The Alphaville Herald

Mainland Sim Sells for $1800 in LL Auction

by Alphaville Herald on 16/07/05 at 7:29 pm

Auction winner Philo Hatfield

by Prokofy Neva

Following through on promised land auction price changes announced by CEO Philip Linden last month, Linden Lab has auctioned its first whole mainland sim today for a staggering US $1800 for 63,728 m2. Lida, a wooded hilly mature sim in the new continent located next to the Allena PG telehub sim, is described by dealers as prime real estate that should resell quickly.

But some auction-watchers fear the new system will excessively benefit SL’s already-entrenched top land barons, as bidding opens at a hefty US $1000. And those hoping to beat out the barons are likely to have to pony up well over a grand; even on the old auction whole sims would fetch $1200-1600 often.

Access to smaller amounts of wholesale-priced land is closed now as parcels under a whole region will no longer appear on the auction, except, apparently, abandoned land seized by Governor Linden and resold.

Philo Hatfield, a new March-born avatar who owns the Sammiamash telehub mall,was the auction’s high bidder at $1800. Hatfield describes himself as a “middle to big” land baron. Right behind him was Anshe Chung with a bid history shown of $1603, followed by Cyberlands CEO Shaun Altman at $1602.

Hatfield says he does not believe this aucton was typical. “Well, the only reason the price went so high on this plot is the proximity to the telehub. I don’t expect that to be the case with a normal plot of land.” Still, he feels the new system will limit land availabilit to smaller players. “It’s not a problem for me becase I have the assets to contribute, but I think it makes it tough for the small guys.”

Asked if he felt fewer bidders on $1000 sims might lead the top barons to buy on every auction and chop sims into 512s to sell quickly, Hatfield, who described himself as “homeless,” said, “Of course, plenty of land will be available for anyone to buy, it will just be marked up a little.”

Hatfield, who describes himself as “homeless” in SL, is currently hastening to sell 21,248 m2 of “very nice PG land” for $3.5 in an ad titled “Land Blowout!!!” on the SL classifieds in a sim called “Crooked”.

Anshe Chung is not used to coming in second. Asked about how she felt being beat by a “wannabee baron,” Land Empress Chung, already reportedly controlling some 40 percent of land sales in SL, said she would have been willing to pay US $1799 for the mature sim right next to a PG telehub.

“When I bid on an auction I never loose. Because if somebody outbid me, then the price is higher than it would interest me,” said Chung about her regular auction strategy. How does the business girl plan to respond to the new auction pricing, given the slender margins in her business?

“Some people confuse ‘winning’ auctions with being successful land baron. The win-the-auction part is easy. The hard part is to actually sell land with profit.”

Another bidder who asked not to be identified spoke of plans to continue with the whole-sim auctions, commenting, “well they’re going to pay at least my rate for every single sim until I get some.”

Some auction-watchers feared the new release of sims starting at $1000 bids would ensure that the mainland sims were essentially released at a fixed price, as few residents would be able to come up with such a large sum. They also were concerned that small-fry would-be barons or project leaders seeking only one sim would have to bid very high to get access to land in LL. When established barons turn around and sell the whole sims, they are likely to be motivated to chop them up for quick resale to beat the 30-day cash burn of the $195 whole-sim tier bill. Small-fry barons who pay a lot will then have to charge a lot more in-world — or liquidate to established barons.

Much will depend on how LL will pace the auctions, and whether the increased price in private islands, now $1250, will slow the pace of LL mainland auctioned land. Currently the statistics for average parcel sales are missing from LL’s home page, but prices have dropped as low as $4/m for even prime mature land in pretty sims, and the days of $9.5 for waterfront mature seem long gone.

Says Chung about prices to expect this summer, “It will even out, margins will go down and we will see one race to the bottom where lotsa people who have a grand and too much time will play the land baron game.”

Buster Peel, another four-month old avatar, who opened the Lida auction and then withdrew, said the first new auction bore out his earlier prediction that setting the starting prices at the old auction average would merely result in higher overall prices. “Some land is more desirable than other land,” he said. Peel believed land prices are bouncing up again, citing his own experience — now to become extinct — buying and selling some of the very last smaller parcels on the old auction.

Land dealers as well as several ordinary residents emerging from the Allena telehub wonder whether SL is coming out of its recession; opinion is divided as to whether the current slump is easing, as GOM rates, sunk to $3.80/1000 last week with huge land-sale cashouts by at least one wannabee baron, creep back up to $3.93/1000.

“I see one trend where people put thousands and thousands of US$ from their RL wealth into the game to try to ‘compete,’” commented Chung. “They see it as investment and hope to get rich. But if my math is not wrong I see huge monetary losses at least for some people who tried and meanwhile left.”

With rampant alt account use at SL, it’s hard to know who comes and goes on the auction, but at these prices, ordinary residents of SL may now start buying more from each other until the barons’ new pricing will become clear, especially after higher-priced auction wins.

Prokofy Neva is owner of Ravenglass Rentals.