The Alphaville Herald

LL Slashes Land Prices — Landowners Scream In Pain

by Alphaville Herald on 08/04/08 at 12:08 am

Early adopters may have difficulty recovering investments

by Pixeleen Mistral, National Affairs desk

Buy now before the price drop! USD$1650 sims to be USD$1000 by the end of the month.

Today, Jack Linden announced significant price cuts in new virtual land created by Linden Lab as part of it’s Second Life entertainment product. Previously, a simulated region of 65,535 m2 of mainland was offered at auction starting at USD $1250, but going forward, one sim of imaginary land assets will be placed on auction starting at USD $750 – a price drop of 40%. As of the end of this month, new islands will be available at the Linden Land Store for USD$1000 – currently islands are priced at $1675.

While initial purchase prices were slashed, the ongoing fees to retain “ownership” of the e-land are not affected – leading observers to speculate that Linden Lab is forgoing some immediate revenue to secure more monthly land tier payments.

Reaction to the move was swift, vigorous, and divided between the landless fanboi contingent and current landowners. Those who have purchased land are understandably concerned that a significant portion of their investment has been wiped out – literally overnight. A few residents suggested that this is another pre-IPO buff-’n-shine job similar to the notorious trademark controversy — benefitting the Lab at the expense of it’s most loyal customers.

Other residents reacted with glee at the prospect of “sticking it to the land barons” and buying even more land for less money. However, the carrying costs of Linden land is significant – USD $300/month per sim for new landowners, so while cuts in the purchase price may look appealing, the long term costs of virtual land from metaverse service provider Linden Lab are significant. How sustainable this is in the face of increased competition is unclear.

While we may never know the real reason for the sudden price cut, it seems likely that the Lindens are reacting to a combination of factors including other metaverse service providers such as OpenSim, a weak RL economy in the USA, and a business model that demands continuous expansion.

Perhaps the mood of the community was summarized best by Spontaneous Radio, who said, “Who is making these decisions at LL, “The Love Machine”. You call tier a maintance fee and what does it maintain? The grid is only maintaining a decrease in quality. I can TP half the time, residents can’t even pay us estate owners tier cause transactions fail. My avatar has its head up its ass, and now I see that my avatar isnt the only thing like that. The only part of your system that has not failed is billing, that is always on time. 13,000 private islands over 3 million dollars a month in maintance fees and you can’t even provide a grid that works. You have sold about 10000+ islands in the since you raided the price in Nov 06 and now you have lowered the price. another 7 million dollars that you took from resident and the grid gets worse.”