Linden Labs changes Openspace Pricing Policy

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Patroklus Murakami
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Linden Labs changes Openspace Pricing Policy

Post by Patroklus Murakami »

See the latest Linden Labs blog post here.

In summary:

  • From 1 January 2009, openspace tier payments go up from US$ 75/month to $ 125/month with no 'grandfathering'. That means they all go up irrespective of when they were bought.

    The upfront fee for brand new openspaces goes up from $ 250 to $ 375 (also from 1 January).

    For anyone owning class 4 Openspaces on January 1st, they will be upgraded to class 5 by end of January, to further improve the experience people have on those regions.

    Effective immediately, Linden Labs will no longer offer an educational or non-profit discount for new Openspaces.

There are some other changes too outlined in the blog post but these seem to be the most relevant for us. The rationale is that void sims haven't been used the way that LL anticipated. People have been carving them up into quarters and renting them out and that's put more load on the servers than LL anticipated (they thought they'd be used to create ocean and wilderness spaces with few people choosing to 'live' on them). The quid pro quo for the price increase is supposedly that the class 5 voids will be able to cope with heavier 'light' use better.

Sorry to be the bearer of bad tidings. We will need to factor in these new facts in to the economics of the proposed 'Monastery' sim and see what it does to the numbers. No need to give up yet though, let's look at what the new numbers mean.

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Re: Linden Labs changes Openspace Pricing Policy

Post by Patroklus Murakami »

Oh, and the blogosphere is ablaze! Check out 'World of SL', there are tons of angry posts about this.

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Re: Linden Labs changes Openspace Pricing Policy

Post by Timo Gufler »

So, bad news for openspace owners, especially for Europeans who already have to pay more for weakening Euro... But there is also something positive: LL didn't increase pricing of normal sims hence tiers of them won't change.

Timo

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Re: Linden Labs changes Openspace Pricing Policy

Post by Rose Springvale »

This will bring many changes to SL, some good, some awful. But as it relates to the project we are considering, i'll reiterate my position from the guild meeting Sunday... what is proposed by the Monastery project is EXACTLY what LL does not want to see an openspace used for. I think we should continue reviewing the project, but look at it as a FULL sim project. It might take a little longer to be ready to use it, but at least we won't be told to take it down due to abuse.

Another consideration: Education and non profit discounts no longer apply to openspaces, but the DO apply to full sims. With the pricing change, for a non profit, the difference between the tier on an open space and a full sim is a mere 25 USD. In my other ventures, i suspect i'll convert from open spaces to full sims, especially if there is any break in conversion and/or transfer fees.

Just another thing to keep in mind as we look toward growth.

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Re: Linden Labs changes Openspace Pricing Policy

Post by Sudane Erato »

I'd like to take a moment to study the real details of what has been announced by LL, and also to express why I suspect they will pull back from this decision. (warning note: Sudane has been wrong before, but........)

As Pat has said, LL announced last night that primarily because of "misuse of openspace sims", and the accompanying performance problems and increased support time that this causes, they are taking the following steps, some immediately and others on January 1.

1. Openspace prices and fees change on the 1st January with no grandfathering. (Setup goes from US$250 to US$375, and tier goes from US$75 (or US$50 in some cases) to US125)(Grandfathering means that the fee would not change for those sims already paying a certain fee... i.e. we pay only US$195/month for NFS and CN despite the fact that all new sims cost their owners US$295/month. NFS and CN are "grandfathered" at the old rates. The new policy would NOT grandfather the old rates on existing void sims... their tier will go up too).

2. Class 4 Openspaces will be upgraded to class 5 in January. (This is why some openspaces will go from US$50 to US$125... the $50 ones are on the old Class 4 servers).

3. Educator discount is no longer available for Openspaces.

4. No Owner switching for Openspaces unless it’s a full transfer of Payor. (This issue affects no one that I'm aware of... its not a common policy)

5. More proactive education by support staff to prevent unfair resource use by Openspace regions.

When void sims (openspace is the term used by LL) were first invented in the era of US$195/month Class 4 sims, they were intended to be "light use", open water or natural land areas. Four of them were attached to a single computer CPU (when CPU's had only one "core" processor). You had to buy all four together, meaning that "your" 4 voids were all on the same CPU, and the fee was the same as a full sim, $195/month.

When this began, LL was clearly uncertain how this all would work, so they made a drastically conservative policy. Instead of the 4 sims sharing the 15,000 prims normally, allowing 3750 prims for each void, they allowed only HALF that number, or 1875 prims for each void.

Following months of experience with this situation... [void sims, purchase only 4 at a time, 1875 prims on each].... LL appears to have concluded that void sims were a successful experiment. They introduced new policies last spring allowing owners to buy ANY number of void sims, AND, most importantly, they increased the allowable number of prims on a void to the full 3750, or one quarter of a full sim's prims. These changes greatly increased the value of void sims.

Well... now it appears that they have changed their collective mind. Now their big concern is that voids are being misused... that people are not only using the increased number of prims, but they are also loading up those sims with resource-using scripts and attachments. Here's what I'm guessing they observe.

We all know that a sim comes with a limited number of prims: 15,000. Since there are 4 voids to a full sim, each void has one quarter of that, or 3750 prims available. LL has coded into the system that more than that number of prims cannot exist on a sim.

