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On 12/23/2020 at 8:20 PM, Tarina Sewell said:

Does this mean region pricing will go down? I am not sure the cost of cloud based service however, I am sure it is far less than up keep the massive server rooms LL needed previously, let alone office space.... Vacating the ole brick buildings? 

Curious, to see how this plays out. We put a lot of faith in Amazon. 

 

 I have noticed myself several things... mostly avatar based issues. Not so much region issues. so far..

 

Supposedly AWS was going to completely change pricing.

Something tells me we'll be underwhelmed.

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5 minutes ago, Paul Hexem said:

Supposedly AWS was going to completely change pricing.

Something tells me we'll be underwhelmed.

Who supposed that?  Give us sources!  I only heard and read LL peeps saying they do not yet know if AWS bill would be less than data enter costs.  It was mentioned that the computers in the datacenter were about a decade old and probably due for replacement, which would be a big expense.

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6 hours ago, Ardy Lay said:

Who supposed that?  Give us sources!  I only heard and read LL peeps saying they do not yet know if AWS bill would be less than data enter costs.  It was mentioned that the computers in the datacenter were about a decade old and probably due for replacement, which would be a big expense.

I don't have sources, I'm not inclined to go back through all the various things I've read over the last few years to find it.

I'm operating on admittedly faulty memory.

That said, it's no secret that virtual machines are cheaper than real ones. Go look up the costs to rent a virtual server for anything vs a dedicated box (hint, even the dedicated boxes are less than the cost of a single SL region).

A switch like this should mean lower prices, because now LL has no excuse for the price gouging they've been involved with up until this point.

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1 minute ago, Paul Hexem said:

That said, it's no secret that virtual machines are cheaper than real ones. Go look up the costs to rent a virtual server for anything vs a dedicated box (hint, even the dedicated boxes are less than the cost of a single SL region).

A switch like this should mean lower prices, because now LL has no excuse for the price gouging they've been involved with up until this point.

That might be the case if the only cost incurred by LL to run SL was the server/virtual machine cost.    

It may be that server cost is a large part of their costs, but still it's just one part of the overall costs for overall operation, development and support.  I don't know that there is really any way to know that LL has been "price gouging" without knowing the full picture.

I'm still holding out some hope though, that after all the loose ends from the uplift are tied up and everything stabilizes, that there may be some cost savings realized, and that they may apply those savings towards lowering land costs, or perhaps apply them to offering some different options for owning regions.  Or they could use the savings to offset expense increases in other areas (like re-working the MP,  or some other large re-work project).   

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29 minutes ago, Paul Hexem said:

I don't have sources, I'm not inclined to go back through all the various things I've read over the last few years to find it.

I'm operating on admittedly faulty memory.

That said, it's no secret that virtual machines are cheaper than real ones. Go look up the costs to rent a virtual server for anything vs a dedicated box (hint, even the dedicated boxes are less than the cost of a single SL region).

A switch like this should mean lower prices, because now LL has no excuse for the price gouging they've been involved with up until this point.

If I consider sim/server costs on other Grid platforms, the expense for the hardware in the long term is a small portion of the total especially if as a previous poster mentioned, they were 10 years old.

I would be surprised if being on the cloud will actually reduce that portion of the expense.

Edited by Arielle Popstar
added a thought.
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16 hours ago, Ardy Lay said:

Who supposed that?  Give us sources!  I only heard and read LL peeps saying they do not yet know if AWS bill would be less than data enter costs.  It was mentioned that the computers in the datacenter were about a decade old and probably due for replacement, which would be a big expense.

Relating to cost saving - what Ebbe describes here is how Kitely run their servers on AWS.

"It turns it into less capital expenditure to have to buy all the equipment and doing all the maintenance on that. You kind-of pay for what you use; with Second Life [right now], once we’ve bought a piece of hardware, we have to sit on it whether it’s being utilised or not, whereas you can kind-of dynamically scale your consumption as necessary when you use something like AWS … which we believe will reduce costs for use and then ultimately, we hope to pass that on to customers."

Ebbe Altberg, VWBPE, March 15th 2018.

