Looking at the Linden SL Data (and trying to be excited about SL5B)

and land sales are all confused as well--from Reuters: land sales pricing collapses http://secondlife.reuters.com/stories/2008/06/19/linden-freezes-land-sup... Is really curious as to what they are doing over there in LL boardroom???

Almost certainly the big increase in land mass relates to flipping full sims to voids--which looks like a great deal for land barons because now they get more seafront per $1USD and is probably also better for parcels as they are more spread out--in fact they can be a lot bigger relative to prim count. And yes, it is a smoke screen on SL real growth...

But this of course also dramatically increases "seafront" capacity and will tank value of parcels--and imagine when prim counts on voids increase again the effective price per prim will also go down. So sure feels like a land bubble about to pop.

Hard to see who wins on this--other than LL who is still getting the $0.03/prim in tier fees. Big losers will be the land owners atm--prim value is now also at the same $0.03/prim as you can even buy an individual void sim for $75USD direct from LL. Ok, you may have to wait a little, but seems like a lot better deal than Bay City--where the purchase price as a staggering $0.75/prim for my little parcel.

Bigger issue really though--is still who is buying the new islands each month for new cash (not converting full to void)? and related to that what is the abandonment rate for existing islands? These are the biggest issues for LL and now that they have big enough payroll for 250 employees--the biggest issue for LL future. But LL is still sending a lot of smoke--wondering when we all gonna get burned??

LL can't stop head collision with wall! The land bubble sure is about to pop and we might see the servers appear on ebay auctions soon sold by user 'Lindens*R*us'. We all know the figures have always been BS but yes they at least can do a little bit to maintain SL reputation on media a bit better than "SL causes wife to kick hubby out!". On top of it all now the land sales dropping down to L$1/sqm almost everywhere. Alot of real estate confusion, too many people are having a go at Land Baron career. Someone I know just went down after converting majority of his 15 sims to void sims and could not keep up with the tier after most owners left the parcels and he could not resell them fast enough after the LL land price plummet. So he gave up and poof! the remaining owners lost their land. This is a person put his life savings into LL's hands in the form of land investment. Quite often I see people trying to sell their 4096sqm 937 prim blocks on one of the land groups and others are laughing at the requested prices when they are only a fraction of the cost these people have bought it for, simply because a void sim costs less these days. LL has managed to shoot itself on the toe, let's see where the next bullet lands...

Void sims cost $250, and you have to have a private island already to be eligible to purchase them. Then tier is $75 after that. These are now glutting the market to such an extent that many existing and new land barons are charging less than the tier they themselves have to pay to the Lindens.

Only a few well-resourced and nimble land barons will maximize a profit from having this new capacity for privacy and increased waterfront -- most barons will flounder with all the competition -- and end user purchases and loaning to friends which is quite prevalent. Mystery math didn't go away -- to make a profit in the glutted market, you have to charge less, and as people begin to discover they can't get buy-backs and can't sell their purchased (but retained) void sims, the market will fall apart.
http://secondthoughts.typepad.com/second_thoughts/2008/06/a-voiding-the-...

There are now 300 Lindens in fact. 20,000 sims. And only 385,000 people who spend more than L$1 per month in world, although tier paid by tier-payers is some $40 million or more in revenue for Lindens.

Hours online were flat for several months; premiums are only at 88,000, not recovering yet from a previous high; positive-Linden-flow businesses are not growing by very much at all. Second Life is spinning its wheels, having fallen into the classic traps that experts like Sir Bruce or Ed Castronova could have told them always happens to MMORPGs with synthetic economies.

I'm puzzled why the failure of the internal land market should bother you, when you exist outside it as essentially an entertainment market supported not with the model of content sales and land rentals inworld, but advertising spots by outworld corporations (unless in fact you try to cover tiers with Greenie clothing sales).

And I also fail to see how a model based on growthism, endlessly expanding as the world putatively keeps growing at some predictable rate, can ever work, not only because there isn't anything to predict, but because there's a concurrency ceiling on this grid.

Many people have reason to be really angry at the Lindens now; you don't, as they have had Greenies displayed on the Showcase for ages.

Lindens should not have built Bay City, competing with residents, but should have stuck to merely shoring up missing or broken infrastructure on existing sims.

Crashing of the Land market is hardly the problem here, it is what is behind that. We are only experiencing that due to one and only one reason, LL deciding to reduce their land price without a clue to what that would do to the market. I'm sure they did it with best intentions (or did they?), with the extra revenue they would have been gathering from those land sales, should they have kept it at the same level they could have spent more on making SL the choice, therefor kept up the numbers of new signups in so many different ways. There was no competition to reduce Land purchase prices, or lack of sales for that matter. As a result of all this, they are hurting themselves too because the people that truly make this second world go round are the business minded people behind it and their trust on LL. In Rezzable's position in some cases, that in turn means the turst of external corporations since if the internal business people loose trust/interest in SL and there is a huge confusion about where SL is going, it is hardly marketable to external corporations without the numbers to back it up. To most of them this is only a "3D website with high hit rates" and that is the only reason why any business would want their products displayed. How many of us go back and visit Greenies on a weekly basis? Great build.. what's new?... We need the newbies!

