A long time ago, in a galaxy far far away, Linden Lab decided to ditch the subscription model and introduce a free to play model, this was all the way back in 2006. Some people still, to this day, feel this was a bad idea. However the numbers tell a somewhat different story.
Second Life was way ahead of the curve in moving away from the subscription model. However coming on for eight years later after that brave change, Second Life is in many ways at a new crossroads and it may well be getting close to the time for plan c.
There’s an argument that if Linden Lab were to half tier prices, there would be an explosion in demand for land that would make up for those lower prices. I don’t buy this argument, but beyond that, I think it would be a crazy gamble for Linden Lab, at this time. However I do firmly believe that Linden Lab need to move away from tier being such a major backbone of their income model.
I’ll link to the same article about how going free to play saved Star Wars The Old Republic as I did in my last post, however this time I’ll quote a different point:
Many of the positive changes were made while players were still leaving, but the impact would not be felt until much later. The group finder was introduced in the third update, and BioWare began the process of free character transfers and server merges. (Yes, he called them server merges.) Ohlen told the audience, “One of the major things you want in an MMORPG is the feeling that there are lots of players playing with you and an easy way of finding friends to adventure with.” These two key additions helped make the next major change that much more successful.
This of course applies to SWTOR, not Second Life but the idea of being able to find people, socialise and have fun are important concepts for Second Life and people in Second Life do like to adventure, some as Orcs as I’ve discussed before but also in all sorts of other forms. However Second Life isn’t really in the position to merge servers, this would cause chaos on the mainland, although in terms of private regions it is unfortunately happening naturally.
In my last post I discussed how Elder Scrolls Online is following a subscription model that is somewhat flawed these days but still makes a degree of sense in the first place in terms of income. Second Life is in that position with tier income, although it is falling it is still bringing home the bacon, but the graph lines are showing a decrease so it’s time to explore other avenues for income.
They have looked at this a couple of times in terms of advertising on Second Life properties, but the rates they’ve advertised to Second Life users have been pretty high, which shows that they have their hearts in the right place but they haven’t got the balance of offerings quite right.
New land products may help and I’ve mentioned before how I think there’s potential to introduce part time sims, whereby they might only be open at the weekend and therefore people pay a reduced tier rate because one of the things Second Life needs to offer is something for people to do.
I’m sure people can come up with plenty of other ideas and I’ve seen some good discussions around on forums with suggestions for the new CEO to take onboard. Second Life needs new users and it needs to retain existing users and even give them reasons to buy new services.
The tier model is ill, it’s far from being on life support but the way things are heading mean that it is moving towards being a busted flush. At the moment, the tier model is still healthy for Linden Lab, which means they are in a good position to explore other options to generate income, now is the time to do that, well before it becomes a serious issue.
I believe Linden Lab *should* cut their tier prices in half, but only after they’ve established a manner to subsidize that move appropriately with a growth model initiative catering to their freemium model of content and interaction.
And there’s my “executive speak” for the month.
I very much agree with your executive speak! They need an alternative growth model.
As long as the business world refuses to price as low as possible they will all continue to struggle, risking the entire business in the process. Yet this walmart model which we know works because it is in all of our faces still seems to be ignored out of pure greed. Businesses seem to be in business these days to suck as much out of it as they can before it crashes.
If LL were to cut tier by 75% all of those that have been moving to other grids would be back, new sims would be created in volumes like the old days. I know you don’t buy this but you don’t say why, that’s not good enough. The fact is so many are leaving exactly because they have found the same LL has to offer for less money; they are willing to give up on scripts working as well as they do in SL and have a much much less population and in turn traffic to cut costs. The only way to be the best is to compete, as far as operating systems goes SL wins hands down but they are losing the pricing war which could cost them their entire business if they don’t wake up soon.
I don’t buy the fact that dropping tier pricing will result in enough people purchasing islands at the new rate to make up for the shortfall caused by the drop.
I do agree with you that some people would return if tier were dramatically reduced, I just don’t think enough people would return.
I certainly agree that people go elsewhere due to the tier pricing, I’m certainly in the tier is too damn high camp.
More m2 per tier level for premium members!
More mainland auctions!
Allow private sims to be connected to mainland if they are to be open (i would love to have my sim linked to zindra and then it would be open for all adult residents for sure!).
And yes, tiers are to damn high, a true good move from LL would be to offer speacial prices to venues that would support cultural activities!
Music and art venues should get a real discount as on monthly tiers and LL should create a new class of regions on mainland to accommodate them!