Infrastructure Investment Update: Buy/Sell Fee Change and Land Pricing Effective Mar 6, 2023 DISCUSSION

[Love Zhaoying]

57 minutes ago, Rolig Loon said:

And there's where a forum discussion really breaks down. You and I can't tell what the Lab's business model looks like or how the numbers balance. We only see SL from a resident perspective; we have to make wild speculations about whether SL is a "cash cow" or whether wages and other business costs have been eating into their profitability the way that they have for other companies.  With nothing but gut reactions to go on, I don't see a good way to decide whether decisions like these make sense or not.

Yep! If they (LL) were a publicly traded Corporation, it would be different.

[Caeruleiae]

1 hour ago, Rowan Amore said:

So...how would you (the general you) propose LL increase revenue?  They are, I assume, not a non-profit business.

Go for quantity over quality. Lowering prices across the board for land ownership-even though we all know no one really owns the land, or even just changing the rules around it, will lead to more land ownership. It's a proven tactic that has worked for a very long time in many facets of life.

Lowering the prices will make land more affordable for more people. That in turn will bring in more overall revenue. Selling 1,000 things at $100 will get you $100,000, but selling 5,000 things at $50 will get you $250,000. That's just a random set of numbers, but the same applies with any others. The fees ll pays in server costs will not so be increased as to reduce that $250,000 in a significant way that they will not come out ahead. Yes, Amazon services are not necessarily cheap, we use a lot of them too for a much bigger company than ll has. No point in acting as if ll isn't already paying for the server space-not really space, but going technical seems pointless, lol, so at least they'll be profiting more in the end. Look at all the abandoned land ll is already paying to have on those servers. They aren't making profit off that land at all. I don't believe any outcries that they need to increase land revenue, when they're literally wasting a massive opportunity-willingly. I have read all these threads going way back about land and the costs and all the things ll has said about why they can't lower land fees. They're yanking people's chains, and people bought it, because they don't understand or don't want to-not sure, that ll really could lower land costs. They can, and be even more profitable. We have a lot of basically wasted server space being taken up in sl. It's being paid for, but not really used. That's the real money sink, why pay for that space if you don't intend to use it. I have seen land that's been abandoned for more than 6 years. That's 6 years of payments for absolutely nothing. That's lls fault, not the grid's. 

Sorry that paragraph ran away with me. This next idea here won't sit well with land barons, probably, but it's also a viable option as far as increasing revenue for ll, and I don't really think they care enough about land barons to not consider it. I know that sounds harsh, but it's true. They've proven they don't really care.

They could also change the rules around land ownership. Don't hide individual parcels behind the premium paywall-could still keep full regions or parcel sizes beyond a certain amount, or apply any number of other rules. Open land ownership and payment up to everyone and allow any and all to pay for that land ownership with $L and not USD. That will create an influx in interest for land, again a good use for abandoned land, and open up more opportunities for creators, merchants, maybe even land barons can find a way to make it work better for them. There will still be people who choose to rent, maybe not as many, but maybe that's the route ll and sl needs to take now. If it's overall revenue we're concerned with, specifically ll's revenue, this is a viable, even if not necessarily wanted, option. Ll's investors would have already suggested this though, knowing their background and financial knowledge. The fact that they haven't done this, tells me ll's revenue isn't hurting as much as some might like to think or ll behaves. 

I don't necessarily like all of the second idea either, even though I could probably benefit from it personally since I'm not a land baron and it wouldn't negatively affect me at all. I wouldn't want to harm the existing land owners and rental companies and things like that. I only pointed it out as an obvious option that I am very sure has already been brought to ll by investors. If it hasn't been brought to them, those at ll and investing in ll aren't very bright and probably need to bring some people in who are, lol.

1 hour ago, Rowan Amore said:

We all want different things as far as the infrastructure of SL is concerned which involves hiring people.  That costs more money every day.

If this was all really about increasing revenue for ll so they can hire more people, or do more things, they'd be putting a modicum of intelligence behind their ideas. So far, they've failed. These changes aren't as viable an option for that as it might seem. It definitely won't increase their revenue long term-even if does temporarily short term. Long term is way more important and to get there, go back to my first idea. If they don't start putting out ideas that provide long term solutions to problems, it means they aren't thinking in the long term. That's vert sky is falling I suppose, but it's true. Only companies that don't intend to exist in the long term think entirely in the short term. 

[Rowan Amore]

5 minutes ago, Arielle Popstar said:

Those things went up because of political decisions and policies which LL is not subject to. 

Yet they are also paying more for all of those things as are their employees.

