Second Life's Excess User Inventory Drives Hardcore User Retention (Comment of the Week)

In comments to last week's post about the idea of charging SL users for excess inventory, Lette Ponnier made some very interesting observations spinning off my point that hardcore SLers rarely leave, no matter how angry they get over a new policy or software change, going on to make a contradictory point very much worth reading closely:

"It's very true that every time Linden Lab considers or implements something unpopular, masses of people scream about leaving... and then almost none of them do. In my experience, though, one of the main reasons they don't is, precisely, their inventory.

"Inventory represents the investment of time and money that people have already put into SL. You could go to other grids and put up with their 2007-level technology and content. You could bring some of your friends with you, keep in touch with the rest out-of-world, and make new ones there. If you're a creator, you could even re-upload everything on your new grid that you made for SL. But you'll keep thinking about the thousands of Lindens' worth of damn good stuff still sitting in your stagnant inventory in SL.

"Everything about virtual worlds is transient and transferable. Except inventory."

More on this, and my thoughts on this, after the break:

"Inventory is the hook that keeps us fish flopping on Linden Lab's line. Charging for inventory might not cause them to lose enormous floods of people for that choice alone... but it would be like trimming the barb off of the hook. They would lose one of the primary factors keeping people in SL after they flail their arms and rant and threaten to leave for all the other reasons that crop up.

"The more inventory people have, the more firmly rooted in SL they are.

"It would be unwise for Linden Lab to do anything to inventory that would make it less desirable to accumulate for the same reason they would never intentionally make it easier to export."

Lette Ponnier is very right that excess inventory is probably a major reason longtime SLers stay engaged in the world. For that very reason (and she probably disagrees here), this is exactly why I argue most users would accept a very marginal or easily absorb-able charge for maintaining inventory. But we both agree SLers rarely leave SL, no matter how angry they are at Linden Lab's latest policy move, so even if charging for inventory turned out to be a failed experiment revenue or engagement-wise, it's easy enough to reverse course.

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Comments

[Vaki]

Hamlet, several people on your (multiple) plurks have made this exact same observation. I say this not to diminish Lette's completely accurate and astute analysis, but just to highlight that others have also noted this same thing, without recognition.

[slutrix]

Mr. Au is still targeting active users. What about the enormous number of accounts whose users either never bothered to log in at all or have abandoned SL and still have huge inventories?

I don't see him pointing out the need for LL to do any housekeeping or pruning of inactive, abandoned accounts. Wonder why...

Oh, perhaps it's because housekeeping is something diligent people think of doing (and actually proceed to do).

[Shockwave Yareach]

Regardless of the hows and whys, nearly all of LL's customers ARE po'd at the lab. Why they stay is different for every one of them. Some don't want to abandon the thousands of dollars in their land. Some don't want to leave their groups. Etc. Etc.

But with every new hole LL puts in the good ship SL, and with every person that abandons their land and inventory, those remaining have less and less reason to stay. And as we are seeing the past year, there's only so much people will tolerate before voting with their feet. (Or did you not notice that sims have been closing for as long as the recession has been over? Can't blame what happened in 2008 for what happened in 2012...)

[Metacam Oh]

SL is cooked. The people who are underpaying won't give an extra cent, and the people who are keeping it afloat are being milked dry. Good night Second Life.

[Arcadia Codesmith]

I still don't think you're going to squeeze a recurring monthly fee out of inventory, and you'd generate one hell of a lot of ill-will even giving it a trial run.

If you cap inventory, grandfather in existing accounts, and then sell extended inventory slots for a one-time charge, that might work.

I also recall a trick that Ultima Online used when confronted with database bloat -- they gave out trash cans and then provided points towards desirable rewards for deleting excess inventory. The system was gamed without mercy -- people would create more junk to put in the cans to gain the rewards -- but in the end they succeeded in reducing the total number of useless items that packrats (like myself) tended to accumulate.

And on a wildly tangental note, I'd be very willing to pay a fairly substantial lifetime fee to gain title to a plot of land with no tier... and probably paying additional sums over time to expand that land. One-time unlocks are very attractive to residents who play on an irregular basis.

