LL to Island Owners: Drop Dead

Or, as Lexx would put it…“Blow me.”

Linden Lab®©™ announced yesterday a big break in the price of private island sims…now regular islands will be going for US$1000, down from US$1675, and “open space” (low prim) sims will drop in price to US$250. (Tier, of course, will stay the same…the cost of power, cooling, and bandwidth isn’t getting any lower, nor is the need to amortize the development costs of the server software getting any less.)

Those of you planning to buy sims in the near future are probably dancing with glee right now. Those of you who just bought sims, on the other hand, are most likely as livid as Lexx is, or as Nobody Fugazi is. True, LL did throw a sop to some of the more recent sim buyers, offering them a free low-prim sim to go alongside their suddenly-devalued purchase. Of course, Lexx took delivery of Lexxotica a little too late to take advantage of that bonus…which just doubles the piss-off, as far as she’s concerned.

Of course, as Nobody points out, “I’m really glad I’m not someone with a lot of land holdings. Sarah Nerd must be feeling this – and I just know Anshe Chung is.” You can add a bunch of other names to that list, like Sirux Mahoney, Desmond Shang, and Doeko Cassidy, to name a few. All of them have large numbers of sims–Fantasyland, in fact, just doubled its sim count not long ago through strategic acquisitions–and the value of those assets just took a 41% nosedive.

And, if Prokofy is right, the sim market is set to keep going down like the stock market on Black Whit-Monday…in fact, all the way to zero when the Grid finally goes totally open-source and I could set up a spare machine here to run a sim. (No doubt I’d have to pay a tier fee to LL still, though, to connect to the “official” Grid and its asset servers and user pool.) Harbingers of that are already appearing, in the form of grids running the OpenSim software (which I really ought to check out, by the way…I could easily see running a small Grid on one of our test clusters at the office); they’re charging, in some cases, less than US$100 for a sim, with tier of US$75 a month. (Though, with the dollar going the way it is, I’m betting some of those outfits will want to start quoting their prices in euros…but that’s another story.)

This strikes me as somewhat unfair to LL’s existing customers…you know, the ones that are responsible for so much of what makes Second Life®©™, Second Life®©™. And not just the land barons; most of the good fashion retailers have their own sims, too, as do many other unique groups. As far as I know, the only company that seems to be able to get away with pissing off its own customers on a regular basis is Microsoft…and even for them, that strategy is starting to fall apart. LL really, really, really might want to think hard before they do this again. They might be able to get away with this once. But after that, all bets are off.

“The consumer is not a moron; she is your wife.”David Ogilvy

UPDATE: Tateru over at Massively.com has a post up about the price drop, where she advances some theories about reasons for the price drop, namely, drops in the price of Class 5-type server hardware and greater automation in the island-buying process due to the new Land Store. Which is all well and good, but the steep drop in price hurts existing customers as much as it helps new ones. LL could easily have kept the sim prices the same and pocketed the extra profits, or scheduled a more gradual price drop curve, say, US$100-150 a quarter over the next year, which wouldn’t have been such a big “ouch” to existing customers.



Filed under Business, Current Events

3 responses to “LL to Island Owners: Drop Dead

  1. Yeah. Moore’s Law.


    What really irks me is that they didn’t even give a hat tip to the secondary economy users have. Just because people buy islands does not mean that they aren’t dumb enough to ignore the phrase ‘Return on Investment’.

    I’ll have to do a follow up post on this…

  2. Pingback: Respecting Land Owners in Second Life… « Africa in Virtual Worlds

  3. Pingback: Drop Dead, Part Deux: Openspace Sim Owners, BOHICA « Evans Avenue Exit

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