Should LL reduce tier prices and maybe act to save popular sims?

[Myra Wildmist]

After being in SL for almost 9 months, I'm just now beginning to gain some understanding of land, so forgive me if I have some newb misconceptions on this topic.

I'm a big sim hopper. I love to explore and discover new sims. I've noticed, though, that while sims come and go, it seems more sims are going, and sometimes very enjoyable sims. That's fine to a degree: If your sim isn't getting visitors, maybe it's just not meant to be. But what about popular sims, sims which seem to get a lot traffic? (e.g. I recently read about the Lost Gardens of Apollo closing down. http://nwn.blogs.com/nwn/2011/06/second-life-sim-deathwatch-lost-garden-of-apollo.html)

It seems to me, I've seen a fair number of sims pull up stakes and close, just in the few months I've been here. Is this normal? Or is it the bad economy combined with the tier pricing that's causing this?

The whole land pricing formula doesn't make much sense to me, frankly. For instance, everywhere I go, there almost seems to be more land abandoned and for sale than owned land. If that's so, then something is probably wrong with the way land is priced in SL. It kinda indicates there just aren't enough people buying.

It seems everyone would benefit if they lowered the tier pricing even just a little. More people might buy land, which would mean more money for the economy, and some of these sims would stick around a little longer if it wasn't so expensive for them.

Am I on track about this? Is there something I'm missing? (Very possible.)

 

 

[Faithless Babii]

The Lost Gardens of Appolo...had a huge amount of traffic yet closed...why? They failed to utilise that traffic in a way to pay sim tiers Id guess.(do you ever leave tips for those sims you explore on? Or buy anything they have to offer for example?) There was a big discussion about this (somewhere ) a while ago...so reducing tier wouldnt really have helped if people dont use the traffic they have to make ends meet?

Dont forget that some people just do tire of the "hobby" of owning a sim...and go off to do other things.

 Then you have sims opening with little or no business plan, just  hoping to make a stab at collecting rents, or selling enough to make the tier..reducing tiers "a little" wont help them either. Eventually they will not want to pay the tab and close up shop.

It is possible to own a sim and make it pay, it takes work and you have to be prepared to be flexible and keep up to date with trends.

 

[Chronometria]

It's true that there is so much legacy abandoned land around that it just cant be released without causing armageddon. On top of that there are numerous forgotten or closing sims. The prices are very high and this is hard on the interesting sims, like roleplay sims, which would do well on a homestead.....but which cant buy one without a region.

 

Personally, i would be happy if the legacy abandoned land was released en masse. Then we could buy it, pay tier to the lindens and rebuild the regions that are currently just wastelands. Emptiness breeds more emptiness.

[nikita Jefferson]

More land is being dumped because its not needed,

With the 2D website to set up a shop and pay no tier,land is not needed,

If LL closed the marketplace right now and aside from the huge outcry, land would be snapped up fast ,land sales would sky rocket.

Why would anyone pay 295 US for an estate,(i  know the mainland is cheaper but its so laggy there i would never set up a shop ),when they can open a shop on the marketplace rent free and only pay the " sales tax " to LL on each sale

And if you dont think the marketplace is flooded with merchants with shops ,try searching skins,you will have to wade through 6000 pages and dresses 13,000pages

I have a homestead,rent is reasonable,much better than 295US a month,i use it as a home and have my shop 3000 ft up so i have the best of both worlds,a shop and a private island

I check my visitors list every day and although visitors are low because of our terrible search,i would say 70% of my visitors are new bees,we get a an awful lots of 0 day olds,i wish LL would give new bees some money when they join,we would do good.,i think we get a lot of new bees because they have just joined a 3D world and want to explore it,probably later they will visit the marketplace but for now they want to do what they joined for,see Secondlife

Of course there are many reasons land is in the decline but i think the biggest reason is land is not needed anymore for a shop,evryone is moving their shops onto a 2D website away from the 3D world that SL is

[Myra Wildmist]

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Faithless Babii wrote:

The Lost Gardens of Appolo...had a huge amount of traffic yet closed...why? They failed to utilise that traffic in a way to pay sim tiers Id guess.(do you ever leave tips for those sims you explore on? Or buy anything they have to offer for example?) There was a big discussion about this (somewhere ) a while ago...so reducing tier wouldnt really have helped if people dont use the traffic they have to make ends meet?

Dont forget that some people just do tire of the "hobby" of owning a sim...and go off to do other things.

