Pink Linden’s Commerce Survey Scares Merchants

by Alphaville Herald on 14/11/09 at 1:13 pm

Pink points out Apple takes 30% of iPhone App revenue – will LL follow suit?

by Pixeleen Mistral, National Affairs desk

Pink linden 

Pink Linden

It is hard to blame Second Life merchants for being concerned about the virtual goods' retail landscape – the Lab has a long history of changing the rules of the game on what seems to be a quarterly basis, and for some players the stakes are high. So as fragments of a by-invitation-only survey began circulating on the grid friday (text of the leaked survey questions after the jump), it was no surprise that speculation about the Lab's intentions was the order of the day.

Has the Lab built a Mall island? Is the survey real? Will the Lab provide official in-world vendors?

I contacted Pink Linden for comment:

Pixeleen Mistral: Hi Pink – I'm a writer for the Alphaville Herald and I understand that there is a survey that you guys sent out to some of the merchants. I'm interested in your comments on that survey – I understand some people say it is like a phishing attempt or something
Pixeleen Mistral: is the survey real?
Pink Linden: yes it's real

Pixeleen Mistral: ok, that is good to know
Pink Linden: :)
Pink Linden: that's why I gave my name

Pixeleen Mistral: but only XStreet merchants can take the survey?
Pink Linden: no that's not true
Pink Linden: we sent very broadly to merchants in both locations

Pixeleen Mistral: I have a source that is concerned that the survey suggests that LL might have official in-world vendors and a special mall at some point – and that could impact existing resident businesses
Pink Linden: this is a very early concept document
Pink Linden: not a plan or a roadmap

Pixeleen Mistral: so this is just testing out the ideas and not a firm plan
Pixeleen Mistral: I guess we have to expect people to be a bit concerned given the history
Pixeleen Mistral: you guys are in a tough spot – if you ask people what they think it raises concerns
Pixeleen Mistral: if you *don't* ask you are flying blind
Pink Linden: exactly
Pink Linden: and we tried to be clear this was not on our roadmap

Pixeleen Mistral: well – some of the people doing the survey are worried that it is your roadmap
Pink Linden and we fully understand the history.  To that I would say that I was not part of that regime.
Pink Linden: and the commerce team did not participate in that way of thinking.
Pink Linden: I can assure you that we are in no way ready to move on any of these concepts.

Pixeleen Mistrall: but some of them are what your competition is already doing
Pink Linden: for example Apple charges 30% of iPhone Apps

Pixeleen Mistral: true
Pink Linden: we want to work with the community to evolve the business
Pink Linden: and it has to start somewhere.

Pixeleen Mistral: I think the difference is that there is a lot more history in SL
Pink Linden: that's right Pixeleen.
Pink Linden: so we have to start early and work carefully.  no sudden moves.

Pixeleen Mistral: since I'm probably going to do a story about this – who should people contact if they think they should be part of the survey? you?
Pink Linden we based invitations on past behaviors in world
Pink Linden: which is normal survey protocol.

Pixeleen Mistral: ok – so you want a statistically significant sample and self-selection would mess that up
Pixeleen Mistral: isn't it time for you to go home now? its friday night
Pink Linden: we all work hard here. :)
Pink Linden: I'm passionate about Second Life.

Pixeleen Mistral: you must be having fun then
Pixeleen Mistral: that's about all you can ask for in a job
Pixeleen Mistral: something you care about passionately and is fun
Pink Linden: Honestly, it's the best job I've ever had.
Pink Linden: and I absolutely love it


The Reichstag rises again in Jessie – what does history teach us?

After Pink headed home for the weekend, I looked over the leaked survey questions while dodging stinger missiles near the Herald offices in Jessie sim and admired the WWIIOLer's new Reichstag. After moving a safe distance from the missile launcher, I considered the fortunes of war in Second Life.

As long as the supply chains for the WWIIOLer's buildings and weapons are safe, the battles of Jessie sim are likely to continue indefinitely, but the fight for a piece of retail virtual goods market seems to be shifting – perhaps decisively.

