SL Land Baron Argues Sim Tier Has Actually Become Quite Cost Effective

Desmond Shang is a longtime SL land baron and content creator, and he just wrote one of his classic epic replies to an NWN post that deserves being featured in its own post. Responding to the news that SL is on track to lose 6% of its costly private land this year, he points out that private sims have actually become a much better deal in recent months, and that it's a miracle SL still has privately rented land in the first place:

The grid is not really selling 'land' per se. What they are selling, is creative control in a shared environment. They are also selling 'something to do after dinner' for a great number of people as well.

There is a reason I characterise it this way. If, for instance you are in New York on a winter evening, and want to go out to catch dinner and a movie, you are going to spend easily 50 bucks. Even worse if you see a baseball game or concert. Bottom line is: even a nosebleed expensive online evening is very cheap, compared to real life experiences. Sure, maybe your bowling team night or fast food night out is cheaper, but not everyone lives that way. Just a couple martinis at a bar at 9pm will set you back 20 bucks, easily.

In that light, *any* online experience is embarrassingly inexpensive. Yes, there are experiences that are much cheaper, or even free. But I haven't seen McDonalds put Michelin starred restaurants out of business, and they never will. It's entirely possible to make real money off premium online experiences. Saying SL is expensive, is sort of like saying Bentley is expensive. Well, yes. The Chevy dealership is down the street, sir.

From this perspective, SL is actually a pretty good deal. Nobody's stopping anyone from starting their own OpenSim, or even playing Runescape for free for that matter. There's a time and place for that. Want a cheap online social, creative experience? Get a Minecraft server going. Run it from your house for free and invite all your friends. Just don't expect to be able to go shopping, or round off any of those little cubes littered around you.

Desmond notes a major change in private sims last year that got little attention -- or enough marketing push from Linden Lab:

All these private region owners, in some ways, had their value proposition increased by 33%, or for a slight cash increase, 50%, when the regions got more resources last December. "Price per prim" does not exactly translate into 33% more creative control, but it *is* a rough yardstick to measure by. Resource wise, SL *dropped* in cost by a huge, significant percentage. Tier for resources decreased dramatically. This is *on top* of the dramatic decrease in resource demands that became possible when mesh was enabled on the grid.

A modern region is also embarrassingly computationally powerful, compared to the old class 3 or 4 regions that we used to have. In terms of 2004, or 2007, or even 2009, what you can do nowadays was at the time, utterly impossible. Just approximating what we can do now, back in 2007 would have cost not hundreds, but thousands a month. Creative control is waaaay up, by hundreds of percent, for the same dollar. A homestead nowadays is 5000 mesh based prims and 20 functional avatars not lagged to a standstill... that's roughly on par with what an original region could do on a good day, for far less. And without the ridiculously inflated land auctions or weeks of waiting to get one; any of the major land barons can get you one pretty much instantly and won't care much what you do with it. Tier, effectively, is waaaay down.

I think their big failure is probably marketing... people still do not seem to understand what products are for. For example the whole Sansar thing. Your average person with an average job and an average laptop, is probably not going to have a cutting edge gaming rig with VR hardware. Not yet, anyway, and the market isn't very big. But corporations and government agencies who need immersive educational facilities will, and won't even blink at paying for a custom environment, or custom content. Using real dollars, not online brownie points. It's a niche product. That's great! So are Zamboni's; if you own a hockey rink a Zamboni is a great investment. It's probably not something the average commuter would drive, and trying to imagine that everyman's purpose for a Zamboni makes no sense.

And finally, regarding a possible 6% loss of regions on the grid, well, sure. This is a dot com era architecture and product. It's 2017 now! When SL came out, half the people in the USA literally didn't have broadband even if it was available to them, and most people had a Nokia candy bar shaped phone. In 2002, most consumers were still seriously wondering if they should keep their AOL accounts. Yet somehow, the SL online experience survived since then, where Star Wars Galaxies (and a lot of others) didn't. Of course SL income is way down from 10 years ago, but we should actually be surprised that it is still around at all.

Hard to disagree with any of that, though at the same time, few sim owners are likely to jump at these justifications. I mean, instead of paying $300 a month for a sim, they could, say, buy 4 to 5 AAA video games like the latest Fallout and GTA with massive worlds to explore and often customize, and their virtual entertainment needs would probably be covered for a full fricking year.