[Iggy]

Many educators I've met stay for this reason. They apparently worry more about hair than what might be done in other worlds for their projects.

What educators did leave, however, was overpriced land. I hear more and more of them ask for places to combine projects to reduce their share of tier.

That is still going on, as the Lab milks its cash cow to skin and bones, using the Jobs strategy for the Mac after 2007: milk it dry while searching for the Next Big Thing.

What would LL's iPhone be, anyhow? I would not wait for a miracle, folks. That said, if they did find a Next Big Thing, then SL could continue to thrive, just as iOS devices kept the Mac division going at Apple and even encouraged iOS users to buy a Mac, modestly raising the market share for Mac OS devices.

[Penny Patton]

I think LL would be a in better position to introduce more costs to the SL experience if they made a serious, competent effort to improve SL as a product.

I've been in SL since January, 2005. In that time, I've yet to see substantial improvement to SL as a product.

Almost every bug or design flaw I recognized even as a new user is still present today, seven years later, and still strangling SL's potential.

The "big improvements" most SL users would point to (like mesh or deferred rendering) are modest and incremental at best, way too late to the game as well. I EXPECT these things from virtual worlds. They're not a huge leap forward, they're a shoddy attempt at catching up, especially when these features are introduced with new, crippling flaws. Rigged mesh, I'm looking at you!

In addition, if LL ever did recognize this problem and start significantly improving SL, they would be able to expand their profits by drawing in enthusiastic new users, rather than trying to bleed their dwindling, increasingly irate userbase.

[Gideon McMillan]

If Linden Labs charged me the same as I pay in tier to maintain my inventory *and* allowed me to take that inventory to other grids (assuming appropriate protections for creator's rights, etc), I'd pay it.

It is the inventory.

[Seven Overdrive]

At this point, LL really has no business charging more for anything else since they are already using SL to fund other projects.

People leave for many different reasons. If people are suddenly told to cough up money to store the items they already paid for, you can bet there will be outrage among many, especially for older residents that have collected many items of sentimental value from over the years.

I don't understand this sudden fixation of yours to punish people for having large inventories of items they already paid for.

If you really want to punish people for excess in SL, then how about targeting things that actually have an impact on the experience of nearly everyone, like excessive numbers of attached scripts or laggy, poorly constructed attachments made by shoddy creators.

Milking the current, dwindling user base further will not solve anything.

[2013]

Blog traffic must be down, another "let's make the people who spend money, pay more"

SL is not cooked, everyday I've logged into SL since I joined, I see 45k-50k users online.

I'm all for clearing out inactive accounts, and put a moderator on the marketplace. If your textures, vendor ads, clothes, prims look like 2009 (shit), your not getting on the MP.

Why is SL not marketed like IMVU? I walk into a Target store, go to the computer/entertainment section and see racks of IMVU gift cards. LL is not doing this why?

[Alberik]

Gee, if you lower tier the Rip Van Winkles and land barons will all leave immediately. Impose an inventory charge and the Inventory Van Winkles will all dance in a circle while they thank you. Rio Van Winkles with large inventories presumably are factored out of this new and exciting revenue model.

[Adeon Writer]

I'm only behind charging for inventory if it means I get lower tier.

Then again, I'd agree to alot if crazy things for lower tier.

[Isa]

There's no opposition from me to pay a small inventory fee, but there are better solutions. Look into what incentives most users would enjoy as opposed to creating penalties.

I'd GLADLY pay a fee (up to 10-15 usd monthly) for the ability to have my inventory accessible to alts. If I'm not mistaken, many regular users would pay a fee of some sort for that ability as well. Or make it a premium benefit. I guarantee the profit from that would be enough to offset LL having to close their doors. Everyone is asking for this.

[Toxic Menges]

I dread to think how much real money I have invested in my inventory. There is easily at least a couple of thousand USD at least invested in there. All at the whim of a very shaky set of asset servers. Anyone who has been in SL for a decent amount of time has had losses from their inventory.

