Who Is Buying Ultra-Luxury Virtual Land?
by Alphaville Herald on 04/11/08 at 6:22 am
Soaring auction prices for Linden’s new Nautilus land during OpenSpace protests
by Curious Rousselot
October 30, 2008: We are now into our third day of protests over the recent price hikes of Openspace SIMs but earnings from the land auction appear to be unchanged. The Herald has been paying close attention to the bidding war over the new 1024m2 plots in Nautilus and from what we can see, the Lindens appear to have a huge hit on their hands despite everything else.
Somebody is willing to pay – perhaps Linden alts?
These 1024m2 plots in Nautilus are a bit different from what has been seen in the past from the Lab. All the plots have access to Linden maintained public spaces on at least one side and many on all 4 sides. Each plot comes with twice the normal prim limit. But in exchange for these luxuries, the land owner can neither split up nor join together the plots that they purchase. All plot in the new Nautilus area will remain 1024m2 until the Lindens dictate otherwise.
People seem to consider this new area to be the perfect place to buy. A quick review of the current bids show a high of over L$101,000 with the average still well into the double digit thousands of L$. To save you all from having to do that math that is an average price well over US$100.00 for a single 1024m2 with the current high price hovering around US$375.00.
When we compare today’s numbers with those from a few days ago, we see that the high was a bit higher but the average is stilll hovering around the L$50,000 mark. With less than an hour to go on the auction of October 27, 2008 the high was L$195,640 (or around US$724.59) and the low L$30,000 (US$111.11).
Clearly the Lindens have a hit on their hand with this new area. Assuming that they were able to create such a beautiful build using half of the 65536m2 of a full region and used the other half of the region for the new plots that are up for auction they have 32 plots per region. These plots are selling for well over US$100.00 each. This quick back of the hand estimate says they are getting in excess of US$3200.00 per region, well above what they charge for a private island purchase and a significant under-estimate of what they are actually getting.
If we go further and assume that each plot is owned by an individual with no other land (which is obviously wrong but might make up for my earlier under-estimate) those 32 plots will be bringing in somewhere in the range of US$160.00 per month in tier alone. That’s not quite what you pay for a full region but it looks to me to be a pretty healthy number.
Despite all the current grumblings and complaints from land barons over opensims, there are enough people who are willing to pay what this reporter considers to be very significant sums of money for a small virtual homestead. After all, if enough residents were truely not happy with the mainland, these little 1024m2′s would not be going for more that a year of premium account payments (which if you pay once a year works out to US$72.00 plus your local taxes).
With only 2 hours to go for the October 31, 2008 land auctions in Nautilus we may actually be seeing a change in the price of plots being sold in Nautilus. The highest bid is a meager L$71,790 for a single plot, that is if you can call US$265.88 a meager setup free for what is really a video game. The low is still pretty impressive at L$20,010 (US$74.11) which the Lindens should be happy with. Our average has come down quit a bit to around L$32,688, which is still over US$100 for a little 1024m2 plot of land.
Up to this point I have tried to give you facts and limit my own opinions into this article but there is something I just don’t understand so I must ask you all – who is paying these prices? I mean hundreds of dollars in setup fees for a little virtual homestead. I think I make a good living but I sure can’t afford that sort of a setup fee. So please, leave a comment and tell me why you are willing to pay hundreds of dollars just so you can “own” a little chunk of virtual real-estate in Second Life.
I KNOW THE ANSWER!!
Nov 4th, 2008
One name comes to mind: Intlibber Brautigan. DAMN YOU INTLIBBER!!!
Ranma Tardis
Nov 4th, 2008
What in the frack are these people smoking? Must be much better than my pain meds! Gee $265.88 American as a set up fee for server space??
Orion
Nov 4th, 2008
After being evicted from my Openspace last night due to my landlord’s apparent shutdown I decided to take a look over at Nautilus. Not surprisingly its already starting to look just like the rest of the mainland with floating junk all over the place and horrible newbie builds of doom. You’d think that if LL truly wanted the mainland to look good they’d offer those who purchased these on these sims some free design lessons?
And speaking of openspaces, there are quite a few of them over there that I had accidentally stumbled into. Talk about overloaded! On my openspace I had all but 150 prims free and I had been utilizing about 14 temp rezzers in various parts of the sim for details like pots, pans, and dishes in my diner, etc. But regardless my sim’s fps never fell below 30! I dont know how these idiots have their servers configured over there but each and every openspace I came across was lagged to crap! On average each sim’s FPS was at max 10 and all they seemed to have on them were trees and void. Its almost like whoever setup the servers for Nautilus decided to cram each and every one of their openspaces onto just one CPU.
Smooth move LL. Way to artificially prove your point! :/
Prokofy Neva
Nov 4th, 2008
Let me clear up some of your ignorance here.
1. The Lindens do not get $100 US or any US amount from these sales. The sales are denominated in Lindens. That means the auctions, which are going for anywhere from $33,000 to $150,000 *Lindens* are *sinks* in the system. They don’t *directly* go into the Lindens’ coffers as such. All Linden-denominated land sales are sinks, look at the sinks and sources charts on the economic page. They are “burned” currency, like texture uploads.
