Drop Dead, Part Deux: Openspace Sim Owners, BOHICA

Apparently it wasn’t enough for Linden Lab® to screw over owners of regular sims by dropping the price, thus pretty well ensuring that sim owners like Lexx would stand zero chance of ever recovering their investment.  Now it’s time for owners of openspace (or “low-prim”) sims–ironically, who proliferated as a result of changes LL instituted at the time of the aforementioned screwing of regular sim owners–to get it in the shorts:

We need to therefore take some steps to improve [open sims'] performance and better reflect their actual usage levels in our pricing so that we can maintain the best performance level for everyone. As a result, we will be implementing a pricing change effective January 1st along with some policy changes effective immediately.

Let the reaming commence!

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.

[...]

At the same time, we will be increasing the upfront fee for brand new Openspaces from USD$250 to USD$375.

Yeah, I don’t suppose a 66% increase in tier, combined with a 50% increase in purchase price, is going to make anyone owning one of these sims real happy.

Lastly we will begin to proactively discuss overloaded Openspaces with their owners. This is important because as with abuse of region resources, a heavily overloaded Openspace can adversely affect other Openspaces sharing the same machine which is clearly unfair to residents who are using them responsibly. We have listened to your feedback on this, and agree that we need to make changes to better support our Openspace users by actively working to keep the performance levels as high as possible. We will also provide some detailed guidance about what ‘overuse’ looks like and how to prevent it.

And, as if that weren’t enough, they promise more policing of “overuse.”  But who decides what “overuse” is?  Is it just going to be like Supreme Court Justice Potter Stewart (thanks for the correction in SL Bloggers chat last night, Lillie) famously said about pornography, “I know it when I see it”?

This is going to drop demand for openspace sims through the floor.  Here’s an analogy: If General Motors were to declare bankruptcy, who’d want to buy a GM car?  How would you know whether your warranty would be honored, or even whether you’d be able to get repair parts for it in the future?  Similarly, why would you buy an openspace sim, when at any time, LL could come along, declare what you’re doing to be “overuse,” and yank the rug out from under you?  Uncertainty is a powerful “negative incentive” towards investment.

Needless to say, this announcement has raised merry hell among the existing owners of OS sims.  Some have even gone so far as to announce they’re calling it quits.  And I don’t know as I can blame them for doing that, having just been cut off at the knees.  Others are urging calm, saying that this is only LL’s “first offer” and the price increases may be mitigated somewhat before they actually go into effect.  Which would be all well and good, but ignores the “negative incentive” factor of stricter enforcement without clearly defined terms.

Of course, anyone who’s in the business right now can tell you that the rentals market in the Second Life® virtual world just plain sucks at the moment.  Witness this article by Prokofy Neva.  Now, friends, I’m not one to always agree with what he says, but he’s speaking from extensive experience here, and I’ve seen the numbers of this business for myself with Lexxotica’s rentals, and I can tell you that he’s right.  It is very difficult–nay, impossible–to make money at rentals unless you have damn near 100% occupancy, and Lexxotica wouldn’t be here if I didn’t pour a lot of my money into it to keep it going.  (Of course, I get a sizable chunk of the land, as well as the continued existence of a club to DJ in, so there are other benefits, too…)  Now, when I saw this announcement, I thought, “Prok is just going to be laughing his ass off,” and I wasn’t the only one.  And sure enough, he’s got plenty to say on this, too.

Prok does point out what LL says about openspace sims and their intended usage, to wit:

They are provided for light use only, not for building, living in, renting as homes or use for events. As a stretch of open water for boating or a scenic wooded area they are fine, but we do not advise more serious use than this and will not respond to performance issues reported should you not use them in this way.

Fine, but this raises a few questions:

  • Why are they starting to get anal about this now, given that people have been using these sims in “unapproved” ways for so long?
  • Why did they double the prim limits for openspace sims (from 1875 to 3750), when they knew or should have known that this would just encourage more of these “unapproved” uses?
  • Why did they give people the opportunity to convert their sims from full to openspace, when they knew or should have known that people probably weren’t just going to rip up their existing builds and plant trees or dig lakes on these newly-converted sims?