I'd happily pay to safeguard my inventory, hell at the moment i pay roughly 40 usd a month for land that I haven't visited in months (computer problems are making it difficult for me to be in sl). LL should incorporate safeguard and unlimited cap on inventory as an added perk of premium sub.

If you don't pay to be premium, you get a cap of say 10k. I'm a very firm believer in paying for use, and the number of free accounts is something LL would do well to monetise. What about increasing allowed inventory size pro rata with land tier? The more land you own, the more inventory you can have. Landowners do carry the vast majority of free users after all.

Devil's Advocate mode is securely set to on today...

[Henri Beauchamp]

I find the argument about old timers retention quite dangerous: I mean, while it is true that many said they would leave if this or that policy would be put in place and actually didn't leave after the policy was enforced, it is still a matter or acceptability: at one point, it will be "la goutte d'eau qui fait déborder le vase" as we say in French ("the single drop of water that makes the vase overflow": not sure if there's an equivalent saying in English, but you get the idea) and people will *actually* leave or dramatically reduce their presence and contribution (they will sell or abandon their land and revert to a free account).

Mind you, I have myself been many times displeased with LL's successive changes and new policies (changes to the viewer UI, changes in the search engine, Adult segregation policy, buying of XStreet and push towards the Marketplace shopping, to cite only a few).
Either I adapted myself (I forked LL's viewer to make my own viewer that suits my needs, for example), or I kept using SL "as is" (albeit with much resentment towards LL: the changes in the search engine and the Adult policy made me loose 75% of my SL revenues in 4 years... Should I say "thank you LL" for this ???).
But at some point, the time investment (the viewer maintenance is not a small task) and the frustration might lead me to just move on and call SL a failure, not to return again to it but for some occasional RP.

Even if you have a "hooked" audience, you should still ensure this audience stays happy, else, sooner or later, your business will fail.

For now, my view is that what is preventing SL to grow is the land tier policy: it is totally *insane*: who wants to (or even can) spend $1000+ to buy a sim and $200+ a month to keep it (and that's not even counting VAT for EU users) ?
I would be more than happy if LL was to reduce the land tiers, and if charging a small fee for owners of huge inventories is the counterpart for it, then I say, go for it, but do it in a smart way (i.e. don't charge small inventories, creators, land owners, etc).

[val kendal]

I already pay a charge for my inventory, it's called a premium membership. LL should run the Inventory like Flickr does - free accounts have a limit, paid accounts don't.

[2013]

All the bitching and complaining about land tier still rumbles. Have you ever considered the average SLer doesn't want or need a full sim.

Welcome to 2013, Amazon, EBay, every major retail company has a marketplace! Why is it so hard for the "crustys" you old timers , realize it has little to no impact on land? Stores that are MP only have so little effect on the economy.

I hope people that might be interested in SL don't find this blog first, if they are researching SL. The doom and gloom of you crustys is ridiculous. Seriously, gtfo if you're so miserable with your SL experience

[Metacam Oh]

@2013 that is ridiculous. Of course people want virtual land to play around on [look at Minecraft]. They just can't afford to pay 295/mo for a hobby. Imagine if you spent $295 on porn a month, people would say you have a problem.

[Galatea]

Henri: "not sure if there's an equivalent saying in English..." It's "the straw that broke the camel's back", the idea being that you can only load so much inventory on a beast of burden before it can't handle it. Probably a more appropriate metaphor, given the current discussion. :)

FWIW, my revenues on my adult business are up since LL implemented the search engine and adult policy changes. Should I say "thank you LL" for this? I suspect the picture is more complicated in both of our cases, and demonstrates the uselessness of anecdotes as evidence for anything.

[Ciaran Laval]

@2013 you've got to be kidding, Amazon and eBay are two great examples of what online stores do to land stores. The difference is that Amazon and eBay don't have the main backbone of their revenue model based upon renting land, with Second Life, Linden Lab do.

[Iggy]

These blog-fests are more fun than SL itself.

"Rio Van Winkle"? Those must be from Brazil.

LL should monetize this exchange.