 Then you have sims opening with little or no business plan, just  hoping to make a stab at collecting rents, or selling enough to make the tier..reducing tiers "a little" wont help them either. Eventually they will not want to pay the tab and close up shop.

It is possible to own a sim and make it pay, it takes work and you have to be prepared to be flexible and keep up to date with trends.

 

---

Good point, Faithless. But I don't think every sim needs to be about making money and that's maybe part of the problem. Would if make sense to give a price break to sims that benefit the sl community? 

I do tip and buy, but I'd bet I'm in the minority. One thing about tipping, though... I don't think most of the people who wander through sims have any idea how much a sim costs. I know I started tipping a little more when I realized that.

[WADE1 Jya]

Slashing price of sims could end up being a negative effect. The action infers sims are less valuable -- or worse yet infers they are losing value as a product.

That said a small decrease might be appropriate as anyone who knows a little of the technology knows that in the business of data hosting, serving up our sims, Lindens enjoy steadily decreasing costs on their side of things (unless they are doing everything very wrong).

All technology trends to become cheaper, this is the fruits of innovation & progress. Passing on these savings to the customers would be a nice move to increase customer loyalty & show kindheartedness.

Of course it would make at least a few residents very angry too!

Whenever Lindens do anything, some people will always go into a rage :matte-motes-big-grin-squint:

[Poenald Palen]

Maybe they have a "critical failure" sort of indicator or meter. Sort of lets them know they are reaching a decline into spiraling-no-return that they keep an eye on? This level is not hit anything serious yet? Or, it did. That is why many hypothesize that the previous CEO was hired. This is a situation where the new shiney product that cought many peoples eye just didn't take off to the levels they thought, wished or otherwise where preparing for...at the present time. But, after identifying the barriers to acceptance, and also taking into account not everyone has tried to use SL for all the reasons they might find it good because of various barriers....well, there is still marketshare to explore and go after IF the barriers are removed and the product can have added abilities.

SL thought they would scale and the servers bust...they sort of did! The asset servers where on the blink, people got booted and concurrency was higher than it ever had been. I saw it go from around 30, 000 or so to 90, 000 or so during my time, other remember the old days maybe...sub 10, 000 people in SL at once. But this changed, many many people other than early adopters tried to use SL. I say "tried"  because many walked away. The reasons are so myriad...but that is partially irrlevent. One glaring fact was that SL didn't run on computer hardware commonly used. The Brain Balm study showed this, and this was right as LL was working on a corporate behind the firewall solution. This was seen as a mistake. But guess what? Most users had the same issues with SL. Doesn't work, can't figure it out and what is the point? This is all from people who would like to use it. Many others simply don't like it, it doesn't have the mass appeal many thought it might have.

Talkign of mass apeal...ths is another factor. Even IF the hardware issues where fixed, some products don't appeal to the general public for general usage, regardless of suitability to such. This is sort of growth phase type of explaination we see when people argue SL is now finding a new direction, it failed at mass appeal. The golden era was simply due to users that where now blocked. Gambling, banking and other odd schemes where stopped, anonymouse pornography usage stopped for some users..others where long gone and even in jail! So, people thought SL's "world" status means it was lawless....those people brought money to! But, the rest of the issue is that the product was tried and then it seemed to just not fit into thier daily usage. It sort of failed for those people on some level. Chat failure, difficult to use, expenses to buy items, or simply got boring to quick are all things that come to mind...but all my opinion based on what I saw and heard.

 People who study business sort of look  at products like Second Life and have seen a trend. A new product has a period where people all want to try it out, some might adopt it as a daily use item...but, it doesn't work out  for so many  and then user numbers stall or fall. This happened? Not sure, but many say yes. They feel Sl is searching for a direction. And, the technology is moving toward solving hardware issues and also merging with popular trends. We can see this with server side rendering and the mesh roll out going on. These both help to attract new users and old users who left. Not only that, but they also help to retain users who might have otherwise left if these technologies where not present.

I can make the argument for why these technologies do this, but I think it is obvious that 1. people don't have the hardware at all locations and 2. People don't want to waste time on sculpts and use more than one world or game engine in creation. There are more reasons I guess, but I will not even try to think of them all as these two points explain my thinking.