2. That doesn’t mean the Lindens don’t earn anything. People have to buy the cash to make those auction purchases, or buy them inworld, so on each sale of currency, the Lindens get a fee there off the LindEx, then, each time a landbaron takes all his Lindens from the land sales and cashes out, the Lindens get a hit there, too, on the cashout fee to send it to Paypal. So, sit and do the math, or try to do the math, on that, but it isn’t some gasping huge amount.
3. The real profit in any land sales comes in recurring tier. But here, the Lindens take a hit. They are selling these parcels as 1024 m2 lots requiring only the 1024 m2 or $5 tier level beyond the $9.95 monthly account. But they have 468 prims in them, as if they were 2048 tier level, which would then be $15 per month. So with their tier level jump, they are losing these sales as $15/month tier. They’ve put empty space near every 1024 to accommodate the extra prims, and that makes them more attractive.
4. So what do the Lindens get out of all this? Well, they show that they can build and maintain a nice mainland community with enough space and terracing and such to look good, and control blight by preventing ad farming cuts or linking up of plots — they get more tier payers per sim that way, too, but not some huge amount – perhaps 8 per sim (go and count inworld). Basically, it’s a showcase project. It’s made to demonstrate what these $10/hour Mole workers can do, and show a potential buyer of SL, or a corporation wishing to buy a large group of sims, what can be done. The Lindens are basically in the content/land sales business now. They want to make sure that when they opensource or when they are overtaken by all those reverse engineers out there, they will have a reputation as “the best estate manager with the most interesting builds”.
Is this area “popular” or “a hit”? No, not at all. Take a closer look. There are very, very few end-users in the continent — I’ve made landmarks to about 6 stores, and I’ve counted perhaps a grand total of 20 actual end-users, including myself.
The rest of the parcels are being flipped faster than flapjacks at IHOP. The flipping is staggering. I see new auction bids come off the auction for $35,000, and within the hour one land baron has it marked up to $55,000, and within another hour, another land baron has it marked up to $100,000. What is mainly going on now is a bidding war among probably less than a dozen land barons, and some of those are alts or partners. They are jockeying to see what this thing is really worth. It will likely remain worth $50,000/1024 the way Bay City and Shermerville continue to get these prices.
There are many things that are ugly about these auctions I’ve been blogging about:
o No auction transparency — we can’t see who is winning the bids or bidding
o Aggressive practices of bidding way up on multiple or every single aucution — barons are making that only other barons willing to play for high stakes, or end users with deep pockets, get these sims — they deliberately crank up their price for everyone to make them appear valued
o The Lindens essentially give them NINJA sub-prime mortgage loans on the hour. It used to be you could not place any bid higher than what was in your account. Now you can play any number, seemingly, and even win an auction, and even pick it up in world, and all with your account in the red. That enables you not to have to buy Lindens, but to wait for your flip, and within an hour, you may have doubled your price, put your account in the black, and gone on to lather, rinse, repeat.
o The Lindens occasionally seem to cap this practice, and force some barons to buy inworld for $0 with their accounts in the black, but that can gain them 48 hours or more in time, as it sits there, and it also enables people to bid everyone else out of the market, and then simply renege on one of their auction wins, at which point it merely goes back on the auction
o Kalyrra Heart, she of ad extortion infamy, and some of the other ad farmers, are all over it, with high-priced lots and in some cases ugly spinning crap to force a buy of the view — but the Lindens have been enforcing their new policy.
Curious Rousselot
Nov 4th, 2008
Ranma Tardis said, “What in the frack are these people smoking? Must be much better than my pain meds! Gee $265.88 American as a set up fee for server space??”
Actually it’s worse than that. $265.88 American as a setup fee for what I think is about 1/128th (0.0078125) of a server. And as you put it, “what in the frack are these people smoking?!?!”
Kirk
Nov 4th, 2008
“One name comes to mind: …
…
Intlibber Brautigan.”
INTLIBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Unpatriotic Honkey
Nov 4th, 2008
not everyone is as poor as you.
maybe if you worked a bit harder you could also afford to live the good life…
Anonymous
Nov 5th, 2008
prokofy, and you say that shit from what knowledge? LL isnt too keen on giving out details of its earnings so how could you possibly say that?
Oh right, talking out of your ass again.
Shut up and go back to feeding your cats.
Ruprecht
Nov 5th, 2008
Yes I am sure LL is buying them.
Conspiracy.
I believe in Bigfoot too and LL probably employing him as a janitor.
It’s too bad the workers in SF shot down that initiative to rename that sewage plant after Pixeleen.
Salone Runo
Nov 5th, 2008
Nice way to insult people when your Anonymous.
Bitch.
2cents
Nov 12th, 2008
“Nice way to insult people when your Anonymous.
Bitch.”
Name one, ONE person who comments on this blog using his or her RL name?
Salone Runo
Nov 12th, 2008
I’ll put my name right now, What would be the point? Theres plenty of people in the world with my name.
By name I meant SL name.
Durhhrrhrrhrrr
Marc Woebegone
Nov 17th, 2008
one name comes to mind…. Marc Woebegone
Johney Giano
Dec 8th, 2011
Derp. Salone owned you, 2cents.