Should Second Life Reduce Land Fees to Encourage Growth?

If recent information surrounding the land leasing rates of Blue Mars is accurate, Second Life may have a real competition on its hands.

That's because the Blue Mars land leasing system is rumored to be not only simpler to use, but cheaper than the Second Life tier system.

Starved for competition for so long, Second Life might not be able to compete with an upstart new virtual world unless it re-evaluates its business model and gets back into fighting shape.

The Expanding Fishbowl

Second Life may be growing at a steady clip, but increased competition from virtual environments like OpenSim and Blue Mars over the next few years means Linden Lab's position as a dominant world is no longer the unquestioned force it once was. Both OpenSim and Blue Mars offer different variations on land ownership, and both are taking aim at Second Life's costly tier system.

The cost of owning an island in Second Life is very real. Residents can expect to shell out up to $1,000 in initial purchase fees, as well as up to $295 in monthly maintenance fees. By comparison, the Blue Mars "renting" system is expected to cost only 50% of Second Life's fees - however, the final figures are still under a non-disclosure agreement.

OpenSim is the runaway bargain in virtual land. Ranging from free to a few hundred dollars for regions equivalent in size to Second Life land masses, OpenSim provides a low-cost alternative to the Second Life system.

The question is: How long can Second Life keep its tier and land purchasing rates at their current levels before users begin moving to new worlds with cheaper costs and - in the case of Blue Mars - standardized development tools?

Voices of Discontent

The discussion in favor of altering land rates has found a home on the Second Life forum earlier this month, providing an interesting case study in the attitudes of Linden Lab's consumers. While many are unhappy with the current tier costs, few expect the honchos over at Linden to do anything until they feel the burn of lost business.

By then, however, it could be too late. We wrote a piece recently about the perils of being a monopoly in an emergent field like virtual worlds that discussed when customers will leave one provider for another. After discussion on both our Facebook Fan Page and in our comments section, readers seemed to agree that the exodus from Second Life would only occur if a new provider offered a better platform and lower rates.

Unfortunately for Second Life, two growing competitors are offering just that. While Linden Lab may not experience one decisive blow to its customer base, the rise of competitors and Linden Lab's unwillingness to adjust rates in response to changing realities will slowly bleed the company of its creative base.

What happens then?

Comments

[Zauber Exonar]

It may actually be a bad idea for Linden Lab to try and encourage growth. During the weekends, when there's a greater amount of concurrent users, Second Life's servers buckle under all the strain, and breakages occur. If Second Life, in its current state, experienced growth, it would not be able to handle it, and we might even see a grid-wide crash for the first time in a few years. If Linden Lab wants to encourage growth, the first thing they need to do is improve their hardware and their networks so that it can handle the extra load.

[Prokofy Neva]

You seem determined to ring every single technocommunist chime that has been rung already in the Metaverse 5 years ago and 2 years ago again when the corporations came in and the consultants needed to figure out how to maximize their own fees but reduce their clients' costs (hence the copyleftist rants demanding that content be free, and hence the anti-capitalist rants about land being a commodity and "costing too much").

Blue Mars doesn't have user-generated content, have you grasped that yet?! You can't just come in and rez a prim and sell it. There is no open creation or economy system. There is only an elite system for extra-world content creation that is then approved by the devs.

What you pay for in SL is not just the server rack space but access to a 3-d interactive streaming world with the component of building tools right in the client and the economy accessible to everyone, and you pay for the ability to access everyone else's content, and these costs for maintaining the servers, staff, and assets aren't just "the $75 for a sim I could run in my basement" that geeks always rant about.

I've tried Open Sims "bargain". It's a joke. Open Life had no groups or search or ability to have an economy with currency and sales interfaces. They conceive of this as mere "plug-ins" that they might add later. Perhaps they are adding them; perhaps not. It is not integrated into the vision of the world.

You don't see the stampede to Open Sim that you would see if what you say is true, a year ago, or 2 months ago, there would be a massive migration if this platform is viable -- but it is not ready yet and even when it is, it has a decidedly utopianist technocommunist vision not unlike the one the Lindens began with, and they were forced to jettison it when they decided to grow up and become a real business and not a sandbox.

The problem isnt' that I or someone else groaning at your posts are fanboyz -- I'm one of the leading critics of SL. But your criticism is based on an ideological default which you bring from Silicon Valley/your clients that you represent in your lobbyist firm in DC which isn't tethered in the reality of business, property, and economy for most people. Most people are not living inside a Cory Doctorow novel or Chris Anderson book pretending everything is cheap or free -- except their lecture fees.

[PixPol]

Thanks for the insightful comment, Prokofy!

Just for clarity, it should be noted (and I think I mentioned this to you before) that I don't actually represent any clients related to virtual worlds/Second Life.

You raise interesting points about Blue Mars, which we covered about a month ago. The registration system for creation is curious, but it's definitely gaining a following.

[Troy McConaghy]

Cost isn't the only factor to consider when making a buying decision. If it were, people would buy the only the cheapest foods at the supermarket, but that's not what happens.

Long live the kiwi fruit!

[Lalo Telling]

If land costs are lowered in SL, will "barons" lower their rents? Will vendor space rental become less expensive, too? Will the resultant lower operating budgets of content creators lessen the economic impact of unauthorized copy and distribution of their creations, a.k.a. "IP theft"?

Or will the thin line between "profit motive" and greed become more visible, when rents are not lowered to reflect a reduction in initial purchase price and tier? We shall see...

Meanwhile, Troy is correct: Those who can will pay extra (within reason, of course) for quality, variety, and novelty.

[Danielle Eber]

Prokofy said "Blue Mars doesn't have user-generated content, have you grasped that yet?! You can't just come in and rez a prim and sell it. There is no open creation or economy system. There is only an elite system for extra-world content creation that is then approved by the devs."

You are off base about that. I'm a nobody. Someone who has played in SL for three years, built a few houses for myself, half-owned a club for a while, have a newbie store. I requested and recieved the City Developer kit for Blue Mars. Cost? Zero. If you click on my link, you can see that in fact making prims is exactly what I have done (along with a 2km sized island).

It's just done in sandbox mode on my home PC, instead of live on their system. If I decide to sell any of the furniture or buildings I have been messing around with, the account is already there to upload my items.

Now, its true their economy is not running yet. That's due in a later release of their software. But as far as I know, there is nothing stopping me from selling my stuff if I wanted to.

An additional benefit of creating offline is I am not limited to their system for selling or trading things. My "finished product" is a set of files (.cgf for geometry, .mtl for materials, and .dds or .tif for textures). I can package that up and sell or give it away any way that people can trade files. That is *not* easy to do in Second Life.