But there is one factor also. If you where to chart where the prices and power of servers available are, look at the augmentation of these hosting companies offerings by more and more advanced "cloud" services and add to this the amount of effort being put into online applications...well, you can see that SL server costs will be horribly overpriced and with so many competing services available it will be rather easy to meet SL's full offerings very quickly....all they need is people as they technology is inevetasbly getting cheaper and the virtual world offerings will have far more people behind them than LL has employees. If WebGL becomes more in use you will see some other players work thier way into a much more powerful position. So, take every penny you can is the idea...you can't stop the future, you offerings will take a huge reworking and this takes money and time...so make as much as you can to survive! This might be it, this might be the idea. Many don't like to switch, which is why some business can get more money as they sink because they know people are a bit lazy, distracted or figure they paid almost as much...so keep on going. Look at AOL's situation..they basically had some people who didn't know they could stop paying AOL! So, they paid it anyway!!! This might be the reason? Who knows.

 

[Phil Deakins]

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Myra Wildmist wrote:

Am I on track about this? Is there something I'm missing? (Very possible.)

---

Yes you are on the right track but, unfortunately, the decision-makers at LL are blind to it (or scared of it). There's another, probably better, possibility too, which is to make a lot more tier levels - much smaller tier jumps, so that people only pay for the land they have, in, say, 4k jumps.

The thing to do is not expect anything good, or even reasonably sensible, from LL. Then you'll never be disappointed and, once in a rare while, you might even be delighted.

[Phil Deakins]

It's true that computers continue to become more powerful but largish systems like SL can't just change to new machines whenever the owners want to, because it's too costly. Huge systems like Google don't do it even with their money, and much smaller systems like SL don't do it because they don't have the money to keep up with more powerful machines. They all change once in a while but there's no way that SL can keep pace with more powerful machines.

[Peewee Musytari]

If the 1000s of "tourists" who love to visit the sims that people set up purely for their enjoyment, bothered to show their appreciation with a small donation, then most of them would not have to close.

The owners make awesome enviroments, they deliberately don`t add commercial elements there to spoil the theme & they open it up for everyone to enjoy & in most cases they end up covering the $295 a month themselves to keep it open.

If people visited equivalant type places in RL they wouldn`t think twice about paying an admission charge, but in SL they just use it without even considering throwing a few lindens to the owner to say thankyou & then moan when the owners dare to close it down.

[Faithless Babii]

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Myra Wildmist wrote:

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Faithless Babii wrote:

The Lost Gardens of Appolo...had a huge amount of traffic yet closed...why? They failed to utilise that traffic in a way to pay sim tiers Id guess.(do you ever leave tips for those sims you explore on? Or buy anything they have to offer for example?) There was a big discussion about this (somewhere ) a while ago...so reducing tier wouldnt really have helped if people dont use the traffic they have to make ends meet?

Dont forget that some people just do tire of the "hobby" of owning a sim...and go off to do other things.

 Then you have sims opening with little or no business plan, just  hoping to make a stab at collecting rents, or selling enough to make the tier..reducing tiers "a little" wont help them either. Eventually they will not want to pay the tab and close up shop.

It is possible to own a sim and make it pay, it takes work and you have to be prepared to be flexible and keep up to date with trends.

 

---

Good point, Faithless. But I don't think every sim needs to be about making money and that's maybe part of the problem. Would if make sense to give a price break to sims that benefit the sl community? 

I do tip and buy, but I'd bet I'm in the minority. One thing about tipping, though... I don't think most of the people who wander through sims have any idea how much a sim costs. I know I started tipping a little more when I realized that.

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^5 for tipping...yes so many dont and then wonder why places close. However, I think if you do open a sim thats not a business you have to accept youre going to pay the tier yourself. (or at least the vast majority of it) LL used to give non profits & educational sims a discount...but I think they stopped it...not sure, I forget so much !

 

 

[Erwin Solo]

Processor performance has doubled roughly every 18 months for the last decade, and the cost of a decent processor box is lower than it ever has been. 

So if the Lindens are charging the same for tier as they were 18 months ago, their per-sim cost has dropped quite a bit.

Said another way, the cost to run one SIM three years ago will run approximately four SIMs today.  Yet, tier remains the same.  Therefore, if the percentage-occupancy of mainland is only one fourth what it was three years ago, it remains just as profitable today as it was three years ago, all things considered. 

 

[Pussycat Catnap]

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Faithless Babii wrote:

The Lost Gardens of Appolo...had a huge amount of traffic yet closed...why? They failed to utilise that traffic in a way to pay sim tiers Id guess.(do you ever leave tips for those sims you explore on? Or buy anything they have to offer for example?) There was a big discussion about this (somewhere ) a while ago...so reducing tier wouldnt really have helped if people dont use the traffic they have to make ends meet?

---

Nobody ever donates to a venue anymore, and with Marketplace, people don't shop in sim malls.

So, pretty much every entertainment sim in SL is a 'dead man walking' now.

