Let me suggest that if the Lindens stopped $195 sims in 2006 -- I was there, and documented it, so I know -- and started selling $295 sims in December of that year, there just aren't that many people with $195 sims. As far as I can tell, $295s dominate the market. The world expanded and then contracted, but I don't see any evidence that the number of $295s so fell as to equal or be similar to the number of $195. 

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Everything you say makes a lot of sense. Of course the wildcard really is whether Sansar will be the circus or the movies that people go to for some kind of special entertainment, but the old SL will be where they can fall back to in order to have land and content that they stored and which they can control better than they will be able to do in Project Sansar.

Maybe the bottom will fall out, or maybe there will be a burst of individual end-users, and a boom in renters at new lower prices. It's hard to tell. SL can behave like that. But usually any change in SL means loss.

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Prokofy Neva wrote:

Few remember that way back in 2006 - nearly 10 years ago! -- I was the one who blew the whistle on the imminent plans of the Lab to start selling their islands for a higher cost - and their secret offer to their friends in a special developers' group to get the old price  and stock up on sims before the new price kicked in. You can't put outside links in the forums but this article is findable on the Alphaville Herald and is about "Sticker Shock".

 

Of course outside links can be placed in here - with some restrictions. Disallowing the Alphaville Herald to blatantly be directly linked to from here is a responsible move by the moderators.

And of course, we all know how well the voices in one person's head can accurately predict what is going on behind the closed doors of others.

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In SL, we always manage to find the cloud hiding under a silver lining. Even if what we're dealing with is just a rock of silver.

 

Today is the first time in my years in SL when I actually ran myself through the numbers of maybe buying a sim. All I'm seeing is silver right now.

And if I were a non-grandfathered land baron, right about now I'm be doing one heck of a happy dance. Even if I were a partly grandfathered estate baron, right now I'd be running my numbers for "is the time to expand my holdings coming? How much back-demand do I have that I didn't see as profitable to fill before?"

Silver...

Keep your clouds out of the silver...

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I must admit, I went through some possible numbers myself over night and if I was still in the position to be actively paying directly (as opposed to renting) this would be a huge plus point move. Possible worst cas, it is amortized over a year...

Plus I sort of miss the mainland.

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Agreed, this is LL generating cash flow for themselves and only that. Normally a reduction in tier would be cause for celebration after so many years of an overpriced product, although when a company is in decline, it may be a bad sign.

If SL and Blocksworld are indeed in profit as LL claims then they don't need to tap into more cash flow to fund Sansar.

When LL reduced the setup fees back in November it didn't make a dent in the bleeding of sims lost every week, so it did nothing to retain users and sims, and this move probably won't either.

It may be telling as you say, that the offer ends around the time of Sansar entering the picture. There are a couple of scenarios here. It isn't a secret any longer what Sansar "is" after the information we've gotten about it. It is simply another game engine with LL providing the hosting, currency and marketplace.

So the first scenario is that LL has found out that building a game engine is a large endeavor that can't be done with the small team they started out with. (Both Unity3d and Epic (Unreal Engine) have upwards of 100 employees dedicated to game engine development). This means much more cash than they anticipated in order to get Sansar out the door for public beta. It also means that they're willing to sacrifice not enough profit for less profit to get it out the door. The risk this puts on SL surviving is great, which leads us to the other scenario that the OP eludes to ...

This scenario has LL milking the userbase for whatever cash it can (something I predicted a couple years ago) before its potential closing. Which puts LL in a good place, because they can then close SL, fire a couple hundred employees and cut an enormous amount of overhead and then build the company back up again from Blocksworld and Sansar.

If there is some sane path here of keeping SL alive after a Sansar release I'm not seeing it, unless very few people actually "buy down" their sims at $600. But if very few people buy down, there's very little point to doing it in the first place.

It makes about as much sense as any other LL decision which is to say none to little. It is a company with buggy management. About what I'd expect from a company more concerned about monetization tactics than building software worth the price tag. At your own risk applies to this particular offer. Of course if you end up saving a few hundred on the deal and the worst case is realized that SL gets shuttered then you're still ahead.

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I saw this as a reason to get a private sim again.  I have not had one for years, and recently bought mainland for the lower tier.

Now, for an apparently investment of US$1200 ($600 setup + $600 "buydown"), I can get a private sim with the same $195 tier fee as I am paying now for mainland.

Maybe, just maybe, since my mainland is adult coastal, I can somehow break even if I sell it first.

Any thoughts?

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KarenMichelle Lane wrote:

I don't mean to be all negative and such but I do not see the long term gain if you are in the parcel leasing business;.

Long term is all you have.  Short term is the killer.  Unless you are saying you do not see the parcel leasing business as being viable in 6 months' time so there is no way to recover the loss; I can agree with that.

 

This is not an altruistic move.  LL needs to make money so its employees can pay rent and feed their families just like everyone else.  I expect to see a new pricing strategy come to SL along with the introduction of Sansar which will happen around the tier buy down break even point.

 

You could always just wait and buy other people's grandfathered sims in 6 months for pennies on the dollar when the second exidus hits

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