Crap Mariner has a good blog post about Circle Brooms Laurel Arts Isle succumbing to the tier conundrum and having to close down. What’s good about Crap’s post is that it delves into why places are special for people.
Daniel Voyager on the other hand has a post about The Cartoonimals sim not closing down after it was purchased by Ima Flanagan.
Hamlet Au, in his disappointingly named Sim Deathwatch series has recently been talking about the International Space Flight Museum Sim closing down, but now being saved, for a while at least, which you can read about here. Betterverse Non profits has more information on this, in this blog post, which links to the International Space Flight Museum’s official blog, where there’s a post on the subject, and where they point to how you can help to fund them via donations.
Prior to this we had news that Bryn Oh’s Immersiva was closing, but a crowdfunder on indiegogo appears to have saved that for now. All of these issues highlight the problems of keeping experiences alive in Second Life, but the big issue, the issue that needs to be addressed by Linden Lab, is that of Tier.
There is one big problem with calls for Linden Lab to lower tier, that is that they need to find other revenue streams before they do that and I see no signs so far that new revenue streams are being introduced. I have sympathy with Linden Lab here and some would argue that the sheer number of sims still on the grid is evidence that users will bear the costs of tier, it’s a rather decent argument but in the long term, it’s one that creaks at the foundations, tier simply has to come down.
Linden Lab’s recent developments with Pathfinding, which will help to improve the usability of NPC’s and help people create better experiences for people, will be neutered due to tier costs, a game sim doesn’t generate money like a store does, but then we come to the issue of stores inworld anyway, the marketplace and the soon to be delivered, direct delivery, make having an inworld store less of a necessity, with a shop link in the viewer it’s silly of merchants not to have a marketplace presence, Linden Lab promote the marketplace very well, but at what cost?
Stores used to help to subsidise art sims, they certainly help to subsidise roleplaying sims, but if the traffic is going to the marketplace, that subsidy starts to fragment and those sims start to struggle to exist. This is a vicious circle because with less experiences to enjoy, Second Life becomes less appealing for a wider audience, the opportunity to attract new people looms large with new features being developed by Linden Lab, but tier prices undermine that appeal.
However, we come back to me having a lot of sympathy for Linden Lab here, it would be economic suicide for them to cut tier by a large chunk without developing new revenue streams, so what options do they have? Well one thing they might like to consider is charging people by the day for having a sim, rather than by the month. The pro-rata daily rate would be higher than for daily rate on the monthly plan, but if an art venue only wants to exhibit at certain times and is unusued for other parts of the month, put it into hibernation. This of course would mean work on Linden Lab’s part to enable this sort of billing and allowing users to shut their sims off from the world, but it’s something they should consider. This could work not just for arts venues, but for clubs too.
However this wouldn’t address the issue of roleplaying sims or art installations that want to be open 24/7, honestly, what can Linden Lab do to make tier more enticing so that these ventures can thrive? One idea I guess would be to make it easier for groups of people to be billed for a sim’s existence, there is currently no option for more than one person to pay the bills on a private sim, or maybe Linden Lab could go back to the idea of allowing people to donate their tier free allowance to private sims, this has been discussed, yes it would cut into Linden Lab’s profits, but it’s an option that allows people to contribute to the sim they love, without Linden Lab having to cut tier dramatically, I think this may be the way forward although long term, tier simply needs to come down.
With all due respect IMHO you article is based on a false premise – that LL need another revenue stream to replace lost income if they lower tier. Why false? because the Homestead fiasco revealed that when LL offered a better product at a cheaper price – they could not keep up with demand. Now they have a much more stable platform, and lowered resource demands – they could easily adjust their pricing and offerings, stimulate the economy, and garner more profit.
Also you have not allowed for the fact that storage, and traffic costs have declined dramatically over the years – they actually generate more profit each year on the same ‘product’ as evidenced by Rodviks public statements that they have had their best quarter ever during his tenure.
Good point about homesteads, they are an example of a different land product that was popular, more land products could be offered, my suggestion about sims not needing to be online 24/7 and therefore lowering the costs to an owner were along the lines of different land products.
I’m not sure how Linden Lab manage their servers, whether they lease or buy, they don’t seem to have moved to that many more class 7 servers, which are presumably more cost efficient.
You both raise an interesting conundrum on tier.
Yes, the current price is high, and yes, currently tier accounts for approximately 80% of LL’s revenue (as indicated by Peter Gray (Pete Linden) in a comment to Hamlet last year).
Ergo, there has to be a balance between lower tier and maintaining revenue.
Homesteads actually raise an interesting point – as does last year’s “Land Sale”, which also demonstrated that give people the right incentive, and they will (at least initially) jump for land.
Obviously, the latter came unravelled as the otherwise downward trend in region losses did continue; I’m actually under clear as to how many (if any at all) of the sims obtained in the “sale” ended up being returned – but it is clear that the Sale itself wasn’t sufficient to change an underlying problem which can be traced to tier.
But both do raise the point that *were* LL to lower tier – just how much of a hit would they take on the revenue side? The Land Sale points to a case being made that were LL to simply reduce the ridiculous “set-up” fees to something more reasonable and tie that to a even a modest drop in tier, then demand might well compensate for any lasting drop in tier that might otherwise be experienced.
Clearly, caution is required, as there is also a knock-on effect for estate owners and Mainland holders: make land too readily available and supply will rapidly outstrip demand and cause a glut that could be as damaging as the current situation – or exacerbate it.
Scrapping set-up fees also (obviously) isn’t much of a sinecure for those who have already paid-out to obtain their sims, compared to a substantive reduction in tier. In some ways, that can’t be helped – and it is fair to say any restructuring is liable to hit one or other sector of the land community… But a combination of the two (dropping / lowering set-up fees & easing tier), were LL to consider it, might serve as a starting-point in easing concerns and showing the Lab is willing to look at options as best they can while they (hopefully) explore other avenues.
On-demand usage is also something that might be considered – but that isn’t going to happen overnight or soon, I’d expect. Doing a Kitely (so to speak) is going to require time and effort on LL’s part, I’d suspect.
So the conundrum will continue to have brains cogitating…
Indeed, there are no quick solutions, I do think that 80% of revenue via tier stat needs to be addressed though, it is too much of a reliance on tier and more creative ways need to be found, but there is no quick and easy fix here and you’re very correct to say that caution is required.
is a good idea, some kind of new offering along the lines of homesteads rebranded like has been mentioned, without the need to purchase a full sim as well
will maybe cause problems for large estates this tho. linden kinda boxed themselves in when they went down the path of tying homesteads to full sims. can understand why they done it at the time tho. linden could discount any new offering for estates and onwers of full sims. say $100-125 for a rebranded homestead. $75-100 if you also own a full sim(s). some kinda sliding scale maybe to allow estates a bit of room to still attract tenants
will linden sell more of these is the biggie over the long term? probably i think. will also broaden their direct tier paying base. that would be the main idea behind anything like this i think
Back in the day when the Open space fiasco was at its height I suggested that a way to protect the investment of current owners was to lower their tier so they could still rent regions but allow others to buy them for a higher tier direct from Linden Lab, this would still have meant losses as people prefer dealing directly with Linden Lab (which is understandable) but it would have meant those who had invested early would still have a market to compete in.