Linden Lab Betrays Consumer Market

Linden Lab has destroyed credibility with its latest surprise announcement to "jack-up" the prices on more than 50% of the grid's monthly fees. They claim their own incompetence in setting the void sim ("openspaces") features and their own mis-management as justification to bring monthly tier fees from $USD75 to $USD125. This poorly considered annoucement will send the hardcore SLers into panic. New landowners will feel very betrayed.  Frankly this step looks like suicide for Second Life.

Linden Lab has been touting its land "growth" for the last 5 months since Mark Kingdon joined as CEO. I called it a misleading charade when in fact the growth was a conversion of full to void sims--actually lowering the number of prims on the grid. I called it a bubble. But never ever, did I imagine that Linden was pulling a bait and switch move on the entire land market. 

From Jack ("jack-it-up") Linden on their blog: We will increase the monthly maintenance fee from USD$75 to USD$125 per month. This price increase will apply to all owners of Openspaces on January 1st as well as new purchases after that date. There will be no grandfathering of Openspace maintenance pricing.

But here's the real joke--the reason people like "openspaces" is because they get more virtual waterfront. In fact there is no water, there is no land--it is all digital info. A full sim now is $295/month to carry which is about $USD 18.44 cost thousand prims (CTP) per month. The new void pricing will nearly double the cost to $USD 33.33 CTP. So how much is the illusion of digital water really worth to anyone? Any suckers in the da house?

Linden Lab is making $USD 100,000's of thousands in profit per week--largely on selling void sims. Now they are cutting their own throats. If LInden made a mess of the void sims--they should eat it and not send their stupidity down the line for the land owners to absorb.

Who you gonna call? Well check your service-level agreement with Linden Lab--oops sorry you don't got one, so they can do as they please. What can SL land owners do? er...buy a parcel at Nautilius? Bay City?  Or del *.* and call it a day on the SL grid.

There will be many new choices for virtual world platforms in 2009. Linden Lab will only have themselves to blame for not being one of popular choices.

Disclaimer: We run 6 void sims now. We have had them since beginning of 2007. 2 are mostly empty and have been. 4 are used for art shows including Wizzy in the 8th Dimension, Viva La Vida and "Kill All Artists". We have never had any communication from Linden Lab that these sims were being over-stressed.

 

 

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Comments

SL is seeing its revenue

SL is seeing its revenue decreasing. They need more money from their committed users. But as you say, they'll see their revenue decreasing even faster now. I have been a long time content provider for SL, but since a few months I have switched to 3DXplorer. The reason for this is that the total cost of building worlds is much less, enabling more accessible worlds, both because I can make more worlds and build a mainstream business, but also because this Browser based, and download-free technology enables me building worlds which are totally imbedded into my customers home pages.

Absolutely dead on RaR.

Absolutely dead on RaR. Unfortunately. This announcement ruins any credibility Linden Labs had. Anyone that actually participated in SL would predicted the rapid growth and use of void sims and managed accordingly. A year ago at 1800 prims opensims were already being used for creative purposes outside the stated guidelines. Double the prims, make them easier/cheaper to get, and duh what did anyone expect? Raising prices on void sims is a desparate move to stabilize a collapsing real estate market.. a collapse brought on by LL dumping land to make money. LL is a business, to survive they need to make money, but they haven't figured out how yet and are only making matters worse. I enjoy the privacy of my void sim. I experience no performance issues. The lack of problems on Rezzable void sims is what convinced me in the first place. I guess with proper management anything is possible. With poor management, only failure. Ever thought of running SL RaR?

The sustaining cost could not

The sustaining cost could not only caliculate from prim numbers but Avatars on the region, assets usages, etc. So that CTP is not suit for measure.

But yes! Linden Lab should have been made some rule on "Abusing use of OpenSpace" at the first place. Without making clear guideline or SLA, how could they able to say "We want to raise your tier." :/

I hope LL reconsidering this matter and maybe this time, only introduce some restrict rules about Abuse.
 

