Thursday, 21 March 2013


With the steady loss of Secondlife islands, Linden Lab must be in a little bit of a panic. Rod humble must be pulling his hair out right now. Even if they are still profitable, these continuous losses must be scary stuff. Every island is an important source of revenue for Linden Lab. It's surprising they don't love their island customers enough to want to try and keep them.

I have been an estate owner since late 2005 and I currently still have 38 sims spread out over a few avatar accounts and also still have some mainland, mostly for nostalgic reasons.

My holding still make a profit but not much profit, it's very narrow. The big land barrons and Linden  Lab's Atlas program or should we say market killing Land Cartel, are finishing me off. I'm losing the will to provide a good service to my renters so I am considering throwing in the towel and dropping the remaining 38 sims slowly over the rest of the year. I will do it slowly so as not to distress my loyal customers and friends. I have been supporting a number of little niches, mainly RP stuff.

But in my mind, if the niches die, Secondlife dies. It is dying. Sims are disappearing weekly. I'm saddened by this.

I personally think Secondlife is a pretty friggin awesome bit of kit. But we must face facts, people can't afford the tier costs to do anything fun anymore. People really do need their own sims.

Alot of my renters are big plot renter, 1/4 sim to full sims. RPers need lots of land but with the current tier costs the RP communities are being decimated.

With the current sim losses, perhaps Linden Lab should start thinking that every sim counts. Every sim does count now. Every sim is important. Every brave soul that pays these high tier costs should be considered by Linden Lab as gold, they are gold to Linden Lab, they are money in the bank. Do they realsie it ? I don't know. The lack of communication with the community and the way they act feels like they are totally disconnected from their user base.

Hey Linden Lab, people want your island product but you've price it so high they can't get it. In fact, converted, passionate, real customers are giving up their land every week. They are speaking to you through their actions.

Do Linden Lab care about their golden sim owning customers ?
In 8 years and hundreds of thousands of dollars spent in tier, do you know what ? I've never had an email from Linden Lab saying : You are a valuable customer, is there anything we can help you with ?

What happens to a company that doesn't care about it's customers ?
What happens to a company who doesn't speak to it's customers ?
What happens to a company that forgets who their real customers are ?

Every single sim owner should be considered an important source of revenue even if they only have 1  sim.

How long will Linden Lab survive with these relentless losses of islands and revenue ?
Doesn't look good to me

Word on the grapevine is that even top creators are feeling it too. Even successful sim owning creators are dropping sims.

I'm getting out of the land game. In fact Linden Lab killed the land game, killed the game mechanic when they introduced their Land Cartel, oops sorry, I mean Atlas program. Atlas, the Greek Titan is supposed to hold the world up on his shoulders, but in this case Atlas just killed the Secondlife land game mechanic. This is all very ironic since Linden Lab have been frantically trying to pull a new game out of the bag - Creatorverse, Patterns, Dio.  They all cost more to develop than they'll ever make in revenue.

I'm not saying all this to bash Linden Lab or to bash Secondlife. I'm saying it because I don't want Secondlife to die and all the signs point to serious decay. Maybe if Linden Lab started treating every sim owner as a golden goose maybe they could turn this around and stabilize the grid. But mark my words, if tier costs don't come down Secondlife will be no more.

Will Linden Lab be able to stop the losses and stabilize the grid and the SL economy ?

Thursday, 14 March 2013


The loss of Second Life island discounts for educational and non profit institutions was an unmitigated disaster for Second Life. EDU and non profit groups added much needed gravitas to the Second Life Grid. They gave Second  life a weight and a interest that doesn't exist without them. EDUs had a stabilising and energising effect on the whole ecosystem. Equally so for several non profit organisations. So it's good news to hear that Linden Lab are making 'customer win-back efforts'.
(Full story Here)

But unfortunately, even if they win back 200 EDU sims, which is unlikely, That would only represent the equivalent of approx one months losses at the current rate of decline. As Linden Lab is losing, on average 50 sims a week, 200 sims per month. These are very serious losses. Second Life and Linden Lab are not coasting, they are slowing bleeding to death. The sim bleed is so relentless that in less than 24 months Linden Lab could be operating at cost if they do not stabilise the grid and stop the bleed.

There are two meta-factors causing Second Life island ownership to decline. These two factors are so powerful that no other factor can be considered to be causing the losses until these meta-factors are addressed and the decline will continue

Factor 1 - Tier cost
Tier cost is so high it is actually driving customers away from a product they desire. There is no lack of people wanting to use Second life for thousands of myriad of projects. But there is a serious lack of people ready to spend $1000 USD set-up fee and $295 USD per month, every month.

Let's be really realistic. Tier costs are way too high, confirmed by people abandoning sims at a steady rate. This is not going to improve until tier costs are lowered dramatically - Fact

Factor 2 - The Land Cartel - Special Friends and Special Deals
When Linden Lab introduced the ATLAS Program (discounts for big land barons), they killed Second Life's most important game and game mechanic. They destroyed the land game and effectively created a Land Cartel. Combined with Linden Lab's Land Monopoly we're now facing market failure.

Monopolies and cartels are pernicious and corrosive in all businesses. There is loads of data to prove they cause market failure through stagnation. There is less choice for the customer, High barrier to entry, no new players can enter the market, no need for existing players to improve their product and service. Stagnation and market failure always follow.

Governments break up cartels and monopolies for exactly for this reason. There are very strict Anti-Competition laws in California where Linden Lab is based and in the real world the ATLAS Program and it's secret deals would clearly be in breach of those Anti-Competition laws. In fact since Second Life is an open platform it could be argued Linden Lab may actually be in breach of Californian Anti-Competition laws in this regard. The ATLAS program is basically unfair and kills competition.

No new players can enter the market, nobody can bootstrap themselves to success. Nobody is going to get a sim a try to monetise via creating a new land rental business. Everyone knows the land business is sewn up and the big fish are eating the little fish. No new players can compete with the discounts the big land barons get - So there are no new players - GAME OVER

We can infer from the above that Linden Lab's business model is now completely borked. The ATLAS Program/Land Cartel is killing the Second Life Grid by offering discounts only to a hand full of customers (Land Barons) instead of to the community at large. It's the community at large that deserves and needs the discount not the 'Land Baron Middle Men'

No wonder Linden Lab is losing islands and money every week. Without dramatic change to their business model and land pricing we should not be surprised if this loss of sims and revenue continues

Linden Lab's only option to stabilise the land market and stimulate growth is to break the land cartel and equalise land prices for all.

Tier cost should be low enough that Educational and Non Profits don't need a discount.
Tier cost should be low enough that everybody and anybody who wants to, can own their own sim. That's the real product Linden Lab should be selling - Sim Ownership for all.

For Second Life to be a free and fair world there should be no secret special deals with special friends. Restore the land game mechanic, break the land cartel - equal pricing for all, lower tier, drop purchase barriers like set-up fees, let anyone buy a Homestead and see sim ownership and the Second Life ecosystem boom.

Linden Lab stop playing favourites.
Make friends with your real customers, there's thousands of them, they love your virtual island product  they want one, but they can't afford one. They've been waiting a long time for you to do the right thing,