 

[Pussycat Catnap]

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Erwin Solo wrote:

Processor performance has doubled roughly every 18 months for the last decade, and the cost of a decent processor box is lower than it ever has been. 

So if the Lindens are charging the same for tier as they were 18 months ago, their per-sim cost has dropped quite a bit.

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It doesn't work that way in the real world.

 

[Phil Deakins]

As Pussycat said, it doesn't work that way in the real world. Processor power may well have doubled roughly every 18 months but companies that use a lot of machines can't change them every 18 months or every few years. Imagine Google changing their thousands of machines every few years. It would be a foolish thing to do and nobody would expect them to do it. Likewise, nobody would expect LL to change their hundreds of machines every few years either.

Having said that, I believe that LL did change their machines a few years ago, and the change might have been an occasion to reduce tier, but processing power isn't the only thing that a company needs to consider when setting prices. It's only a part of it.

For LL to reduce tier, the projection must show that it stands at least a very good chance of either not losing profits or increasing them. An alternative to reducing tier is to make smaller tier jumps, which would also need to stand a very good chance of not reducing, or increasing, profits. Either of those alternatives would lose profits immediately, and it's a case of how quickly the current level of profits can be reached again, and whether or not the change would cause increased profits after that.

Imo, smaller tier jumps stands a much better chance than simply reducing the existing tier prices. For me, the tier jumps of 32k, 16k, and even 8k were much too big to take lightly, and held me back from buying more land for long enough, although I did get up to paying for 64k eventually, whereas smaller jumps (say 4k at a time) wouldn't have held me back at all, as I would have continually added whatever I needed or fancied. I would have got to 64k eventually but I would also have been paying more than I did along the way.

Incidentally, one significant Linden (Jack - manager level - now sacked) did push for lower tier costs, so it's not something that LL haven't considered. Because of business considerations, they may have been right not to lower them, or make any changes to them, but I don't believe so. If they ever do it, it'll be a difficult thing to do, because they will instantly lose a significant amount of profit in the hope that it will make the company more profitable in the not too distant future. It would be a major risk but making smaller tier jumps is a risk that I think is worth taking because, although it would immediately lower the profits, I believe that the ability to add land without major tier jumps would soon make up for it and, in the relatively near future, would result in higher profits.

[Moonlime]

Myra,

I second that! Very well articulated and so true

[Moonlime]

less demand naturally reduces prices and devalues land. It also indicates the need for a balance in the economy. I vote for lower prices and more ppl around.

[YT Upsilon]

If you like SL, and you can afford it, get a pro account.  That way you get 512 sqm of land thrown in, with a modest number of prims, a 300 L$ stipend every week, and LL gets some money to keep the whole thing going and growing.

I use SL to help people with their English (for free) and I really appreciate the beautiful sims - just been to Bora Bora beach - fabulous!  I use my stipend to upload pictures and sound files, but whenever possible I spend my money in the sims I visit.  I only resort to Marketplace when I'm looking for something specific or free.  I much prefer to look around a sim and find a great hat or scarf etc.  In the same way I prefer going to bookshops, than buying on Amazon, but maybe I'm just old. LOL

The fact is that I am in the minority.  I speak to lots of people, and only one of them spends money here.  I agree that if the cost of mainland land could be reduced and the number of prims increased there would be more takers.  If it weren't so expensive I would build a fabulous English school on the mainland, and I have so many ideas, but I'm limited to mooching around on other sims like Virtlantis.  

As for popular sims, maybe there could be an "adopt this sim function".  Where people who like a sim, can set up a Direct Debit for a small amount every month to keep it going, that way they get their name on a role of honour or something.  Or LL could take the really good sims over and ask for volunteers to run them.  For example: A team of students from the UWA have built an amazing Sim on the Aztec culture.  So much work has gone into it, but it's for a limited period.  I'd hate to see it disappear, when it could easily be tucked into a corner of a server for posterity.

[Erwin Solo]

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Phil Deakins wrote:

As Pussycat said, it doesn't work that way in the real world. Processor power may well have doubled roughly every 18 months but companies that use a lot of machines can't change them every 18 months or every few years.

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But it does work that way in the real world. Look around at the price structure of how web hosting has changed over the past several years, for example. Another example is the price paid for a fixed level of internet bandwidth service to your home. When SL was new, in the early 2000s, getting 120 kbps (0.120 Mbps) DSL speed to my home cost about what I pay for 16 Mbps now for FiOS service. Here in SL, the effect is seen in lower occupancy rates as tier remains constant. I didn't get into processor virtualization, but that applies if someone has the time to type all that.