Is the Lab testing the waters for some major changes? While this may not be a roadmap, that the Lab is even thinking about the sort of direct competition with residents that providing free land in a Linden sponsored Mall would entail is not going to sit well with the some.

Assuring itself of a bigger cut of retail transactions will contribute to the Lab's bottom line, but the fallout from the changes being considered are likely to alienate more of the creative class – and destabilize the virtual land business further.

If there are any lessons to be drawn from the SL paramilitary's battles, it is that once the game becomes too one-sided, some residents stop playing. Could something similar be in store for the Second Life commerce game? Will there be any alternatives to living in a company town and buying from the Linden company store – and will the Lab manage to resist harassing the owners of competing retail outlets that do manage to survive? Given the far from level playing field, the Lab will need to move with great care, and a broader community discussion might be a good place to start.

Unified store management, premium support and a delivery guarantee

Usage of the vending machine will allow the merchant to receive premium support for merchant activities, enable automatic listing on XStreet SL, and ensure that all items are delivered…. guaranteed. Additionally, the vending machines provide rich data reporting and business metrics.

In exchange for the use of the vending machines, Linden Lab will assess a 10-15% surcharge on all purchases.

Listing and Promotional Program
Cross-promote your items on XStreetSL and get Premium Classified Listings

By joining this program, any item you list for sale in-world can also be auto-listed on XStreetSL. Cross-posted items will automatically be displayed, in rotation, in a premium position as a sponsored listing in on the Classifieds page.
To participate in this program, a small surcharge will be assessed a fee 5-10 $USD for each item cross posted.

Merchant Marketing Program

Tools to help you grow your business

The program would provide exclusive use of branding systems, customized store systems (such as a custom URL/SLURL and web storefront), and automatic consideration for large scale promotions. Also included is a data dashboard to enable you to track purchases in real-time. Customer service tools such as AvaLine mean that you are always able to talk with your customers.

Membership in the merchant marketing program would be available at a cost of $10-100 USD monthly, depending on sales volume. 

The Mall of Second Life

Free land for Second Life merchants

Linden Lab has developed an Island in Second Life that enables merchants to create their own stores as large or small as they desire. Display your creative works from shoes to houses.

In exchange for the free land and promotion of the Mall, Linden Lab will assess a 30% surcharge on all purchases.

24 Responses to “Pink Linden’s Commerce Survey Scares Merchants”

  1. Jessi Graves

    Nov 14th, 2009

    I do love it, you know, upwards of 15% of profits for the vending machine, and 30% of the profits for the free land you’ll be crammed in with a ton of other shops. Upwards of nearly half your profits going back to LL :D That is fantastic! Not only that, but upwards of 110USD for additional minor services for a single item. Roughly 257L is equal to 1USD (when buying L), they’d be making roughly 116L to your (roughly) 141L.

    …Yeah, no thanks! Maybe if the islands’ 30% was dropped to 10%. Hell, all the services totaled up should cost no more than 10$ a month, regardless of sales :v

  2. Boopsie Blingtard, Mall Owner in SL

    Nov 14th, 2009

    Oh, wookie there! It’s a itty-bitty bunny-boo! It’s a pinky too! Awwwww wif its own wittle waffle.

    Can I have an eeeny-weeny bit, wittle bunny? Awwwww, pwetty pweeze?

    Oh my! Why are fuzzy-boo’s eyes RED now?

    It’s coming over to me…My my! What bigggggg teef wittle bunny has! Hey, stop! That hurts! My wallet….OWWWWWW…Stop! Help!

  3. みみか 王

    Nov 14th, 2009

    I pay affiliates 25% to host my vendors. Paying LL 30% is not much of a step.

  4. coco

    Nov 14th, 2009

    Safe Harbor and DCMA wont help them anymore.

  5. GM Nikolaidis

    Nov 14th, 2009

    if they are going to pull something like this they will either need to add exceptional value and/or lower the cost. Given their track record (ie: killing onrez in favor of xstreet) I don’t anticipate much value being added. In addition to that, the point of the gatekeeper competing with residents does not sit well.