Relating To Tier

"Some experiences might want to have continuous persistence over time, and maybe that’s one type of pricing model, for an “always on” type of scenario. Maybe other will be fine with, “hey, I’m only using this for a few hours in a class a few times a week” or something. and if that can spin-up in a few seconds, and then I just need to basically pay for the time that I’m utilising it. Those could be potential options for us to explore."

Ebbe Altberg, VWBPE, March 15th, 2018.

Source: Here

9 hours ago, Arielle Popstar said:

If I consider sim/server costs on other Grid platforms, the expense for the hardware in the long term is a small portion of the total especially if as a previous poster mentioned, they were 10 years old.

I would be surprised if being on the cloud will actually reduce that portion of the expense.

Then please explain how Kitely (which is one of those 'other grid platforms' you mention) manages their region costs so low.

Kitely (run on a modified OpenSim system and on the cloud) charges $39.95/month for 16 joined regions and attribute their pricing being so low due to being able to not have servers always on. Exactly how Ebbe describes in the above quote. Vast difference in cost to LL who charge $229/month for one or to match kitely $3664 for 16 regions.

Sure, granted they are a smaller company, however they have proven that region hosting can be very cheap on AWS. Given Second Life still has no mega regions like OpenSim, then surely if Kitely can offer 16 regions for $39.95/month, Linden Lab can offer 1 region for the same price.

Taking basic business 101 - for an established business such as Linden Lab that claim 900,000 'active users' per month then lowering tier prices is in their favour. The cost prohibitive region pricing Linden Lab have now locks out the majority of Second Life users from purchasing a region and thereby directly impacts on potential other incomes such as marketplace sales, upload costs etc.

There are currently 17,083 active private region in second life. For ease, lets assume 60% are Full and 40% are Homestead. That means $3,092,047 earned every month in tier. To make up the same income on $39.95 for tier Linden Lab would need 77,398 people buying 1 region or even less if some people buy multiple which at lower cost they could. If their numbers are true and they actually have 900,000 active users per month then surely, at such a low price, they could get 80,000 users paying for 1 region each.

If LL offered an AWS (not always on region) for $39.95, I know I would buy 2 and get premium as well (I got rid of my premium and region precisely due to LL price gouging). This would net them far more premium members as well as far more income tier wise as as it is available for more people. Add to the fact that it would probably amount to even more users and retaining them, it would increase concurrency and user retention as well as boost marketplace sales and other fee incomes to LL. Possibly even a new hype period for SL.

EDIT:

Not to mention the fact that most people pay more than $30/month when renting from land barons. Sure such a price reduction would impact on Land Barons however, if you take the figure that say each land baron has 8 subdivision rentals per region then rather than LL earning only 1 region tier from the land baron they could have the potential to earn 8 instead netting more income. Surely 8 direct region sales is better than 1 baron. 8x$39.95= $319.60 to 1x$39.95=39.95.

Edited by Drayke Newall
edited for clarity of pricing compared to kitely 16.
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8 hours ago, Drayke Newall said:

Then please explain how Kitely (which is one of those 'other grid platforms' you mention) manages their region costs so low.

But I am not arguing a Kitely vs Secondlife cost/expense ratio. Though Kitely does have some proprietary inhouse code, they for the most part use opensource server and viewer code that that has in effect 100's of thousands if not millions of hours of research, development and coding into them which they never had to pay for, unlike Secondlife had to at some point over the years and still continues to. Another aspect to consider is that what many Opensim grids have found is that as the grid concurrency grows, the hardware requirements to support it, grows exponentially. I will also point out that Kitely's prices in terms of the Opensim grids in general, is not the cheapest. Their 1 region price at 14.95 p/m is high in comparison to the average which I believe is somewhere around 8-10 dollars per month. (Kitely is probably well worth that extra expense though for most)

What this does though is validate my point that the hardware cost of servers is just a small part of what the total S/L tier is paying for and whether it is LL owned server farm or cloud based AWS, the difference in the end will be negligible in terms of individual sim instances though the total saving maybe worth it overall. I would suspect that the cloud based move is worth it more in terms of portability, convenience and a small reduction of the Labs workforce.