They clearly have a load

They clearly have a load balancing problem, because although the voids have lower prim they can handle same avatar load as a full sim. Biggest issue with a void is the crossing point between voids, but from full to void isn't too bad. But er...duh we saw that last year, so why did LL increase the prim limits from 1750 to 3750? Answer: To make money on selling land to people with large parcels and kill the land rental market--so now they want to "jack-up" prices on the backend. And at the same time they are pushing their new Nautilus land...which has unfair competitiion practices and is cross-subsidized by the land owners!!!! Feel like a sap? sucker? dupe? You should. We all should. /me goes to puke

And where should you go now

And where should you go now dear friends? what's the alternate?

btw the Killallartists/Darkland-cemetery link is broken, just correct it up. :)

CTP (cost per thousand prims

CTP (cost per thousand prims per month) is sorta a base line number you are right Nock. I think then you should understand features availble in that sim--like avatar loading, physics performance, level of detail (LOD) on mesh. But why would CTP be double on a void than on a full region? Makes no sense. CTP on an OpenSim is a lot lower still--but of course the features available are not the same as on SL.

@peter, ty...link fixed and

@peter, ty...link fixed and that "kill all the artists" is really a cool show. Grab a shovel and dig near the tombstones to see stuff and the storm appear"

 I've just added an Openspace

 I've just added an Openspace sim to my full sim region and I'm not happy (see today's blog post - http://virtual-echattering.blogspot.com/ )

It is about time that Linden Lab started to think of those of us who pay them as customers rather than prisoners. I have to say that it is a while since I have seen such arrogant treatment of a company's customers. They address us as though we were the ones at fault. 

If you buy a sim which allows you to put 3750 prims in the space then what is the problem as to whether they comprise of trees or buildings? 

Hiking the price in such a way is dishonest, bad business practice and I think that they will live to regret it if they don't back track pretty smartish.

I'll keep posting and linking to other blog posts on this subject - just hope the rest of you do too!

While I am certainly more

While I am certainly more than a little annoyed by this move (Otherland is probably the estate with the most Openspace sims of all of SL), I don't think it was "bait and switch". The reasons cited by Jack for the price increase is not implausible: using the same server hardware for hosting 4 regions instead of one (even if this regions only carry 1/4 of the prims and scripts) probably does lead to increased network traffic and maintainance efforts.

Actually, the "new model" for pricing Openspaces seems sound to me and reflects their true value IMHO. But ... this realization comes AFTER the have sold thousands of regions under the old pricing model and after nearly destroying the land market for independent resellers. I have always been a huge fan of Openspaces and Otherland was the first estate wo offered them as a thought out product. It is total BS, that they are not fit for residential use. We have more than 100 in our estate and on average they do not generate more complaints about lag than our full prim regions - because we only market them for purely residential use. They offer a great value for everyone interested in beautiful scenery, wide landscapes etc. The raised price reflects this ...

What makes me very afraid though, is the utter lack of understanding of the market (of the economy of Second Life) with some of the decision makers at Linden Lab. It looks like they were really surprised that the new Openspace product sold as well as it did and did not anticipate the effect this has on grid resources and on the economy of SL. Or - in other words - Linden Lab changes a product B, so that it offers 4 times the land area for the same prim capacity at nearly the same cost as another product A and they are surprised that product B sells much better than product A?

This is scary. Really scary.

It makes me feel as if I am a helpless guinea pig in the hands of some guys, who really don't get it.

I just wish there already was some viable competition on the market (No, unfortunately OpenSim is not ready for prime time, yet). Competition usually leads to better management. I does not feel good to lead a business which depends on a company where business models are developed and changed by hackers.

/me sighs

This is trully a landmark in

This is trully a landmark in history of virtual world space--so I added it to dipity http://www.dipity.com/xantherus/Virtual_Worlds

@Dana--not sure you should

@Dana--not sure you should feel so charitable tbh. The grid has grown more than 50% in last 6 months while user acitivity is not. There have been increases in total user hours, but not that dramatic to justify doubling costs.  And what about all the money they collected for provisioning, converting thousands of sims--are they gonna refund that now?  And they are pushing more new land while the whole world is in financial disarray. Seems to me not just an honest mistake at hand here.