 

Your statements about hardware inventory management seem to be about protecting sunk cost. Another real world issue is that the first rule of economic alternative analysis is to ignore sunk cost. That's a real life analysis rule that is used in every serious real life economic analysis.

 

So yes, it works just like that in the real world.

 

[Phil Deakins]

No it doesn't work like that. The hosting you mentioned is one of the most competitive things to do with the internet, and competition for it is fierce, so its prices are not a good parallel. It's the same with ISP costs. A much closer parallel is major search engines, such as Google and Yahoo!. They run thousands of not-up-to-date machines and they run pefectly well. They will change them over time, of course, but they don't, and can't, try to keep all their machines up to date with the latest machines just because newer/faster machines exist.

SL is the same in a smaller way - hundreds of machines instead of thousands. The owners of such systems cannot simply update all the machines every 2 or 3 years. What they do is use the latest machines when new machines are needed, and retire older ones over time as they break down or as they become too old. I have no doubt that that's what they do.

We used to have different classes of sim servers in SL - newer and older machines - class 4s and class 5s, with class 5 being the newer/faster ones at the time. LL slowly retired class 4s so that all sim servers were class 5s. After that, there were no stated classes, presumably because even newer/better/faster machines were available and LL used those when new machines/sims were needed. Keeping the class system would have meant we had class 4s, 5s, 6s, 7s, etc., all at the same time. That would have been difficult to operate because sims were put back onto the same class of server following a restart, but sims are never intentionally put back onto the server they were on before the restart. It would also have made it a bit silly for customers when buying and selling sims. So sim server classes were done away with.

Large systems, such as SL, and huge systems, such as major search engines, can't keep all their machines up to date. The best they can do is change slowly, over time, by using new machines when additional ones are needed, replacing old ones with new ones as the old ones break down, and, once in a while, replacing a chunk of old ones with new ones. That's the reality. Keeping all the sim servers up to date with the latest machines would cost so much that it would put prices up - not down.

[Limonella Sorbet]

Artists are not always business people. 

High tier really forces us all to be shop keepers, or landlords, or live within our means. Funding our own art installation deprives us of real life needs otherwise and can only last so long.

When is the last time everyone put something in an artist's tip jar? When is the last time you tipped for beauty, and not just sex or product? There's your solution. If you want a sim to stay, pay.

[YT Upsilon]

I leave tips in places where I find free stuff (I love free stuff).  :-)

And  I found a very good way of getting people to tip in one sim I visited recently.  The tip jar said "Buy everyone in the bar a drink", you clicked it, paid 20 L$ and everyone got offerred a glass of red wine.  It's tipping, but innovative and fun.  (Just a thought.)

[Faithless Babii]

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Pussycat Catnap wrote:

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Faithless Babii wrote:

The Lost Gardens of Appolo...had a huge amount of traffic yet closed...why? They failed to utilise that traffic in a way to pay sim tiers Id guess.(do you ever leave tips for those sims you explore on? Or buy anything they have to offer for example?) There was a big discussion about this (somewhere ) a while ago...so reducing tier wouldnt really have helped if people dont use the traffic they have to make ends meet?

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Nobody ever donates to a venue anymore, and with Marketplace, people don't shop in sim malls.

So, pretty much every entertainment sim in SL is a 'dead man walking' now.

 Id have to disagree with you there, I tip and i know others do...and people DO shop in malls...I do regulary and many have stated on these very forums that they enjoy the whole experience of shoppping rather than the MP (or a combo of both)

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[Erwin Solo]

Who said anything about keeping all the machines up to date?  Given any time-phased distribution of machines, the ensemble average increases in cost-performance according to the trends described.

The real world works just like that.

[Phil Deakins]

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Erwin Solo wrote:

Who said anything about keeping all the machines up to date?

  Given any time-phased distribution of machines, the ensemble average increases in cost-performance according to the trends described.

The real world works just like that.

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You said it. Here is what you said:-

Processor performance has doubled roughly every 18 months for the last decade, and the cost of a decent processor box is lower than it ever has been.

So if the Lindens are charging the same for tier as they were 18 months ago, their per-sim cost has dropped quite a bit.

Notice the second paragraph. It pretty much states that LL changes their sim servers every 18 months. All I, and someone else, said is that it doesn't work like that in the real world - and it doesn't. Now you're talking about "time-phased distribution of machines" and "the ensemble average", which you only came to after I'd explained the realities of large systems like SL.