Now, I’m going to try to give LL the benefit of the doubt, employing the maxim, “Never attribute to malice what can be adequately explained by stupidity.”  I think they got overconfident about how much load their “openspace” sims could really bear, post-Havok 4 deployment, and about how many people would pick an OS sim over a regular sim for their needs.  They overestimated the former, and/or underestimated the latter, and it’s killing their revenues while imposing loads higher than anticipated.  The Law of Unintended Consequences cannot be circumvented; people will always find loopholes in the rules, and do as they damn well please.

And killing revenues is not what LL wants to be doing right now.  The whole RL world is currently in the throes of a financial downturn (how deep or long, it’s anyone’s guess at this point), and despite indications to the contrary, the SL world is not immune from RL’s effects.  If you check out this PowerPoint presentation, you’ll see that high-tech companies all over the place are being advised to hunker down and focus on sheer survival right now.  (As one of the last slides puts it: “GET REAL or GO HOME.”)  Much as I hate to see anyone screwed over by LL, the fact remains, if they go down, all of SL goes down with them, and we’re all screwed.  And maybe that poisons the dream of a “real” Metaverse for years, or decades.

Tateru, over on Massively.com, says, “The simplest explanations for all of this that fit the observed facts, is that either the March 2008 changes have progressively gutted Linden Lab’s market for regular simulators, or that they’re in need of a large cash infusion for Q1 2009 — or possibly both.”  Two sides of the same coin here, Tat.  It all comes down to money, and, for LL, as for every other business out there right now, Money = Life, especially now.  With the coming move to Class 6 server hardware (which sure as hell ain’t cheap, as I know from being in the HPC cluster business in RL), plus the cost of energy to keep those data centers powered up and cooled down, plus programmer salaries in San Francisco (where the cost of living is among the highest in the country), LL’s burn rate is nothing to sneeze at right now, I’m sure.  Anything that helps stem the tide is probably welcome right now.

But what about the effect of this on the average Joe the Resident?  Well, I think we have adequate evidence now that LL’s Give-A-Shit Meter about Residents per se is strongly down in negative territory–if not in imaginary numbers.  First it was the full island owners, then certain groups at SL5B, and now this.  One wonders if a second-order effect of all these policy changes is to drive Residents away to OpenSim-based Grids as soon as the interoperability technology is there to support it, leaving LL and their Grid to lead out a corporate-friendly, Disneyfied existence.  (Lillie Yifu tells me, “That is a long way off Erbo.”  Well, maybe it is and maybe it isn’t.  Depends on how hard LL pushes for it, doesn’t it?)

In the meantime, this Grid, of its users, by its users, and for its users, shall not perish from the Earth.  These things pass; the trick is to live through them.  Just make sure you’re ready for the next episode of “Bend Over, Here It Comes Again.”

4 Comments

Filed under Business, Current Events

4 responses to “Drop Dead, Part Deux: Openspace Sim Owners, BOHICA

  1. Pingback: Linden Lab has it’s business model ass backwards | VintFalken.com

  2. It is devastating to see how Linden Lab yet again attempts to milk it’s user base for more money and abuses it’s monopoly position they currently have in virtual worlds. It’s a good thing that new virtual worlds are coming online these days so people will have a choice in the future to find the virtual world of their choice to live their Second Life.

  3. Pingback: Es rumort in Second Life®! | Cyberwelten

  4. Jill

    Hi,
    I’m a journalism student at the University of Western Ontario and I’m currently doing a project on Second Life. I’ve been reading your blog and would be very interested in talking to you for the project. I’m basically looking at how people live out second lives in the world and have recently also been considering how the economic downturn in the outside world could affect people inworld. I would really appreciate being able to hear some of your insight into this. Please let me know if you would be interested. You can reach me at jbuchne@uwo.ca.

    Thanks,
    Jill Buchner

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