This is why I  gave SL the

This is why I  gave SL the middle finger last June. 

This is why I  gave SL the

This is why I  gave SL the middle finger last June. 

Added a group to Flickr to

Added a group to Flickr to document what may be lost to the grid when content creators are priced out of the land ownership market:

http://flickr.com/groups/openspacevoid/

 RaR, I'm with Dana that the

 RaR, I'm with Dana that the scariest part of this seems to be gross incompetence, poor judgement, and bad management.  I am not ready to go conspiracy theory on this yet.  Though the end result is the same.  When there is a better option my bags are packed.  Keep us informed.

The latest announcement by

The latest announcement by linden Lab will create another killing blow to the Second Life Realestate (e)Economy, the whole business economy and impact all residents directly or indirectly.

Again Linden Lab is screwing it's customers (the users/the residents), for sake of short term profit and change over sustained growth. I am getting angry now.....

At a time when Linden Labs should be increasing performance, lowering prices and growing, it instead shows it cannot support growth, its customers or a secondary market/economy.


In the past year servers have become cheaper and faster, technology across the internet has reduced costs of business, look at your phone bill, email & Amazon cloud storage costs.

Folks this is going to be a hard year, and not a time to raise prices or devastate a user base. Linden Labs has its business model ASS BACKWARDS and it's management is incompetent, lets be frank about it.

https://www.ftccomplaintassis

https://www.ftccomplaintassistant.gov/  File if you feel you have a complaint.  I have :)

Anon(by any other name would

Anon(by any other name would smell as swee)

You are encouraging people to file false FTC complaints.  Nice.  Thank you for waisting the time of the people at the FTC and taking away the time they should be dedicating to real claims.

If you bought an open sim and have been using it for purposes other than intended.  You have no room to complain.  All FTC complaints will be easy for them to respond to by simply pointing out the rules of use. 

The majority of these people complaining at those who bought openspace as something other than its intention.

If you really wanted to anon so they wouldn't ban you, you shouldn't go around replying as yourself on some blogs and anon on others.  If they ban your for encouraging false FTC report which they have to spend time and money to respond to then maybe you deserve it.

I've often thought LInden Lab

I've often thought LInden Lab was run by 15 year old boys...this doesn't dispell that notion.

Ask them most closely about

Ask them most closely about their own developments on Open Space Sims.  Look closer at the mainland development and their OWN use of Open Space with complex builds and uses on.  I have seen the Moles work and Linden Lab itself is flogging the a*se out of Open Spaces.

I am not an experienced user, but what are my alternatives?  Can I move to OpenSim or similiar in the next 4 months (will it be stable enough by then).  I am happy to leave Second Life Grid.  

If I was a large asset holder I would be quick smart looking to be public about my translation/migration plans to another trusted Grid.  Those guys hold the power surely, the sims made up of 60 islands and more. They have the community, the vendors etc.  

I am  happy to move to one of their communities as long as it was NOT on Second Life's grid.

 Nah, you would be FAR better

 Nah, you would be FAR better off contacting the BBB, they are much more understanding of Linden Labs complants, which is why you will NEVER be seeing a BBB approved logo on the Labs website within the next decade. Of course the Labs would likely retaliate inside Second Life. But I simply cannot wait for Jack's Office hours on Thursday at 11:00 SLT. It is going to be quite fun.

@RaR: I don't feel

@RaR: I don't feel "charitable". Its just an analysis of the "model" behind Openspace and full prim sims. They actually need more resources on the grid than 1/4 of a full prim sim. If this justifies such a huge price hike ... I am not qualified to judge. There is no need to look for sinister motives or conspiracies, though, when plain incompetency is sufficient to explain an event.