Comments

[Kitty Revolver]

This, of course, ignores the time and money that is put into building the sim and managing it. Blithe will be closing because the time and physical expense aren't worth it and it is run by two people. so $300 a month just to have the sim and then $100+ in time and money, that isn't cheap for most people to maintain. I think people are just finding it not worth the entire investment, hence the loss in sims. SL still has many more years left, just LL needs to find a way to keep people coming back rather than forcing us over to Sansar, which I don't have the computer or rig to run it so...

[Willow Dion]

I agree with Kitty. As more information about Sansar trickles out to us not anointed SL users. I have been watching the train wreck that is Sansar with growing trepidation. Increasingly lately I have been wondering what LL will do to try and force SL users into Sansar. Rescuing LL from their folly is not something I'm going to do. I look back and feel LL should have listened to the multitude SL users who can now say, "WE TOLD YOU SO!"

[sirhc deSantis]

Governor Shang has a point. Lets see, after rent, power, food and actually a rather good local net set up (sorry USA UK et al) lets say we have - oh, 125 bucks left max for fun a month. Telly leaves me meh (note to networks - after Defiance which I loved if it don't got 6 seasons already run I don't watch) so don't give a toss about it. Have lots of net... OK AA games (or whatever they are called) 1 a month? well is possible but hey - why? All the same. Got a Myst cd on the shelf (don't ask, was a divorce thing) and the last one to catch my eye was AM's Alice - oh look have that too....

So SL - hmm a decade on and still there personally. Yes, elsewhere too but... OpenSim is a lot of fun and could spend the same and get so much room but - ffs can run one hyper gridded region locally and get it all for sweet Fanny Adams :) So I do. Thanks Ferd.
A homestead on the mother ship with 5k LI equivalent == bloody good value if you take in to account the actual number of users - on the same base platform. For our entertainment buck well. Plus yay whatever I learn there I can take elsewhere - seriously, its no lose. Even experimenting with a 1024 and an MP store to make the rent - its still more than doable. Never seen rent so cheap hihi.

So yep - right now sitting on a store of open source OS code, viewer code, stuff wot i make, a bit of a presence in other grids, curiosity and well as ever a PC that was obsolete 6 years back and still best value ever. Sansar? Well now even there at least the lab are trying :) And hey can make my own grid plus still have SL....Maybe not a grid as have a few ideas. Have to see if the TS and D3D sales can finance .

[Shockwave]

Comparing the costs to a night out on the city is comparing apples to orangarangs. More apt is the following problem: I have 100 available per month for me to have fun with. I can have two dinners, two video games, four bluray movies... or i can rent a third of a sim in sl I cannot afford it all. If i get the good chunk o parcel in sl then all the cash is gone - no dinners or movies or whatever.

Sure I can get less land. Up to a point that is. The pricing of mainland is silly - the price for 50.001% of mainland is the same as 100% of a sim? Absurd. The objective is that get more people into sl and renting buying land. To start, we need to ask those dropping their land why they did so. Adding new blood does no good if there is a gaping wound it all pours out again. And the gaping wounds LL will address or die are: the land needed to have a vr world is too expensive, and the marketplace as it is today makes owning land to sell anything a suckers bet as your competition without land expenses undercuts your prices.

[Clara Seller]

It's always good to get the perspective of someone who has skin in the game of exploitation. I might also add that SL has helped people with disabilities and would argue that the cost of a $300.00 sim is much cheaper than health insurance... kinda.

Also the cost of a sim is pretty close to the cost of a monthly car payment. For most of us, our car only takes us within a certain radius of where we live while SL can allow us to connect with people all over the world. SL is also much cheaper than an airline ticket overseas. If possible, it would make perfect sense to ditch your car and use SL instead.

Since most average Americans spend at at least $2000.00 to $3000.00 a month on dining out, theater, and social entertainment, SL is just pennies by comparison. So seriously consider trimming back the health insurance for a family member, getting rid of one of your unnecessary cars, ditching a couple of friends you socialize with, or cutting out 120 of those fancy coffees you love so much. You may just find that SL land owning is the doorway to your sanity.

[Dusky]

LOL! Good one Clara, I agree. Satire aside, this is 2017 and not 2004. The value of SL land depreciated a long time ago. Unlike 2007, the year that I joined, land was in demand. The land, sky, and water didn't seem so old, and many people were making things and places, and wanted space to display their creations. Hopefully, we can see some true alternatives over the next five years. Then I won't have to wait for SL to lower tier fees, because a better option seriously wants my business.