[Scylla Rhiadra]

4 minutes ago, MoiraKathleen said:

While it will be a little bit more money to buy L$'s in the amount I usually buy, I don't see that affecting my L$ buying habits.

I'm sure a lot of people will respond this way, Moira. I'm not sure it's going to impact upon my spending habits either, to be honest.

We go through this pretty much any time that LL increases the price of something -- there is a great deal of wailing and gnashing of teeth -- but most of us adapt, absorb the additional costs, and carry on.

But that's most of us. There will be creators who will leave because of this, or downsize. And there will be people on fixed incomes, etc., who buy less. And even if, on the balance, it all "evens out" on LL's spreadsheets, that's a rather sad thing.

For what it's worth, I'm glad to hear that you (and I) are not among that number.

[Love Zhaoying]

When was the last time any Second Life fees / prices / tier fees went UP - besides any "cashing-out" fees pre-or-post Tilia? This new L$ purchasing transaction fee may be the first increase that affects "everyone" (because it includes "L$ purchasing fee" increases) in quite a long time. 

[steeljane42]

52 minutes ago, Dutch Mainsail said:

Just wondering though… aren’t lower land prices supposed to sell more land?

They are not that lower to sell much (if any) more land. Those who already have it will continue to have it, just for a bit less. Those who don't... well, it's really not that much of a difference. Assuming someone rents 1/4 of the full 20k li region and land barons will actually reduce their prices as well. It'll be 5$ less a month. Smaller parcels will have even less of a change. Hardly enough to motivate someone to get some land if they didn't had it before.

At best it may keep a few people from dropping their already existing full regions, because it's pretty much a "free month" compared to the previous prices.

Now if it was a big decrease, say to 100-120 range for the full region, then it would sell more land indeed as a lot of the current homestead owners would want an upgrade (although assuming homesteads would be 50-60 then, some would prefer to lower their fees and just keep a homestead).

27 minutes ago, Rowan Amore said:

This is probably the best solution.

I would argue with that. First of all there's way too many different people in SL who prefer completely different activities and value different things. You said you saw the value in land, while for me mainland is worthless, they could offer 1/4 of the region to go with it, I still wouldn't take it for my own use (could be worth taking for the rental reasons, but then market would get flooded with similar offers anyway).

Heavy shoppers have some use for the 140 groups and extra slots at the full events in the opening days, casual shoppers don't really need it as much, and those who buy a new outfit once a decade don't need it at all. Free textures/animations upload have some value to creators, a bit of value to just people who like to take pictures, and are worthless to those who rock their 2007 profile picture to this day.

I believe most of the perks they can think of will be about the same thing and it's really difficult to make  PP any more attractive. Not to mention there's a very thin line between introducing actual new perks without taking away from the base/basic experience. I still remember the outrage when they tried to take away free group slots, and I'd say it was rightfully done.

Basic users doesn't mean "freeloaders" after all. Thankfully premium is not needed to own a region or to buy L$, so I had premium exactly for a month when it was needed to change the username. If I'll ever feel like I'm being forced to get the premium, because basic experience became worse while they still continue to take the same amount of money for my region (which is far more expensive than the PP) and L$ purchases, then I'll consider abandoning my region.

I'm quite sure LL thought a lot on those matters too, and this is why premium/PP are exactly what they are today, it's very difficult to balance making them attractive, yet not taking away from the base experience. It's just "more of the same" so far.

[Arielle Popstar]

13 minutes ago, Rowan Amore said:

Yet they are also paying more for all of those things as are their employees.

Are they? Amazon increased their prices and the Lindens received a pay hike? You have have links for either? Those should be their 2 largest expenditures.

[BJoyful]

2 hours ago, chesse Vyceratops said:

Other metaverses have the equvialnt of free land and unlimited prim usage , lowering the price of land from 220 dollars to 200 dollars or whatever isn't going to encourage people to produce in-world experiences or games or whatever, its just going to make land owners spend slightly less while more and more virtual item creators move to different metaverses becuase of fee increases

Other metaverses I have visited (OpenSim, Great Canadian Grid, Kitely and a few more I can't remember because they were boring, lonely and filled with really familiar looking things which seem to have come form SL... but I don't think the items appeared there with the approval of their Creators) have free land but usually with some kind of condition like log in every 30 days.  Kitely was the nicest of all of the other grids because it does have a MP of sorts.  However, I don't think SL will lose Creators to places like those because in SL when I'm online there's an average of 40,000 - 50,000 online and in the most popular of the other OpenSim grids there was 29 - 109 online.   Surely Creators won't leave a place where they are probably making a little money, perhaps just enough to keep themselves entertained in Second life, to go to a place with almost no economy at all.

