Linden Lab lowers prices, estate owners rebel
Linden Lab is giving the air of being somewhat baffled this week. Earlier in the week, it lowered prices for new Second Life simulators -- because well, lower prices are good, aren't they?
Unfortunately instead of lavish praise for the price cut, response to the move seems to be more along the lines of "Argh! You sons of bitches!" (loosely paraphrased). There seems to be more depreciation than appreciation involved.
As we understand it there are a couple of factors involved behind the price cuts. If Linden Lab is still purchasing essentially the same basic make and model of hardware that it was when Class 5 servers rolled out in November 2006, well that server hardware has been on the market now for nearly a year and a half. We can expect the purchase price of that hardware to have dropped at least 10 or 15% by now, and perhaps more (though service agreements on top of the hardware costs may still be the lion's share of the total purchase price).
The new land store also is supposed to reduce manual involvement in the simulator purchasing and commissioning process. The details aren't clear, but it appears that servers will be able to be connected to the grid, loaded with the software and will go on stand-by, ready for simulators to be allocated and brought online without time-consuming and expensive human intervention.
Neither of these appear to affect ongoing operational costs, and indeed monthly fees for simulators remain the same.
Jack Linden of the Second Life Concierge Team gives the new pricing this way:
When the new Land Store launches, setup fees will be:
Normal Islands: USD$1000 setup
Normal Openspaces: USD$250 setup
Educational Islands: USD$700 setup
Educational Openspaces: USD$175 setup
These prices exclude VAT.
The land store is expected to go online around midweek next week.
If you ordered a normal simulator (not Openspace/void) in April, you can either cancel your order now for a full refund, and order again when the price drop becomes effective, if that is what you want to do; or you can get a free Openspace/void sim with six months of fees fully paid.
If you ordered a normal simulator between March 11 and March 31, you can obtain an Openspace/void sim with three months of fees fully paid.
If you had an Openspace/void sim delivered (note the difference between delivered and ordered) on or after April 1 you can cancel that for a full refund.
To take any of these options, you need to contact the Concierge team before the 16th.
The majority of reactions to the price changes seem to be angry or upset -- and not everyone we have spoken to seems to be even able to articulate why, but it is clear that they are not happy.
Ultimately, land in Second Life is in relatively constant supply, which makes it a commodity item unlike physical world real-estate. We suppose that that makes it prone to depreciation over time.
Should Linden Lab have maintained the higher prices and pocketed the profits to pay for additional support or offset future, more expensive hardware purchases?