  6. Sinden Lucks

    Nov 14th, 2009

    Pink Linden: for example Apple charges 30% of iPhone Apps
    Pink Linden: we want to work with the community to evolve the business
    Pink Linden: and it has to start somewhere.

    Excuse me, it started in or around 2003 or so. My avatar landed in 2005 when it was “Our world, our imagination”. Now, it’s Linden’s world, Linden’s imagination in every meaningful word of the phrase. You couldn’t even leave the web (Xstreet) alone, they had to buy out the people created web apps then too.

    Linden doesn’t even advertise the same anymore. Not at all.

    The mention of Apple makes sense, there is money there in your works. It’s ours, we are Linden. And we need to make money off your creations.
    Make it further proprietary in nature. They won’t leave it alone, not until the real world completely exists in SL. With every flaw and issue.

    “We want to work with the community to evolve the business?”

    When exactly did the “community” decide to have any part, or want to have any part, of what Linden does in their business? I don’t recall anyone saying.. “Oh, Linden has changed and now it’s all better, let’s partner with them”. And please don’t even start with the solutions provider bull. Furthermore, Linden never worked with the “community”. Not really. Not unless it meant that they were going to get something out of the deal.

    When did the “community” decide they wanted any part of how Linden does business?

    “It has to start somewhere?”

    Excuse me, it started many years ago. You can’t just say this is the new “SL” and anyone care. And Linden messed it all up and continue to do so. And people have not been happy with how Linden has done business since. What exactly does Pink Linden understand about all of this? It doesn’t sound like much, that is for sure. Just because he or she wasn’t part of that “regime” doesn’t mean anything. The best this person could do is learn to leave the SL community alone. Period. Quit with the monthly policy changes that everyone has witnessed for years and let the people in SL do what they do best.. After all, they are the ones that made SL.. they are the ones that lived inSL(tm).

    Linden is greedy and always has been. Nothing changing here. And this is the change that has been needed since 2003. To quit changing everything daily. I’m not sure people need Linden’s “help”. It’s usually at cost, and most likely is setup to further rob or take what the people have done. And sadder is peoples attitudes have followed Linden. They too have turned into a bunch of greedy idiots instead of refusing to fall into that trap. The first question in their mind is “Is there money in it?”. No doubt about it. Not for all, but for many. You cannot be successful if that is the first question and only concern.

    Corporate “image” is what Linden is working on. The one that they didn’t need nor want for all these years while allowing large simulator barons rob and steal others blind. Now all the sudden they need the “SL” community to stand behind it.. and well, it’s not going to happen I don’t believe. They never corrected all the problems from the past. And a new CEO and website isn’t going to cut it. It’s not the problem of the people who have been part of SL for all these years to help salvage what little bit of reputation Linden has left. It’s not the people who ran a corporation like a bunch of spoiled frat boys. Nor was it they that created such image. Linden made those changes all by their lonesome, but need your help to fix or straighten it out. So they are going to suck every penny out of your pocket not knowing it will do little to salvage their reputation.

    Second Life would thrive if Linden didn’t have anything to do with it. That is the change that needs to be made. Remove Linden. Problem solved.

  7. Miro Collas

    Nov 14th, 2009

    I had a notecard passed to me that was all fear mongering, trumpeting the end of malls and 3rd party vendors. Gotta love that sort of thing… akin to shouting fire in a crowded room, in my view. It is one thing to be wary and cautious – it is quite another to stir up panic.

  8. Sinden Lucks

    Nov 14th, 2009

    “Merchant Marketing Program

    Tools to help you grow your business

    The program would provide exclusive use of branding systems, customized store systems (such as a custom URL/SLURL and web storefront), and automatic consideration for large scale promotions. Also included is a data dashboard to enable you to track purchases in real-time. Customer service tools such as AvaLine mean that you are always able to talk with your customers.