Perhaps we should look at Second Life as a massive training centre for learning to create virtual goods.  The relative quality and quantity of goods, marketing, customer care, etc will reflect a working free enterprise system.  Customers will buy what they want according to their own agenda and there's not much LL can do to affect what a customer buys... except for the services LL provides to their customers.  The market will bear what it can bear.

I'm sure LL doesn't rip us off because they depend on us for their own jobs and they are much too smart and successful to kill the goose that lays the virtual golden eggs.

Virtual goods IS the future and everyone in Second life is leaps and bounds ahead of all who aren't in Second Life yet.  We're going to be Lindenillionaires because we are the virtual life pioneers! 😉

Edited March 7, 2023 by BJoyful
sp

[Coffee Pancake]

5 minutes ago, BJoyful said:

We're going to be Lindenillionaires because we are the virtual life pioneers! 😉

We're more likely to die from whatever is eating us badly enough to need a virtual world.

[Caeruleiae]

3 minutes ago, Coffee Pancake said:

We're more likely to die from whatever is eating us badly enough to need a virtual world.

Dysentery

Just like the Oregon trail

[EliseAnne85]

13 minutes ago, BJoyful said:

We're going to be Lindenillionaires because we are the virtual life pioneers! 😉

Are you hinting at something?  Just a yes or no will suffice. 

[BJoyful]

1 minute ago, Caeruleiae said:

Dysentery

Just like the Oregon trail

I wonder if the Donner Party also had dysentery before they... well, you know.  I'd like to make my reservation to sign up for The Matrix before I get dysentery!  😜😉

[BJoyful]

1 minute ago, EliseAnne85 said:

Just a yes or no will suffice. 

yes

[Rowan Amore]

58 minutes ago, Arielle Popstar said:

Are they? Amazon increased their prices and the Lindens received a pay hike? You have have links for either? Those should be their 2 largest expenditures.

Actually, yes.  In the last year, all cloud based service.prices have increased after being low for several years.  Rising energy prices for Amazon, Google, etc who power those clouds and uncertainty about geopolitical unrest, especially in Taiwan, mean prices go up down the line.  Oz even said at the beginning, it ended up costing them more than they thought it would.  I'm certain the price has gone up and not down from there.

https://analyticsindiamag.com/the-rise-in-cloud-prices-is-now-a-global-threat/

https://www.spglobal.com/marketintelligence/en/news-insights/research/major-cloud-providers-and-customers-face-cost-and-pricing-headwinds#:~:text=Global energy inflation and European risk Rising energy,years of price drops in cloud computing services.

Edited March 7, 2023 by Rowan Amore

[Ceka Cianci]

[EliseAnne85]

13 minutes ago, Ceka Cianci said:

Vita Meata Megimen...tastes just like candy, too!

 

[Teresa Firelight]

For this post, I won't discuss how furious I am that they are not reducing grandfathered region pricing. 

What I will say is that either someone is very bad at math or there is a typo in their pricing for the new "feature" of paying for regions with L$. (I will give LL the benefit of the doubt that there is an error here rather than LL intentionally trying to deceive us about pricing.)

They say the price is a fixed 250 L$ per USD. But if you divide any of the L$ prices by the USD price, you get 275 $L per USD.

So, which is wrong?? is the price L$ 250 per USD and all the values in the payment table are wrong? or is it L$ 275 per USD and the explanation just above the table is incorrect? If they are indeed charging us L$ 275 per USD, I think paying by lindens is more expensive than cashing out the money and depositing it in your bank. 

Example: a full grandfathered region is $179.00 per month. The monthly tier according to the table is $L 49,225. If you divide 49,225/179.00 you get 275 L$ per USD, not 250. However if you go to the quick sell (market price) and type in 49,225 -- you get (before fee) 193.58 and after the fee is applied, you get $183.40. and 183.40 is more than the monthly fee of $179.

 

 

Edited March 7, 2023 by Teresa Firelight
fixed minor typo

[Quistess Alpha]

2 hours ago, Caeruleiae said:

Lowering the prices will make land more affordable for more people. That in turn will bring in more overall revenue.

if you want to get all economics 101, sometimes it works that way, sometimes it's the opposite. The "ideal" price is whatever makes marginal revenue = marginal cost. If the football league didn't give out underpriced tickets to select groups, the stadiums would be empty save for just a few seats filled by crazy rich willing to pay whatever it takes to get a seat at the superbowl.