@Monday, an SL gift card in Target and such might not be a bad idea. Of course LL would actually need to market the virtual world beyond sites already about it.

[2013]

And I think Chrono mentioned it on another post about the RL economy impacting the SL economy, people don't have the expendable income now to "play" or own a sim.

I am a crusty, I choose to think in 2013 and not back "in the good ole days" , the game evolved, the economy changed, but a lot of old timers haven't.

[The Tier Is Too Damn High Party]

@ Arcadia that's a great idea. I'd happily pay a lifetime time fee for land.

I'd also be willing to pay, happily, for an amped up premium account that included access to OpenSim and/or the right to export or import inventory. Similar to the way one pays for cable add ons...

[Shug Maitland]

For many people in Second Life RL economics is a very big deal. They have free accounts and work in world for their linden$. Even a small fee would drive some of them away.
Do not assume these are freeloaders, they often contribute significantly to our society, just not in ways that makes them very much money.

[Kim Anubis]

I suspect there could be a valid legal challenge if some company got you to buy a bunch of stuff (or create it or, worse yet, pay professional content creators to build it custom) and then informed you that you had to choose between paying to keep what you already bought versus deletion with no opportunity to export. Some organizations with tens or even hundreds of thousands of US$ invested in inventory might find it worthwhile to fight. This is not a new discussion.

I don't think Linden is going to do this, but speculating about it really winds people up, though not as much as telling them their fear of change is killing puppies.

[Toxic Menges]

@shrug I don't think those who don't pay make no contribution, but conversely there has to be something extra to be had from paying your way in SL ... and if people don't pay then limiting their experience - via inventory limiting isn't going to stop them from using the service, just will make them evaluate their contribution. SL is probably one of the last few free lunches. As much as people bleat about having to pay... conversely, is it not unfair that people pay and do not get noticeable perks for paying to get an extra level of service? If you want a more substantial meal at Subway, you pay for a foot long... there's nothing wrong with paying to get extra.

[Pussycat Catnap]

I've struggled over 4 year old folders of freebies that I never even tried out when I first got them...

So, giving up your inventory, I can see that as no easy task.

If we were all willing to ditch our inventories at the drop of a hat, maybe many more of us would be in Blue Mars (and it would not have failed), Cloud Party, or Open Sim.

But my first question anytime someone tells me to go try out [virtual world X] is always "can I still have/look like myself?"
- and that has always been answered with a no. Then again I am unusual:

My avatar is not white.

But even that took inventory changes to achieve.

And then there's the neko and furry stuff.

And even the white-folks got their sexbeds, dancehuds, blingshoes, gunscripts, vehicles, houses, and well... stuff.
- They could maybe replace much of it.

But not exactly. And not without notable financial cost.

And here's a thought:

- Have we bought the virtual goods we have in SL, or a license to use them? Because if we bought them, someone could make an app to rip them out and take them over to say... Cloud Party. But if we just have a license, that would result in a legal nightmare...

Either way, people are going to go/stay where their inventories are.

The only exception is the sandboxers - the hardcore people who have a sandbox mentality. They want to goof around making half-projects, but don't bring product to market, and don't create a self with an identity wrapped in possessions and contacts. They are mobile - they can leave whatever world they're on at any time for one with better sandboxing tools.
- And... LLs core people are all sandboxers... Which IMO is why many of them no longer use SL, now that its grown beyond sandbox and become a world.

It became a world when SL itself got "an inventory" - all the builds and places and communities. That's an inventory that even a day one alt with no loot on her will feel bound to, if the owner of that alt knows that world's inventory.

[Pussycat Catnap]

All of the above said.

I really don't need to do any more shopping.

Nor does anyone else.

I don't do it in say... an MMO. Nor even in Sims.

I do it here because its a one time fee, and it gives my avatar new looks. Its play.

Shopping is play. Dressing up the avatar is play.

If a fee came about I would do two things right away:

1. Stop shopping. There are other forms of play and I have found myself capable of being entertained in a 3D world without buying stuff for my cartoons.

2. Start deleting those 4 year old folders of freebies. I could get cruel if I had to.

This entire scheme seems designed to do one thing:

Come up with money that was formerly being contributed by merchants who rented land.