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16 hours ago, MoiraKathleen said:

It may be that server cost is a large part of their costs, but still it's just one part of the overall costs for overall operation, development and support.  I don't know that there is really any way to know that LL has been "price gouging" without knowing the full picture.

For the price of regions, LL is absolutely, unequivocally price gouging. I can get a virtual game server that supports 50 people for as low as 15 USD a month, with no setup fee. Even if you add a little more for LL since LL does do more than the typical server host, you're still looking at a markup in excess of 1000%. Over one thousand percent.

Even a full dedicated server box, a good dedicated server, costs half of what a single SL region costs. I know, I have one. It's an i9 with 64 gigs of RAM and gigabyte per second Internet speeds, running Windows 10. I can RDP into it and run anything I want on it. At any given time it's running 5 different game servers with as many as 70 total players, a website, email host, and some Discord and TeamSpeak bots.

A box like that would be completely comfortable hosting quite a few SL regions.

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19 minutes ago, Paul Hexem said:

For the price of regions, LL is absolutely, unequivocally price gouging. I can get a virtual game server that supports 50 people for as low as 15 USD a month, with no setup fee. Even if you add a little more for LL since LL does do more than the typical server host, you're still looking at a markup in excess of 1000%. Over one thousand percent.

Even a full dedicated server box, a good dedicated server, costs half of what a single SL region costs. I know, I have one. It's an i9 with 64 gigs of RAM and gigabyte per second Internet speeds, running Windows 10. I can RDP into it and run anything I want on it. At any given time it's running 5 different game servers with as many as 70 total players, a website, email host, and some Discord and TeamSpeak bots.

A box like that would be completely comfortable hosting quite a few SL regions.

Where did you get the server software? Free?

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45 minutes ago, Paul Hexem said:

For the price of regions, LL is absolutely, unequivocally price gouging. I can get a virtual game server that supports 50 people for as low as 15 USD a month, with no setup fee. Even if you add a little more for LL since LL does do more than the typical server host, you're still looking at a markup in excess of 1000%. Over one thousand percent.

Even a full dedicated server box, a good dedicated server, costs half of what a single SL region costs. I know, I have one. It's an i9 with 64 gigs of RAM and gigabyte per second Internet speeds, running Windows 10. I can RDP into it and run anything I want on it. At any given time it's running 5 different game servers with as many as 70 total players, a website, email host, and some Discord and TeamSpeak bots.

A box like that would be completely comfortable hosting quite a few SL regions.

My point was that what LL charges for land - be it mainland or a private region - is part of their overall income stream, and so it is likely that the income stream contributes to/funds other parts of the overall SL operations, development and support - there is more involved than just a server hosting a region.        

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2 hours ago, Arielle Popstar said:

Where did you get the server software? Free?

Windows 10 is server capable. Cost of the license was included in this case. Some providers charge a one time fee for Windows to be installed.

2 hours ago, MoiraKathleen said:

My point was that what LL charges for land - be it mainland or a private region - is part of their overall income stream, and so it is likely that the income stream contributes to/funds other parts of the overall SL operations, development and support - there is more involved than just a server hosting a region.        

I accounted for that when I mathed out the 1000% markup. Otherwise it would have been closer to 2000% higher than their competitors.

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4 hours ago, Arielle Popstar said:

But I am not arguing a Kitely vs Secondlife cost/expense ratio. Though Kitely does have some proprietary inhouse code, they for the most part use opensource server and viewer code that that has in effect 100's of thousands if not millions of hours of research, development and coding into them which they never had to pay for, unlike Secondlife had to at some point over the years and still continues to. Another aspect to consider is that what many Opensim grids have found is that as the grid concurrency grows, the hardware requirements to support it, grows exponentially. I will also point out that Kitely's prices in terms of the Opensim grids in general, is not the cheapest. Their 1 region price at 14.95 p/m is high in comparison to the average which I believe is somewhere around 8-10 dollars per month. (Kitely is probably well worth that extra expense though for most)

What this does though is validate my point that the hardware cost of servers is just a small part of what the total S/L tier is paying for and whether it is LL owned server farm or cloud based AWS, the difference in the end will be negligible in terms of individual sim instances though the total saving maybe worth it overall. I would suspect that the cloud based move is worth it more in terms of portability, convenience and a small reduction of the Labs workforce.