Still, what worries me is the totally irresponsible behaviour to constantly experiment with the SL economy (and society) by trial and error.

For the large majority of residents this does not mean much, though. So the boys at Linden Lab might get through with their "playing around" again. We, who try to do business in SL ARE just a small minority. And I am afraid, that even if we all leave SL there will always a next generation of get-rich-quick guys who did not make our experiences and who will "trust" Linden Lab ...

@Economic Mip, what's the

@Economic Mip, what's the BBB? (In dutch this stands for 'borst billen buik' .. 'breasts, ass, stomach'.. a fitness program.) As for the Jack Linden office hours, there has already been an 'emergency inworld meeting concerning openspave price change', a transcript on Flickr posted by Crap Mariner.

Yeah, this is the same

Yeah, this is the same concept as YOU and the Rezzable charging admission to your sims to fix your mis-management issues

@Anonymous--not the same at

@Anonymous--not the same at all. And btw Greenies, the most beloved area in the virtual world is free access now. We have two areas btw--one is a full sim and the other is a void--and we have never had a complaint from Linden Lab that we were over-stressing that sim.

It's simple. You are gullable

It's simple. You are gullable and not educated and Linden loves it. Jacks reasoning for the increase is quite flawed. Hardware is cheap, and I'll be damned if you ever have gotten any real support in SL. I haven't in the 3 years and two accounts I've been there.

There are multiple reasons I call his claims and reasoning "fraud/ bait and switch". First off, I can give details to exactly what the memory and hardware resource usage and requirements are. I may just do it and publish a publically available article and statistics. is for hosting a sim. I assure you their hosting service bullshit is their money maker.

If you want an education in what it really takes, lease your own server and compile opensim. Seriously. It takes 2 seconds to change the name of a simulator. What was the charge for just altering the name of a simulator in SL?

Think about it.  Every charge they have is bogus. You agree to pay most of the operating costs up front with outrageous setup fees, then turn around and pay monthly fees. The hardware requirements that LL describese needed for hosting even 45K prim is inaccurate. My guess, they don't tell you the truth about what they are hosting the sims on. That is the only reasonable assumption I can make with the reasoning the choose to use when bending you over.

 

 

I agree with what you're

I agree with what you're saying Anon, I build servers for a living and compared to web hosting this is ludicrous pricing.

However, you have to remember that opensim is a reimplementation of SL protocols - a much better version of SL's own server whose code has not been released.

SL wasn't originally meant to be what it is - it veered in this direction, as many startups do, they start as one idea but become sucessful as something else.

So yes, I agree their hosting costs are very bad, but may just be because their server code sucks very badly (it's even apparently single threaded!), which is no excuse.

I suspect LL will simply adopt opensim longterm - it's modular and well thought out, a much better product - even IBM are helping to develop it.

LL is practicing it's

LL is practicing it's business model on live patients. Sooner or later - probably sooner - they are going to kill their business. The pricing screwups over the past 30 months are jaw-dropping.

I too am experimenting.  Fortunately I have never made the mistake of owning land, and now never intend to. What has been learnt can be taken to other virtual worlds.

my summary of why this is

my summary of why this is such a disaster for Second LIfe:

* Dead Brand--Linden is in denial that SL is a damaged, beyond repair brand and has been clinging to "land mass growth" as proof that it is "more relevant" as CEO Kingdon claims. In fact a major part of the land mass growth (which is nonsensical thing to measure in a virtual world anyway) is the conversion of full/parcels over to void sims. So now the curtain is open and the Kingdon has no clothes. See his comments that I caught at the VW London conference.

* Cashflow Crunch. Money for nothing. LL has been grabbing fees for new sim set-ups like spider monkeys drunk on mountain dew. So now that party is over big time, so where is the cashflow coming from in Nov?   And people will start dumping sims which will hurt the recurring monthly fees. I was thinking of dropping a few sims as traffic is stil flat. Now I will convert the voids to full and compress them onto levels. Net net, we will drop 2-3 full sims before end of the year. My guess is that Linden could see 10-20% of it's land mass drop by end of the year. So much for the 60-70 new hires that Kingdon said were coming on in next few quarters I guess?