    Membership in the merchant marketing program would be available at a cost of $10-100 USD monthly, depending on sales volume.”

    Need I say anymore. Look at the last line. Since when is the Second Life(tm) technical platform only for those that can market and encourage others to do so? Everything written is about marketing, money, and greed. Nothing at all about the technical platform, the uses for the technical platform, and collaboration between others for producing a generation of business applications using such platform. You even “use” the word business around Linden and it “has” to relate to money. And that “money” always starts by going into “Linden’s” pocket prior to anything else happening with the software, and for any idea they ever come out with. Time to pay attention, and provide an alternative. Something for people to go to when Linden collapses on their pile of money. But just listen to how professional it sounds to speak about marketing of virtual non-tangible prim ware. You would think they had just produced the next technology that led to the extinction of world starvation.

    I’ll tell you what tools help grow business. Not giving Linden your money. That will certainly help you and your fictitious in-world business.

    Linden’s next flood of marketing gimmicks will be when they start offering free land. They will do this because they feel the need to compete. And cannot sleep at night due to their horrid fears of loss. They will move away from the actual “land” based business due to emerging markets they cannot compete with nor control. And will offer primarily their “backed guarantee” of the protection of IP and the rights of content creators. This will have people jumping all over the idea just like people did when GNU/Linux was threatened and people flooded in to pay for the corporate protection of use. Lasted about three months I believe before people realized they were retards. And the only ones that looked like true ass hats where the companies offering the protection. I can think of a few. Very short lived, with lingering ass hat feelings for those that took part in it. This is the next Linden step at sometime in the future. They have too, they can’t help themselves.

  9. Trinity

    Nov 15th, 2009

    This is an attempt to TAX merchants, plain and simple.

    Linden Lab have bought the great turkey xstreet and now need to justify the expense. This is the roadmap. Linden Lab have a proven history of deciding policy then using a survey to back it up.

    15-30% for use of a linden certified vendor, $10 to list effectively on Xstreet, 10-100$ to promote, another 30% off the top if you use a linden mall. NO FRIKIN WAY LINDEN LAB NO WAY AT ALL

    Looks like a TAX, smells like a TAX, watch them deny it.

    The real story here is how massively out of touch the lab is on this issue. xstreet is not a centre of commerce, its a tolerated evil. It’s a disaster of a site that only has merchants using in order to provide convenience to their customers. Attempting to use xstreet and other merchant incentives to leverage a TAX onto content creators in SL will blow up in their face and make moving all the pervs to their own island look like a sunday picnic.

  10. Senban Babii

    Nov 15th, 2009

    How long until we see a ‘prim tax’, designed to discourage people from being their own content creators and thus pushing them towards the Linden-approved content providers?

  11. LOL

    Nov 15th, 2009

    What about all the sims who NEED the revenue from the malls they host to help pay thier tier? Linden Lab will force all thoes sims under if they create a superlag mall with thousands of scripted vendors. As well pimping these vendors and sim on the LL owned website xstreet will hurt small business even more.

  12. Momoko Pekli

    Nov 15th, 2009

    I think there is a basic misunderstanding by LL, most merchants don’t take money out of SL, it is ploughed back into shop rentals and land ownership.

    When LL publish “number of people making a profit in SL” they don’t look at where the money is going, most is not leaving SL.

    For most people a 10% to 15% tax on sales is a massive cut in profit!

  13. LittleLostLInden

    Nov 15th, 2009

    Well, I know one thing is for certain. I’ve seen Linden Labs make some very shady moves in the past, and this seems like another one.

    The thing I am still furious about is the great Linden bot maneuver.

    You see, it is well known that the Lindens rely on their traffic numbers to keep the charts looking nice. When they announced that THEY would monitor and deal with bots, you knew it was a hoax. There are just as many bots and campers existing today as there were before, with the exception of a few thousand or so.

    I still see bots and campers everywhere I go and leaving it to the Lindens to warn the bot\camper violators does no good. And when you try to report any bots or campers yourself, they tell you the same old thing, that they are working on the issue.