As has already been mentioned, we don't have access to the numbers, so we can't know.

[chesse Vyceratops]

2 hours ago, BJoyful said:

Other metaverses I have visited (OpenSim, Great Canadian Grid, Kitely and a few more I can't remember because they were boring, lonely and filled with really familiar looking things which seem to have come form SL... but I don't think the items appeared there with the approval of their Creators) have free land but usually with some kind of condition like log in every 30 days.  Kitely was the nicest of all of the other grids because it does have a MP of sorts.  However, I don't think SL will lose Creators to places like those because in SL when I'm online there's an average of 40,000 - 50,000 online and in the most popular of the other OpenSim grids there was 29 - 109 online.

By item creators moving to other metaverses i meant more like VR Chat and Roblox, Like VRChat where people are selling premade unity avatars for 30+ dollars or sell commissioned ones for hundreds or for roblox where ROBLOX takes a like 70% fee of your clothing sales but you can still make thousands if not hundreds of thousands of dollars becuase theres so many users.

Edited March 7, 2023 by chesse Vyceratops

[Flea Yatsenko]

Some of this seems silly. LL is leaving a lot of money on the table just from having SLMP search be in a bad state. No one buys things if they can't find what they want and creators don't make as much because people aren't buying as much. Kind of sad, I was hoping the change they announced a while ago about shifting LL revenue from land to other means would boost content creators and LL at the same time.  I wouldn't really care about the increase if I saw increased sales volume because they made some sort of huge improvements to SLMP to make buying and selling on it more enjoyable. But the last few weeks have been people complaining about SLMP having problems. And it has been having problems. I think this was very poorly timed at best as there's a lot of content creators who are feeling the pain from the poor relevancy of SLMP search and to tell them their fees have gone up at this time wasn't very well thought out.

Really feels a little unfair, I'm not going to see any benefit from the land price changes yet I'm going to lose some income to make up for land prices being lower. I'm not one to usually complain, and an extra 2.5% isn't going to be the end. In fact I lose far more than 2.5% income from SLMP being broken, SLMP search sorting being completely messed up, and there being billing/maintenance problems. I'm ignorant of a lot of inner LL workings but I think they could make that money up much easier by letting SL not be broken so much

[Caeruleiae]

29 minutes ago, Quistess Alpha said:

As has already been mentioned, we don't have access to the numbers, so we can't know.

Nope, but someone who also uses the same Amazon services ll does, on an even larger scale can tell you that ll's costs aren't as high as they might be trying to tell people. Even though costs have gone up, they're far more reasonable than some people suggest. We got hit with the increases in costs too, we didn't pass that cost down to customers. We have people that are really good at their jobs, though. Someone who also uses those same services can tell you that purchasing such services and then not using them properly, is a massive money sink that ll is creating for themselves and were even before they started using the services when they had actual physical server farms. 

So, yes sometimes it's just a guess in theory, it's not for me. I know they're wasting a lot of money, and a lot of paid services for absolutely nothing whatsoever. If they're losing money on that, it's completely on them. They have options to increase their revenue without costing their customers anything at all, and actually improving the experiences of their customers. It not only could increase interest in the whole of sl, but it would. It's not a tactic that is unproven, it's just one ll isn't taking, for whatever reason. Those reasons are the information we can't know. Ll's costs aren't as unknown to everyone. They are essentially leaving utilities on and running at full force on properties that aren't being used. That is an actual fact that can be known by everyone. We aren't costing them more, they're costing themselves more lol. 

[Crim Mip]

As usual, people will ignore the nice lowering of sim prices and complain about a small increase in transaction fees as if it were the end of the grid. It would be less than a $5 difference for all of last year for me had the new rates been in effect. In the end it won't matter because it's a done deal.

[Coffee Pancake]

2 minutes ago, Crim Mip said:

As usual, people will ignore the nice lowering of sim prices and complain about a small increase in transaction fees as if it were the end of the grid.

How many "sims" you got ?

[bigmoe Whitfield]

I think what people do forget is that aws is not cheap to host with, nor is having a floor on a datacenter like LL did in the past,  the fee's when they go up, LL has to figure out how to handle, best option is to hand them down to the userbase,  I'd hate to see what would happen if LL decided to try and eat all of them, betting they would be in the red so fast we'd lose SL.

[Coffee Pancake]

What we really need is bums in seats.

Knocking $20 off a $230 monthly spend does not do that.

Min maxing the fee structure to get closer to the benchmark 30% take does not do that.

Inviting people to speculate and debate the inner cost structures does not do that.