Only problem is it does none of that. It puts money in LLs hands. What is needed is to keep money moving around between residents in world. What is needed is a way to keep venues alive.

- Only ways to address that are ways that make people give each other money, and make land affordable.

A fee on inventories is pointless for meeting any of the problems SL faces. I am baffled as to why it is even being suggested.

It is like seeing dirty water in the lake, and so deciding now is the time to require everyone buy blue shirts.

What is the connection?

My ideas about forcing merchants back to land at -least- have a connection.

The also great idea about lowering tier costs has an even better connection.

But what connection to the problems of SL does inventory have?

NONE.

[Shockwave Yareach]

I pay to be in SL. Handsomely too, as I used to have an island and thus a 8K parcel is what I consider to be minimum sized for my mixed use (public on ground, mazes on stilts, dev area and private quarters in skybox). I no longer have a premium as LL screwed me over with the price increase on the islands, and I have zero reason to have a premium anymore.

After losing my home, watching the Zindra debacle, seeing OUR property get taken away from us (no matter that we have receipts), and watching LL mismanage the grid time and time again, only my remaining friends and inventory keep me in SL. And the more LL looks to raise prices instead of making more by raising VOLUME of land owners, the less populated and less relevant SL becomes.

No matter what the year, making more customers by reducing margin generates more end profit. Who makes more -- Ford or Buggati? Ford makes a grand profit off millions of cars every year whereas Buggati makes a hundred grand off each one it sells at 1.4M$ a pop, but only sells 315 of them, ever. (here's a hint: Ford makes big profits where Buggati doesn't.)

[Desmond Shang]

I'm not sure that 'pay as you go' inventory is ever going to work, any more than other cost centers could work that way ~ imagine a 'pay as you go' abuse report system, or 'pay as you go' voice chat for instance. It might work; it might not. But what I do see is basically a huge rejection of the idea, far preferring the status quo. In other words: very high land tier.

Incidentally ~ it's that very high land tier that makes land barony and vast private estates possible. If land prices fall, nobody needs a land baron any more.

In SL terms, there's this incredible... well, the only thing I can label it is 'conservatism' on the part of most people.

Look at it closely.

~ Extremely strong resistance to socialising the costs of the grid whatsoever, even in small incremental costs. People with laptops and high speed internet connexions are upset over not getting infinite, indefinite cloud services for free in SL.

~ Comfortable with extremely high inherent inequality and privileges. When it comes to the landed gentry versus everyone else. Their high land payments give them near absolute land authority in proportion to the land they have. Upset a few major land barons and you could lose access to something like 25% of the grid, just on their whim. Better all that, than pay a few bucks a month for SL?

~ Quiet faith in a sort of 'trickle down' theory, that content creators will take their earnings from an utterly free marketplace and reinvest decent amounts of it back to the grid. Evidence for this is anecdotal at best, beyond the obvious wealthy creator~baron regions. Anyone simply carting the money off in wheelbarrows can do so pretty much invisibly.

~ Belief that there's an equal playing field of sorts for content creators; when in fact few stand any chance if they aren't already a professional content creator. Successful content creators these days produce on the level of professional game studios, with comparable business skills. There are a few exceptions but typically a new resident has about as much chance of being a successful content creator these days, as they do starting a real world oil company. It's far more than 99% of anyone could ever possibly do.

~ There's a lot more, but this is enough to shine a light on it.

* * * * *

I'm not casting judgement on this, or anyone. Just simply making an observation. Obviously I do pretty well with the status quo myself. But that's only possible because land tier is extremely high, there's an entrenched sort of aristocratic system from long ago, and the real costs (and opportunities) of the grid aren't socialised across the general population.

Maybe the révolution française of SL is coming, and the aristocracy will fall... but seeing the reaction to Hamlet's subversive ideas, that day certainly isn't today.

[Metacam Oh]

Excellent comment Desmond. We are really debating something that is pointless anyway, like some have said before, it would cost the Lab too much to rework the inventory to any sort of new system.