It doesnt matter who writes the code or support the software. Even if you take into consideration development cost, the example I provided more than substantiates that LL can charge considerably less than their price gouging at the moment. 

As I mentioned Kitely charges $39.95 for 16 regions. In my example I said LL could charge the same amount ($39.95) for 1 region and due to that cost decrease would be able to obtain more people renting servers.

You are argue that LL have more overheads, I dont argue that. However when LL (if they can get 80,000 users renting a $39.95 server) would obtain more income than they are generating now from tier. Given AWS is cheaper as Ebbe has shown and also Kitely they could easily make more money than they do now IF they charge less opening the land to more people.

There is a reason china is becoming the new economic power, because they can charge less due to lower overheads and provide that onto their customers. LL can do exactly the same by charging less of their service and providing those savings back to their customers which will increase more people coming to second life due to that earning them even more.

We know LL tier is the only main income they have so providing it cheaper and to more people will cover their hosting with AWS as well as any of their overheads.

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2 hours ago, Drayke Newall said:

We know LL tier is the only main income they have so providing it cheaper and to more people will cover their hosting with AWS as well as any of their overheads.

Sadly that's not how F2P model works. While SL is not your average F2P game, or much of a game in general, the similarities are there. Why those companies sell skins/outfits/perks/portraits/voice lines etc for what they do when they don't cost them anything after they are created and essentially are "just pixels" that you unlock for your account? Because they can and price is carefully calculated by their marketing teams. There has been countless research and stats about how "whales" make up for the 50-60% of the revenue in most F2P cases, while being 0.2% to 1% of the total population. There are some exceptions here and there, but not too many.

That's why F2P games are ridiculously priced in most cases, too. For example Hearthstone (f2p ccg) would cost you over 900$ a year if you wanted a full collection, while most expensive "bundle" for 80$ that is released before every expansion won't give you even 1/3 of the collection. You'd think they would make more money if they sold it for 20$ and had way more people buying it, but nope, they didn't change their model and keep making some serious cash, because whales buy it all anyway.

To be clear - I don't argue about LL regions being overpriced. They are. And there was no tier decrease this year either after at least some decrease on the previous two, which did disappoint me greatly. They didn't even mentioned anything around SLB time, in any blog post or meetings with the community. I'd very much like to pay way less than I do now, and if price would be something like you said, I would expand to more than just one current region I have since I always have more ideas and themes I'd like to build, while I also don't want to destroy what I already have.

I suppose it would either kill or seriously hurt the dreaded "land barons", though. If regions would be much cheaper, then parcels would have to priced accordingly. Maybe a lot more people would get interested in renting then, if something like 1/4 of the region would only be 15$ a month, but even in that case it would mean those land barons gotta do 4-5x amount of work for the same income. Cleaning parcels after people moved out/stopped paying, putting them back on sale, solving issues with neighbors, just managing 4x more regions in general. And LL sure loves their big landlords who keep paying tier regardless if regions/parcels are rented or not, so they probably don't want to cause them any issues.

Edited by steeljane42
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2 hours ago, steeljane42 said:

suppose it would either kill or seriously hurt the dreaded "land barons", though. If regions would be much cheaper, 

Not so much, margins are already razor thin .. lower base prices would give a lot more wiggle room and lessen the incentives to pack people in as tightly

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Quote

You'd think they would make more money if they sold it for 20$ and had way more people buying it, but nope, they didn't change their model and keep making some serious cash, because whales buy it all anyway.

But as you said, Second Life isn't your average f2p game therefore their business practices are entirely different. This is basic business 101. Second Life users DESIRE land. It is the primary thing every person in Second Life wants and needs. You need it for building, socialising, rezzing, opening bought objects, having fun, retention, making money - EVERYTHING. Other games make their money precisely because all profit goes to them therefore they rely on those whales and the user for that. They don't need to reduce their prices as those items are priced as such because people want them and research shows that that specific price is what people are willing to pay for it.

It is business psychology. If I charge $10 for something a person may hum and ha on whether to buy it. If I charge $9.95 for that thing the mind sees it as a bargain as it is under $10. It is less and earns less per item but increases sales and therefore increases profit. It is specifically priced for the market and knowing what people are willing to pay for it.