* The Thrill is Gone. I think this breaks trust across the entire SL community with Linden. I don't see how it can be restored until they offer Service Level Agreements and they don't have any idea on how to do that. The only reason that tonight there isn't a mass evacuation is because this announcement was a surprise attack. There are other alternatives (like Plurk!) and now people are highly motivated to find them and deal with their technology gaps in favor of paying for Linden to keep crawling up their own learning curve.

* Linden won't be able to play without their own ball. Cross-subsidy of Lindens own land rental/mgmt business must stop. If Linden has to pay for land at market rates wouldn't it be a loser? And when are they gonna stop putting that splash screen with Nautilius crap in my face each time I log-on. No way that Linden has a competitive land offering inworld if they had to be their own customer.

* End of the Land Dream. oh, and of course what about all the landowner who now have either 1) raise the rents or lose their butt on sims 2) have to move back to the full sims they just move people off of--and wait for LL to clear a backlog of upgrade requests, renaming and grid re-allocations. My sense was that a lot of landowners were on the edge before this bombshell hit their businesses. And the no-grandfathering thing--many of the biggest landowners have low tier--so now they all gonna get hammered.

* Devasting Impact on SL Economy. From knocking the mojo out of the sex rp, to killing the landbarons to chasing the hard core people out--this will dent sales and break spirit of SL inworld economy (which apparently grew 67%--of what, why???).

The dream of the 3D web is over at LInden Lab I fear. The land story that put their avatar on the cover of Newsweek is returning to roust. SL customers, visitors are now very fed-up at being treating like toys in Phil Rosedale's toybox. 

And of course no official comment from Linden since this bombshell dropped.

 

 

Tue, 10/28/2008 - 14:02

" I just wish there already was some viable competition on the market (No, unfortunately OpenSim is not ready for prime time, yet). "
 

I host numerous open simulators. And your statement depends on your motive for using opensim. Financial gain as most in SL are dreaming of?  Take a hike newb.

See, just as I wrote above. You are the uneducated gullable type. You believe that even after another service pops up it will produce a platform in which "you" can use to "make money".  What if I told you that I've not lost a single prim, or rezzed a single object that didn't rezz correctly and show up? Would that have any bearing on your judgements? What if I told you that as a unix administrator I have never lost a single object of my own in a year of working with opensim. Would that hold any value to you?  What if I told you that my whole intentions and purpose with what I do isn't for money, but to help give back to those working the projects and donating their time to the betterment of various software's. .Does that hold any real value to you?

The reason Second Life and it's users are failures is due to education. How many times have I heard the same thing over and over. "I am a business man. I own 20 or more sims.", "I own 100 sims, I am a busines owner.". Well if the idiot really wants to believe that, it doesn't bother me. In fact, he doesn't own a damn thing on those servers including his own IP when it really boils down to it. He has no real access to do anything whatsoever on those servers. He cannot manage or manipulate anything whatsoever on the servers.. well, legally anyhow.

Depends on what you want out of it. personally, I love the technology, but I dispise Linden for the fraud they have allowed on the servers for years. I still use the service, but I allow all you business owners to pay for my bandwidth and mysql space by not giving Linden a dime. And of course, I recommend that to others. along with hosting their own grids.

 

 Sorry, let me spell it out

 Sorry, let me spell it out more. Better Business Bureau here is the infomration about the Lab. http://goldengate.bbb.org/WWWRoot/Report.aspx?site=99&bbb=1116&firm=57373 

Its sorta funny..and

Its sorta funny..and I’m not tootin my horn..but a mere happenstance that I saw Jack's post only a few min after it was posted. I told a few folks about it..and it spread like wildfire. I've been in SL now for over a year and a half, and never have I seen this much controversy.