[Desmond Shang]

Wow, didn't expect to be highlighted as such, but I guess I should have known the risk :) Fair enough!

Some reactions follow...

~ Regarding ignoring the time and expense to run a region: yep, if you have to pay 300 a month and work a lot, business had better be good. There aren't many (any?) business models that make a single $300 a month region expense 'worth it.' This has been true since 2007. From a pure business perspective though, the the #1 cost inefficiency isn't land. Typically it's the overwhelmingly long time that customer care takes, when typing. SL is a great place to make less than 50 cents an hour, unless you really, really know what you are doing.

~ Sansar. It's a different thing for different purposes. If there is such a thing as an "SL 2.0" I would daresay that Linden didn't make it, Adam Frisby and SineWave did.

~ Apples and oranges: indeed it is. Unfortunately, cheaper SL land isn't likely to work. Evidence: massive improvement of SL land's value proposition, via both mesh and prim increases, plus the opportunity to lower private region tier rate by 100 a month (!!!) didn't help much. The customer response to that, and anyone please correct me if I'm wrong: decreasing region numbers overall. They are in a bit of a catch 22, I think.

~ New residents these days, from what I've seen, are retained by the friends they make in SL and little else. Statistically, it's only a very late stage 'new resident' that cares at all about the cost of land. By the time they are buying 2000 $L to play around with, let alone any land, they have already made the decision to stay based on other factors.

~ Exploitation! Starbucks franchise owners would be outright robber barons, by that definition, since they charge *so* darn much for coffee. But as much as I'd like to think so, it doesn't make me a Bond movie villain to run an SL estate. Opensim's free. Percolate at home! You don't like the price of imaginary land on the internet. Well, nobody does, not even me. And, you are a meanie. No Rewards Stars for you!

~ Hamlet, interesting observation about 300 bucks covering a year's worth of high quality games. Technically correct, yes. But with even the tiniest bit of consideration, it's clear that a few thousand prims in a tenth of that area is enough to make a very compelling space (see: anything Penny Patton ever said on the matter). I don't think anyone *needs* 20k prims and an entire region of their own to be happy. Any more than anyone *needs* a Bentley. That's what smaller parcels, and Toyotas are for. There's also nothing stopping 10 friends from pitching in together and creating stuff together on a big parcel. That's the heart and soul of the grid, the most fun and the best memories, even though it sometimes takes a while for people to realise it.

* * * * *

Businesswise, 6 months later, has cutting private region tier by 1200 a year generated growth for Linden? Anyone who wanted to, could have participated in that. Has providing more resources generated growth? Have any measurable long term trends changed? Companies learn stuff, and the users are definitely teaching them something here.

[Clara Seller]

" I don't think anyone *needs* 20k prims and an entire region of their own to be happy. Any more than anyone *needs* a Bentley."

This is a very compelling argument. Average people should be happy being "small". They should have small dreams in little places. They should get a little piece of all that's being offered and band together in groups of 10 to share what is really designed for 1. Because the most important thing is that a small group of big people need to stuff themselves full of resources at everyone else's expense. It makes perfect sense. And a special "thank you" for so clearly setting the parameters of what little people should want to feel "satisfied". It does take us awhile longer than most before we "realize" that which is so obvious to those above us.

What doesn't make sense to me is why a company who has the ability to offer average people a chance to experience "bigness" doesn't see the obvious profit in making that offer? In the meantime, let them eat cake.

[Ham & Eggs]

@Clara, Brilliant Deconstruction! some of us "little people" want an entire private island with 5k prim alone to ourselves but only think $75 an month is fair in cost. after all, us little people have smaller pockets;) so we must deserve smaller dreams right?.

@ Desmond
"it's clear that a few thousand prims in a tenth of that area is enough to make a very compelling space (see: anything Penny Patton ever said on the matter)."

Ready to buy a new petite body if linden lab wants to change avatars to petite size, that would solve a ton of issues while creating a massive boom to the clothing business. they would have to do is create a Next-Gen system avatar (SOMETHING ALREADY DESPERATELY WANTED BY FASHION DESIGNERS), be it pint sized, then declaring the days of giant sized avatars a thing of the past, telling everyone to switch over.