RightasRain, you've been on the very front page now for weeks, and you were in the Showcase not "a week" but months -- featured continually.

You can buy a single void sim but they cost $250, not $75 -- $75 is the monthly tier.
You have to already have a private island to be eligible to purchase one.

You seem to have an ideological basis against the land business, which you a) call "land speculation" (as if this is something evil) and b) imagine is "all land speculation".

And yet it's the Linden's model, first and foremost, that enables them to pay those 300 employees and executive lunches. Why should *they* get to arbitrage, but everybody else has to be a socialist in a commune?! That only leads to -- and has lead to! -- corporate towns paying corps of tethered content creators -- like yourself -- and other forms of oligarchy -- first and foremost, from the Lindens and their friends.

There is nothing inherently wrong with arbitrage; it's a key feature of all normal and free economics. The people selling land in SL aren't Mr. Moneybags Evil Capitalist like in some 19th century cartoon; they are housewives, students, retired people, poor people. RL rich people aren't going to be trying to make money *this way* which has long unpaid hours and huge risks.

The land business is a service. It takes wholesale large sims, advances the cost of them, and makes them available in smaller units, and also holds the tier on them on a sim as people develop over 30-60-90 days and add more land. Land dealers are available to liquidate at a moment's notice, now with bots. Land dealers make it possible to rent to own. If it weren't for land dealers and a free land market in Second Life, there wouldn't be the huge surge of sustained creativity for so many people that there is -- there would merely be high-cost shelf space that people like you with RL resources would buy to put trinkets on, and force everybody else to become a mass audience, as they are with television or magazines.

Virtual worlds are 3-D streaming social media that enables the ordinary person, not just the entrepreneur, to monetarize their time online, and one of the ways that is achieved is by making it possible for tens of thousands of people to go into small rentals businesses and sustain the shops and homes of other people.

You seem to be jamming on Bay City. Why buy such a silly-priced parcel? We already saw parcels like that on other Linden zoned land for the last 2-3 years in Brown, Boardman, Shermerville, and we could only expect the exact same thing in Bay City. It's not a good model. All that happens is that wealthy hobbyists buy and hold, and then make some profit by the occasionally very wealthy end-user. But the Lindens can't declare a free land market -- and then put caps on their own content-filled and zoned land. I think they should, because what's happening is that a clear social good -- Linden zoned, content-filled, and protected land is being hoarded -- but they will not -- it's their own ideological decision.

They do make a lot from Bay City, even priced in Lindens, because it enables them to siphon off all the excess banking, ad extortion, and casino money remaining among some key players, and helps them put it into real estate -- where they can then make a profit, and the Lindens have to sell more Supply Lindens on the auction, which they do each money, and raise their income from half a million to a million dollars or more, which was their high at one point with the last real estate bubbles.

Real estate bubbles reward Supply Linden first and foremost, and of course Currency Linden, who gets a fee for all the transactions on the auction.

I don't think they should split the platform from a world based on real estate whatsoever. There are other platforms where you can play with Photoshop and Sketch-up and Google and make 3-D prototypes for business clients. Second Life isn't so perfect for that, but it has something far more important -- interaction among people in real time and asynchronic time and serendipity and removal of time and space barriers. There is no reason on earth why this cannot take the form that it has always taken in human affairs, with marketplaces, bazaars, chaihanas.

The model of one wealth patron sustaining a stable of high-end content creators as a marker of wealth, and collecting tributes or fees from portrait-sitters and various other donors worked in the Renaissance but it cannot work as a viable model for a modern economy; it can only be one facet of any economy.

Chaihanas were all over Central Asia, the Caucasus, the Far East, etc. I could just say "thruway rest stop" or "truck stop" if you'd rather.

Uh, yeah, there's a pretty simple idea: a call for free enterprise and democracy, not corporativism as the model for Second Life. I guess the facts about the land *services* business just sailed right past you because you prefer your oligarchic/company town/corporativist model. Ok! : )

Your belated addition that "some rental agents" work quite hard with thankless work is just that -- a belated addition, tacked on, to an overall ideological hatred of free enterprise of the really democratic sort that benefits not just people like you with RL resources but lots more people. People are right to expect to be paid for a lot of thankless work. If they flip land and make a profit, they might just well as make a loss tomorrow -- it's work. I really don't like the barons holding all the Linden zoned land, and I think Lindens should zone a lot more and make the prices fall, and also on those particular legacy zoned sims, develop a better policy for their use so they are not hoarded, but that's not likely to happen. They are an aberration in the market, anyway.

It's ok to make money -- you do it yourself. Making money by flipping land isn't a crime, and isn't even morally repugnant, as the Lindens themselves do this very thing, using the arbitrage price of servers, and they make their revenue in this fashion, and that's fine. Again, it's perfectly fine that other people are in the real estate business. I suspect that as for others, what really bothers you is that this is a source of capital and a power base that you aren't part of, and you'd like to structure the entire world differently as a result, and force everyone to have your Television/Disney/Hollywood like model. Sorry, it cannot be imposed, and isn't viable for everyone or for the world.