I think that's really the main problem with everything with them at this point, they may never admit it, but I believe they have coded themselves into a dead end. There is no ambition from the Second Life team, not enough resources to really recode Second Life to survive the future.

They need to open the grid up from the walled garden, start letting people mess with it, open source, just look at Minecraft. If Minecraft didn't allow people to modify the code and do what the community has done, you think Mojang would have made 90 million last year? The game has been given legs it wouldn't have been if Mojang was Linden Lab.

But this is all a pipe dream, I'm afraid they have probably committed to milking the dying cow, and the rest of us can really just speculate about ways to save them that they would never implement to pass the time until the death.

Maybe someone will buy Second Life. We can hope. The Lab just doesn't seem to have a clue.

[CronoCloud Creeggan]

I'm wondering if some of you Gloomypants are using the same SL I'm using. You know, the SL that is very solid and stable and doesn't crash (unless I do some VERY specific things). The SL where I can cross region borders at will without crashing. The SL that I can count the number of failed marketplace deliveries over the past years of it's existence on the fingers of one hand? The SL where I don't lose inventory and it loads in a short period of time after logging in.

@Shockwave:

LL doesn't want more volume at the expense of income. Suppose they drop prices and people get more regions...unless they bought double the number LL would actually lose money. Not only that but they'd have to directly support more users, and they don't want that because here is that they'd see.

"O hai, my car is broken and I can't afford teir for a couple of months can you give me special treatment and freeze my region? No? But then I'll have to pay the setup fee again. What, it's not your fault I really can barely afford a region in the first place and I should have rented a 2048 from an ebil land baron? I'm gonna sue!"

or

"O hai, I just got a region and I want it moved right next to my SL boyfriend's region."

And then the next week.

"waaaah, my SL boyfriend was cheating on me so I want my region moved next to my new SL boyfriend's region"

They don't want to deal with that stuff which is why region pricing is what it is, they WANT the ebil land barons to have to deal with that, not them.

@Des, my favorite Ebil Land Baron.

This aristocracy you describe is what Gwyneth LLewelyn called "the 100000". You-know-who might call them the "enablers of the FIC" or "Desmond's burghers" or something like that. I call them the "avatars of influence"

http://gwynethllewelyn.net/2008/10/13/the-hard-facts-about-the-second-life%C2%AE-economy/6/

That's page 6 of a LONG analysis of the SL economy.

@Metacam:

As for "0pening up the grid" that's what Opensim is for...because LL, and rightly so, isn't going to release their server code with the financial stuff for someone to figure out how to hack the L$ system.

One thing that LL has that most opensim worlds don't is an actual viable economy.

As for Minecraft, I bet most of the people who downloaded it at the prompting of an uber-geek friend played it once or twice and were put off by the total user-unfriendlyness of it and never played it again. Minecraft doesn't deserve the hype and it doesn't deserve to be sold at $26 dollars, it's still essentially a beta.

[Archangel Mortenwold]

Desmond, what if the land barons got a price reduction along with everyone else? Obviously it's not going to happen, but an across-the-board tier cut would preserve land barons' ability to turn a profit while passing along the savings to a larger, more consistent pool of renters.

All these ideas calling for raising prices in a depressed economy would be a huge disaster for LL if any one or more of them were implemented. Fewer and fewer people have money to spend on the basics, let alone luxuries like Second Life. Trying to milk a dwindling user base for every last drop is at best a short term "fix" that only works if the investments in other games pay off — and this requires a longer term wait-and-see scenario than Linden Lab likely has. It's trying to play catch-up in an environment that's constantly changing.

[Desmond Shang]

To answer your question Archangel, an across the board tier cut might work, to a point. Depends on a few things. If tier goes really low, the 'age of land barons' will be over (many wouldn't mind that I'm sure).

As even now it's hard to explain to some residents that helping them out for 5 hours every month, isn't worth the 5 dollars 'profit'... unless they someday rent a ton of land and quite autonomously so. The erudite oldbies who read blogs, are vastly outnumbered by the 'what's a group?' people; in fact some casual residents can play for *years* without picking up what many would consider as basics.