    It’s all lies.

    I logged on today and it says 71,000 users. I know in my bones that 20,000+ of that number is still bots and campers.

    The thing is, Linden Labs needs those 20,000 to remain in the daily numbers, so they will never fix this issue with bots and campers. It’s why we are still not allowed to report bot\camper sims.

    I was thinking of hosting a bot\camper bounty site, where you would get the bounty of linden dollars if you could make the bots go away from certain sims for a certain period of time.

  14. Lord Sullivan

    Nov 15th, 2009

    “Pink Linden we based invitations on past behaviors in world
    Pink Linden: which is normal survey protocol.”

    For the record Slapt Core our site avatar received the survey invite as well, all he has on Xstreet is our free slappy penguin and the vendors which are free. He signed in for his xstreet account on the 22nd October 2009. He does not purchase things in-world, well except for the delivery box that our customers receive the slapt products in. So with that in mind hes not a very ideal candidate for an xstreet survey of past behaviours in world.

    Go figure eh? :)

  15. PinkyTinky

    Nov 15th, 2009

    Pinks blog…She’s not all bad, only when it comes to Linden Policy

  16. Prof. Archie Lukas

    Nov 16th, 2009


    never satisfied with maintaing quality -just profitable growth and now linden labs have to squeeze more profit out of a declining market.

    nothing new under the sun there

  17. PinkyTiinky

    Nov 16th, 2009

    So she responded in the merchants forums today replacing the world ‘mall’ with full sims. Full sims for 30% of your content selling income.

    I wonder how many land barons are merchants on SLX?

    Quietly swept under the carpet in the hope they don’t hear?

  18. tari boyau

    Nov 16th, 2009

    I’ve been an SL user for few years now, which some of this time had to tend to RL issues. I had always had a dream of having my own store in Sl, and possibly my own sim, but after reading this and some articles, and talking to some of my SL friends I don’t think I will venture that way. One of my friends mentioned to me she was fed up and was going with some others to check out a place called SpotOn3D. Have any of you heard of it? I don’t really know what I will do, probably check it out with her. What I really know is I am so disappointed in SL. Thought I could come back and become a great designer and have a thriving business.

  19. Murphy Alderson

    Nov 16th, 2009

    Of course she says it isn’t a road map. But we all know it is. The cat is out of the bag. If anyone really believes we won’t see these changes implemented in the next 6 – 10 months – the line for the kool aid is on the left.

    I believe trinity is right, it’s just a way for them to tax the merchants without calling it a tax. And you know, if they want to charge us 10% to 15% per sale to allow us to sell our items, I’m ok with that. I pay the xtreet tax, and I don’t mind. Sure, it’s be nice to sell things and keep all the dough, but I’m a realist at heart. All this stuff takes money to run.

    What I would like though, if or the Lab to just come out and say what they want to do. I really hate it when they do this crap, and claim to be involving the community when they already have their plans worked out, with the i’s dotted and t’s crossed. Then come to the community, and get ‘input’ so at least some of the sheeple are lead to believe they actually contributed because their input fell inline with what the Lab already had planned.

  20. Sinden Lucks

    Nov 16th, 2009

    You’ve got that right Murphy. 100 percent. And it’s been that way since at least 2005. But just mark my words as to what I say. You will have free land soon because Linden knows they will not be able to compete with anyone in the virtual land market. And rather than see anyone else making a buck off of it, they will give it away and rob you blind through your virtual product. I’ve seen this coming for over two years.

  21. Sinden Lucks

    Nov 16th, 2009

    “So she responded in the merchants forums today replacing the world ‘mall’ with full sims. Full sims for 30% of your content selling income.”

    And people will do this.. however, it will backfire and make people even angrier. They don’t understand that Linden wants legal rights to your content for their own gain.

    In a few years they won’t be able to give a sim away, much less get what they have been charging for years. Linden is fully aware of this.

