Linden Lab Losing Lots of Private Sim Revenue, But Don't Expect Linden Lab to Lower Tier Anytime Soon -- Here's Why
On Second Life's Subreddit group, users keep upvoting a blog called Gridology which points out that SL is losing a lot of private sims -- i.e. "1000 SIMS IN 11 WEEKS". (Taking these numbers from Metaverse Business' very useful chart depicted above.) From Gridology's perspective, this means Linden Lab should lower the company's monthly tier costs. However, as I've said before (but since it keeps coming up, bears repeating):
Linden Lab will very likely not lower tier any time soon. It's an utter non-starter.
- Most SL land is owned by a small number of "barons" (see chart above, from this post last year), about 500 of whom pay over 60% of Linden's land revenue.
- If land baron tier prices are cut, therefore, Linden will suffer a huge blow to revenue.
- Linden Lab can make more money keeping tier prices where they are, which again, is mainly coming from land barons, most of whom are still able to make tier.
- By keeping tier prices where they are, Linden Lab can plow a reliable stream of profit into a war chest to sustain themselves years after SL private land revenue finally, inevitably, withers away.
- As an added bonus, keeping tier prices high makes it difficult for new sim owners to compete with existing, established land barons -- which likely keeps these land barons happy, and happy to keep paying tier.
It's more likely that Linden Lab will offer more non-sim land offerings as a Premium monthly subscription benefit. And if SL were to enjoy substantial user growth and growth in alternate revenue streams, yes, then it might make sense to lower tier. But it would be a near-suicidal gamble to lower private sim tier now, in the desperate, blind hope that somehow, somewhere, there's a substantial market of people interested in paying hundreds of dollars a month in virtual land. CEO Rod Humble won't even address the question of tier costs. And if you understand the chart you see above, you'll understand why.Tweet