Not that saving land barons is any really big concern, except for the Rip Van Winkle problem ~ get rid of the barons, and much of their long term, paying but barely active clientele are simply going to quit SL at that point, also. This isn't speculation; this is fact. I've had to close some regions and it's blatantly clear that many longtime casual users simply leave forever when a region closes. Because RL is too busy, other interests, you name it.

For those who don't think these barely active people are a big loss... they are a huge percentage of the people who are paying for all the freetard's "free" infinite cloudserver inventories, voice bandwidth, abuse report processing, and so forth. Of course, none of it 'justifies' the land barony system per se; it's that Linden simply painted themselves into a corner with this one. Things could have been quite different. Crono has some interesting perspectives on why things became the way they are; most of it is simply history now.

* * * * *

As for ideas calling for raising prices... maybe I don't quite understand. Love it or hate it (and I'm lukewarm to it myself), it seems Hamlet's inventory idea would *lower* prices, to me. Possibly dramatically.

Consider, right now, any account can flog the asset cloudservers heavily ~ and will, with everything from freebies to sandboxy stuff. We implicitly have decided that as a group, all paying residents will cover the costs of *any and all* of that... indefinitely. A new resident determined not to spend one penny ever on SL will load themselves up with every last free thing, suck down bandwidth, run up voicechat expenses and sandbox all day, if they feel like it. Get rid of the infinite subsidy, and most of this behaviour will be curtailed immediately. Of course, some amount of subsidy makes sense; many 'freemium' models do work, and people are in fact "good content" to other people most of the time.

But what I'm seeing in the bigger picture is this: most residents *want* a high tier system. Because they just don't understand that not spreading out the costs, or not limiting the 'all you can eat' features for freetards directly results in high tier. Immediately and directly. *Someone* pays, and it's the people who pay for land and $L who pay for all of it. Every last little thing, from the serverside software licences that few think about, to the salaries of the abuse report handlers. Of course, most people in the world are worker bees and not entrepreneurs, but still this is fairly fundamental. Or maybe Linden is 'greedy' ~ they may be, but also realise they are in San Francisco, one of the highest cost areas in the world. It could make a lot of sense to move the company completely out of California if they want to get costs down; I say this as an owner of a California corporation myself.

Think of it this way ~ if SL was a restaurant and a free soup kitchen both at the same time, the cost of a steak sandwich would skyrocket in proportion to the masses chowing down on the free soup. If we wish to stop charging insane prices for steak sandwiches, the soup has to start costing at least ten cents. Even if heavily subsidised, there has to be *some* cost to it, otherwise it's essentially writing a blank check and allowing your restaurant to be straining, overrun and a collective miserable experience for everybody.

[Archangel Mortenwold]

The only thing charging an inventory maintenance fee would accomplish is to discourage users from buying virtual items knowing they have to pay even a modest fee for the "privilege" of keeping the items in their inventories in the first place. SL clothiers especially would be hard hit by the inventory charges, since they would face not only the loss of sales but the additional inventory charge as well. Linden Lab isn't all that bright when it comes to implementing policies, but it's not suicidal.

I disagree that most residents want a high tier system. As a renter in a privately owned region, I am having a very difficult time paying the rent and will likely have to give up my parcel. I simply haven't got the money to keep paying when I'm unable to get any real return on my investment (I'm currently trying to maintain a Bloodlines affiliate store). I'll probably end up having to give up the land when tier comes due in a month. If the tier were lower, it wouldn't be as big an issue. And I'm fairly sure I'm representative of the existing, dwindling renter base land barons rely on.

[Archangel Mortenwold]

And just to finish up, the bottom line is that high tier really is what's hurting everyone, including the land barons. With demand down because of high costs and lower wages, it's been put on the consumers to make up the difference. While this was a barely passable business model before the crash in '08, it is simply unsustainable in '13 — and the results are evident. Region losses galore are cutting into Linden Lab's profit margins, and that in part is what's driving the company to diversify its product line. But everything the Lab does is too little, too late, and it's not having the salvation effect it probably hoped.