If you are saying by "split the platform from real estate" you mean only *the Lindens' real estate inworld business," I don't think they should even be in real estate inworld. They should lay out a basic blank landscape, put in some roads and maybe the occasional windmill or fence or something that sort of sets the tone for theme or zone or civilization in some form, and leave the rest alone. They could even sell zoned sims for more on the mainland with covenants checked off to disallow adfarming or even a price ceiling. They can do whatever they want, the interface allows for whatever policy they wish to make.

I hardly think "service level agreement" is what they need with every purchaser of a 512 or 4096 -- that might be a rational offering for enterprise level accounts paying the $25,000 per year.

The splash screen should be purchasable by anyone within a set price schedule and a set of terms, i.e. PG or whatever. The allergy to advertising by the Lindens is one of the great killers of Second Life, and it spawns malignant forms of spam like ad extortion.

My ideas are perfectly coherently expressed, Rain. What you need to do is examine your hatred of land speculation. It's not based in anything rational. It's also an exaggerated description of the market and services in Second Life.

Prok, some interesting points--but not so persuasive really for me. But worth considering in the current picture of SL. Perhaps a more focused thread on Land Purchasing would be useful? And for what it's worth I don't hate or pity anyone--it is possible afterall to have a dialoge without diatribes, to have different opinions with making it personal. your related post here is good stuff -- http://secondthoughts.typepad.com/second_thoughts/2008/06/a-voiding-the-...

Reverend Rar, it looks Lindens did some calculating too. Zee put numbers up:
Land mass grew over 44%. The total number of regions owned by residents increased 44.2% over Q1 to just over 1.5 billion square meters. Our growth was due to the popularity of our newly launched “Openspace” land product along with a change in pricing to make the purchase of land more accessible to first time buyers. “Openspace” regions are full 65,000 square meter regions with an upfront fee of $250 and a recurring monthly fee of $75. We decreased the price for full regions by 40% to $1000 upfront (the recurring monthly fee remains $295). We also launched a new Land Store that instantly provisions new regions. Pricing changes plus a dramatically improved purchase experience fueled land sales in the quarter. On the other hand, premium subscriptions have remained flat since we decreased the stipend to L$ 300 per week in the second quarter of 2007. Prior to that the premium account essentially provided residents with a way to purchase L$ at a discounted rate. Because land represents nearly 8x more revenue to us than premium accounts, our focus has been on the launching of new land products rather than on enhancing the premium subscription. ...

And went to a hell of trouble to make them look nice (the graphs! ;)).

Land mass grew over 44%.
User Hours grew by 8.5% while peak concurrency grew modestly. (your bots?)
User-to-User Transactions grew over 14%.
Volume on the Lindex grew 5%.
The number of “profitable” inworld businesses grew by 9%

From the official SL blog.

And Zee Linden there in the comments on the amount of bots in those metrics: Bots. Based on a set of behavioural characteristics that we observe bots having, we believe that about 10% to 15% of our user hours are attributable to bots. This has been consistent for some time. I do not discuss that bots can have it's purposes & useful use, but let's face it, most bots on the grid serve camping or traffic statistics boosting purposes.

I can see why you have trouble accepting land barons, and why "land speculation" bothers you -- because you believe deeply "there is no land". It's not that you can't accept a metaphor, or have pierced a metaphor, it's that you cannot accept human valuation, which is more than a metaphor. When people buy land, they buy land. They don't have the problem you do valuing it and living the metaphor, not just reading it. They hold it, and put things on it, and put it for sale, and buy more. It's not just a shelf space for display of content or game trophies -- it's intrinsically land, because the space around them -- privacy, building potential, etc. -- is always what they are buying. Hence the attractiveness of open spaces sims. Of course the open spaces sims are empty calories. They don't represent growth so much as a failure of the Linden's mainland policy and the unravelling of their island policy.

Actually, people don't always chose to live in the air. You can go up on the mainland in a skybox as well -- the mainland is what started the tradition of skyboxing, coupled with security orbs. People do like to be grounded, they like buildings on the ground, and there is nothing wrong with that, they don't want to live in a tekkie Moebius strip. You should pay attention more to what people actually want and do and not just listen to your extremists in your stable of architects and scripters if you hope to stay in business in SL.

ok Prok, I give up...what is a Moebius strip? Looks like, from wikipedia, some weird mathematical oragami. (thanks for my ongoing lessons in esoteric vocabulary ;))

The PIRL houses that thousands of people were willing to pay annually $45 million or so to the Lab for are what makes it possible for the tiny handful of tekkie Moebius strip sandboxers to goof around in cyberspace. Never forget it. Do not force your aesthetic on other people and take away their freedom. If you want to live in a Moebius strip, who could stop you? Stop pretending that this is going to be in mass demand; it will not be, and that's ok. Do you want to be in business in SL, or do you want to play art critic? Who pays for art criticism? In fact, Moebius strips are merely the uniform boring mass taste of the sandbox set, and I'd love to see something different coming from them. How about a Klein bottle.