On a personal impacting note, I have/had this really large project.. or idea that I'm building..already spent over 50K Linden...in the process...including the Openspace sim costs. When I saw what the prim count was..I thought this is perfect and affordable to do this. Now, I was somewhat aware of the 'void' aspect of this type of sim. But, I thought that if I have that many prims..then it means I can use them. Granted.. I didn’t have any guidelines on what might constitute impact of other OS's on the same sever. Even so, I've not completed it..anyway, I believe it to be a pretty strong idea....and not already done by anyone in sl.  Point being, is its now headed for the  "digital bit bucket" as cost prohibitive, as well as I really have no idea..(when and if its ever completed), what I might do to comply with the 'rules' of an Openspace sim? I do find it odd, that if its really meant as to only pretty up the surroundings of a REAL sim..then that many prims is entirely too many and is a temptation that has sucked many into. So, I blame myself for not being an informed buyer, now I’m eating it in the shorts..and my account is Pending Cancellation, for this and many other reasons all culminating in utter frustration.
 
I came to SL, with no preconcieved notions. I found a commuity of folks of the likes I never imagined. I discovered a part of myself in the process. I began to create with a passion and degree of energy I never thought I had in me. I believe I made many friends, even if we are on our own independent 'thing'; we still have a huge common bond. This I will never forget. I saw talents in the most of you..that I still am in awe of and hold the deepest respect for.
 
The meaning of "new world" only touches the surface of what virtual spaces holds. The future, weather it be SL, Open Sim..or whatever ( I hope Open sim), the future remains to be seen, I only hope that we will meet again and truly retain this "small world" in a big one.
 
In closing, I keep thinking about this saying (in light of recent events):
 
"In a world of dissension, discontent and despair, who are YOU going to be in the face of it?"
I guess it’s a choice, stand back and complain or do something about it. Both feet in…
 
Peace!
 
P.S. Note for Eshi, your plight is felt by many, and ripples across the digital divide into our hearts, just as our hearts reverberate the same sentiment.

I'm told that the last time

I'm told that the last time the grid saw this level of on grid protest was the failed introduction of the 2003 tax system. They backed down then, and it would be unsurprising for them to back down now. Personally I don't see any problem with them increasing fees on voids by a reasonable ammount - that's business. This is clearly many times what one would considerd a reasonable price hike though - that's robbery.

@ Dana--we are investigating

@ Dana--we are investigating alternatives actively now. Eager to see what the real differences will be other than not paying Linden Lab.

Guardian UK picked-up the

Guardian UK picked-up the drama on the grid -- I'm sure Linden Lab would love to see your comments there also = http://www.guardian.co.uk/technology/blog/2008/oct/28/virtualworlds?comm...

 

It's obvious to me that

It's obvious to me that someone thinks I'm the anonymous who posted the link to the FTC. I'd like to be clear that I didn't, and I'm not the one who made the complaint to the FTC. I just thought it was worth sharing that someone had, and followed up on it and were told it was not a false claim by a FTC rep. It's not my job or any consumer's job to determine whether or not unfair practices have been used or a law has been broken -- that's what the offices of the FTC are for. I don't see any problem with a consumer exercising their rights to resources if they feel strongly enough about it. I'm affected and frustrated by the OSS situation, but I've not claimed that LL was acting fraudulently. Just stupidly. And I have no need to post as anonymous on this or any other blog.

The Future of Second Life

 I just posted some views I have about all this "Void" sim controversy and what I believe will be things to come. Here is an excerpt:

  • "I've been reading almost all the reactions to the OS tier increase on all the blogs, that I could find. During all this, I've ran across things that might be the answer to some unanswered or unsaid directions of SL." <more>

@ Gary, very interesting

@ Gary, very interesting post. I will need to read it again and think about points raised. ty for sharing.

LL has started to post recent data again--is a good step for them and appreciated. http://secondlife.com/whatis/economy_stats.php . Sadly you can see the negative impact on island sales but expect this to get much worse as the voids get flipped back into fulls. Avatars spending is up a touch to 419,000 which is about what we expected.

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