    When this happens, and it will happen due to their own greed, there won’t be a market for the thieving land baron robbers who sell, take back, and resell the simulator space over and over. And all of their so called investments will be “worthless” as it should be. So the virtual economy will continue to spiral into the sea. Just watch and mark my words of what I write. The people in SL whom are the thieves and barons that have robbed the platform of it’s real value have no talent. They won’t make it doing anything else but stealing, robbing, and being how they are. And linden will lose their business over it in the end due to the protection of the thievery that goes on with their platform.

    It’s a classic case of the blind leading the blind.. they both fall into the ditch.

    People won’t believe it when I state that they cannot even sleep over their own greed and fraud. But I know they don’t.

    Do I wish for the their demise? Absolutely not, they do and don’t realize it. Simple lack of prophetic vision.

  22. Sinden Lucks

    Nov 17th, 2009

    I’ll make one more statement on this thread and leave it alone.

    For two years I’ve been warning others about what Linden would do next and no one listened. And every bit of it has happened. There is a war being waged. A spiritual war with this company. And it’s been going on for a long time.

    You need to remove all of your content from Second Life(tm). Linden Lab cannot do anything about it legally, or technically. Every time I try to warn people of what is to come, they ignore it to their own peril. If you want to save yourself the issues that will arise with Linden’s continued effort of fraudulent behavior, and the continued effort of protecting such fraud for profit, you will heed the warning and remove your content from SL. When you leave, delete your inventory. And make sure you have xml copies of all of your works.

    Linden isn’t going to come out and tell you what they are doing. They never have with the exception of the fraudulent advertisement years ago claiming one could “own virtual land”. They are not going to tell you anything about whom they really are. But I know. I know exactly the kind as I’ve fought their evil for years.

    They won’t ask for your content. They are going to do what all governments, and corporations do when they want the rights to something they have no legal right to. They are going to do all they can to persuade you to “give up” your rights by making offers they don’t believe you would turn down. And the offers will be made future tense directed at the content that resides on their servers and services that “you” have legal rights to.

    Before it’s over, Linden will merely state that they gave you something for your content to further their agenda of greed and they will use everything in their power to have control over your content. It’s not there yet, but it’s coming and for all the reasons I have said in this thread.

    Listen for once. And remove your content from Second Life. You’ll save yourself the grief you have coming when Linden fails at the attempt of gaining legal access to what belongs to you. Don’t be so wrapped up in your second life, that you don’t understand what is happening in the real world. That is a trick of the adversary.

    Remove your content in mass.
    Linden can do nothing about it. And if they try to stop you, sue them in mass for breach of their own Terms of Service.

  23. Neogryzor Laryukov

    Nov 18th, 2009

    “This is an attempt to TAX merchants, plain and simple.”
    Absolutely agre with this comment, LL wants to increase their profit out of SL commerce.

    A bad movement for everyone in my opinion. LL sees the profits of some merchants and thinks how to take a part but they don’t think on the mass of creators and sellers who barely make profit.
    These mass creators have a mass of stores that maintain a good number of commercial sims, (and also a mass of sells in Xstreet).
    The harder for them to compete, the more abandoned sims, and less fees for LL. Also less variety and quantity of in-world content.

    If Lindens really want SL commerce to “evolve” they should let the merchants have a margin instead of trying to take part, (take profit), on every business about SL.

  24. Neo Citizen

    Nov 18th, 2009

    I know a few people who used to sell their goods on XStreetSL who don’t anymore. Most of them are pretty small potatoes. One’s pretty big. About half of them quit because Linden Lab forced them to re-categorize their goods, resulting in an immediate and near complete loss of sales. Linden Lab thinks they’re marketing wizards too, I guess. Too bad they’re wrong.

    Now this. If these new piece-of-the-action fees go through, I think Linden Lab is going to find that 80% of the business in XStreetSL will vanish almost overnight. Very few people I know who sell things on XStreetSL would be able to make a profit if LL took a monthly listing fee off the top.

    I’m convinced that the people running Linden Lab do not actually play the game they maintain and market. It’s impossible to be this stupid and clueless otherwise.

Leave a Reply