Linden Lab's ONLY real income (100% profit) is land. The difference is research, evidence, everything points to users being unwilling to pay for it due to its enormous cost and therefore this affects their revenue as they refuse to reduce it. The primary userbase is basic f2p users who want land but cant afford the enormous cost so they rent from 1 person.

I think this is where you are missing my point with offering the land at cheaper prices entirely. Lets say a Land Baron has 20 full regions. Through this they give Linden Lab $4580/month ($229 each region) in tier, all of which is paid to the Land Baron (after his profit is taken out) by that Barons renters. Most regions are on (lets say) average divided by 10 by region owners (some even 16 and most include sky platforms giving the profit to the land baron and not LL, but we will go with 10). That means there are 10 people renting one each of those parcels and paying on average $35/month.

Now lets hypothesise that Linden Lab with AWS (not always on regions) charge less per region at Kitely's prices (as it is cheaper to run due to no server overheads and not always being on) however, because its Second Life and a premium system (they do all the programming work after all) over OpenSim Linden Lab decide that ONE full region will be on offer to anyone for $39.95 (Kitely's top charge).

Do you honestly think that those 10 renters per region paying that land baron for a 10th of a sim at $35 will not move to a full region for $5 more? Of course they will jump at it as they are getting MORE for what they are getting now and paying for a full region that used to cost $229/month for under $40 close to what they paid for a 10th - its called incentive, something Linden Lab have never offered. Most people only pay for small parcels because they cant afford to pay for a full region.

Lets assume for now that all 200 of those renters from those 20 regions buy a full region at the new wonderful price of $39.95. This of course will tick the land baron off and he may leave SL for good, however it will not matter to Linden Lab or the renters as both have made a substantial amount. The renters get more for less whilst Linden Lab by offering land for CONSIDERABLY less than they do at the moment, now will make $7990USD/month that's an increase of $3410USD/month over what they would earn at the moment with their current prices.

Even if not all of those 200 renters change to a full region, Linden Lab still come out far better than they would now. Not only do they make more profit, but due to more people having full regions, more is spent in the marketplace and upload fees to decorate that region and more people will invest in SL as they can build multiple region RP sims, game sims, skill sims, themed forest hangout sims, the sky is the limit as regions are more affordable and cheaper for LL to run.

Now you said specifically "You'd think they would make more money if they sold it for 20$ and had way more people buying it, but nope. Based on the above and keeping in mind SL is no where near the equivalent to a f2p game like you seem to argue it is, do you honestly think Linden Lab wouldn't make more money for charging less? Retain more users for offering more? Inject more life into SL for offering region diversity? For every baron security Linden Lab may loose triple the regions they will make from other people that are average joe basic users.

Edited by Drayke Newall
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On 12/29/2020 at 2:52 AM, Drayke Newall said:

we hope to pass that on to customers."

I'd like to know what they're going to pass onto us and call "savings".

Also, you think corporate greed will allow passing up the chance to milk consumers, who are already (relunctantly) willing to shill out over $100(renting) to $200 (owning) for a region, for every penny they have?

There currently is a high demand for regions so why would they drop pricing now?

Edited by Lucia Nightfire
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12 hours ago, Lucia Nightfire said:

I'd like to know what they're going to pass onto us and call "savings".

Also, you think corporate greed will allow passing up the chance to milk consumers, who are already (relunctantly) willing to shill out over $100(renting) to $200 (owning) for a region, for every penny they have?

There currently is a high demand for regions so why would they drop pricing now?

Oh I agree. I don't believe Linden Lab will ever reduce region costs to something as low like $40 even if they could as they just don't get that it would increase every aspect of SL and their profit. They as usual are happy to stay with the status quo as they have done for over a decade like with everything else from feature requests to them not even providing more scripting options.

It is the reason why Second Life doesn't grow and never will. It will stagnate around on life support of existing users as it has done for years. Sure the sky wont fall or second life probably wont die for years (unless the new investors want it to), but it will never be anything more than it is now unless Linden Lab actually move out of their comfort zone to reduce tier substantially.

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