But... prims are only ONE of the many CPU resource users. LL has never coded in limits on any of the other resource users that its possible to use in any sim, voids included. Principal among these resources are scripts and attachments. There is no limit to the number of scripts or attached prims that can be run in a sim, and, since even a lightly loaded void sim can have hundreds of scripts running, and the avatars in it be wearing literally *thousands*!! of prims (many of the "hair pieces" that I wear have well over 200 prims each!), it becomes very easy to see how sim misuse could happen. A void sim might have only one quarter of a full sim's prims rezzed on it, but it easily might have a full sims work of scripts and attachments also supported on it.

And for the Lindens, this means complaints about how the sim performs. It becomes clearly burdened with much more load than it was intended to support.

Let's leave aside the question: "Why didn't LL see this problem last spring... having had voids in place for well over a year, when they increased the prim capacity to 3750??" Or leave aside the question: "Why did LL disconnect the requirement of purchase of 4 sims, so that while previously one owner owned all four sims sharing a single resource and only they were affected by their use policies, now 4 owners might own the 4 sims sharing one CPU, thus completely removing any ability to assign responsibility?"

Lets just look at the economics, and the impact of the announced changes on the announced problem.

Policy #2 makes complete sense. If we are having performance problems with voids on Class 4 servers, then require upgrades to Class 5 servers (with the concommitant price increases). We already have this option with full sims. If there's a serious problem with void sims, then requiring the upgrade makes sense.

Policy #3 seems to have no relation to the announced problem.

Policy #4 is not a system that we in the CDS would ever use. If this is happening, I can well understand why LL would wish to put an end to it. The EO pays the monthly tier bill... period.

Policy #5 seems very reasonable, although perhaps not expected to be very effective given the "independent" nature of SL residents.

But... Policy #1. Policy #1 does NOTHING to address the announced problem. What it does ONLY is to prevent voids from existing in the first place. Here are the economics of it.

The existence of voids (and, in addition, the feature called "prim multiplying") have driven home the fact that the tier we pay in SL is NOT based on how much land we have to use... its based on how many prims we get to use. As described above, these are "special" prims... the free-standing prims we use to build things. They are what we really pay for... while the prims we wear as attachments are free (as are the scripts we run in either kind of prim).

A full sim comes with the capacity for 15,000 prims. Since tier for that sim is US$295/month, each of those prims cost us 2 cents per month. This is regardless of the prim multiplier we use. And, nowadays, its a price that also applies to the "4 void sims equals one full sim". Voids have 3750 prims, also costing us 2 cents per month.

Before last spring, voids only allowed 1875 prims. This meant that voids prims cost 4 cents per month (since the actual tier price was the same). Voids were NOT good deals then, but people liked them cause they had the open space, and the price was still $75/month.

What's happening now under Policy #1 is simply that LL is raising the price... by a wopping 67%! This means that the prims will now be 3.333 cents per prim per month. So someone trying to keep their costs about the same will have to split the sim... use only portions of it, thus having fewer prims available again... AND only a portion of the land area.

Honestly, this destroys the economic viability of the void sim. In many areas (SLNE included) only one resident occupies each void sim. The luxury of a void sim is VERY expensive as it is now, and something that only the "better off" citizens of this world can afford. Raising the price by 67% makes it completely unaffordable. I have heard of policies by some void owners to divide their sim into quarters, or even eighths. This allows a VERY small number of prims for each resident, and completely invites the problems that LL bemoans. Yet, only by pursuing this policy does an owner even stand a chance of keeping a void sim going. A COMPLETE opposite result than the one that LL announces that it intends.

There are clearly fundamental economic business issues raised by this action, which I suspect that LL has not fully considered. I feel there is a strong liklihood that Policy #1 will be altered before it is imposed. therefore, I feel we should not immediately jump to any conclusions about our future... but rather keep our eyes and ears open to upcoming developments.

I'd be happy to be around if anyone wants to discuss this further.

Sudane................................................

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Arria Perreault
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Re: Linden Labs changes Openspace Pricing Policy

Post by Arria Perreault »

The Monastery stays in Alpine Meadow

Having read the message in LL blog, having been given some advice, I think that the situation is very clear. The calculations for the fees I have made were based on price prims. The proposal with the current LL prices was sustainable.

Calculation of land price and fees
Fees
50% of the prims on private/NGO plots 1875
Fee for void sim (in US$) 75
Price based on LL fee(75/1875) 0.04
Price for the sim (in US$) 0.05

2 models

Model 1
1 plot Virtus 375 prims 18,75 US$
6 plots normal 250 prims 12,5 US$
Total 93,75 US$

Model 2
1 plot Virtus 375 prims 18,75 US$
4 plots normal 375 prims 18,75 US$
Total 93,75 US$

It is evident that with an increase of 67% of the fees, the sim is not anymore sustainable. Regarding performance, the ideal goal of this project was to build on this sim, near the Monastery, a small community of artists and people interested by virtual exhibitions or library. The idea was that they work in the Monastery and not on their own plot. It was the original idea, but only few people have understand this.

Changing this proposal of void on a proposal for normal sim is not a theme for the Monastery, because in this case the Monastery would have the same conditions than in Alpine Meadow today.

I will enter a motion in the next RA proposing to withdraw the proposal as financially non-sustainable (if necessary). The RA can also decide to continue to work on the 5th sim as normal sim. It is clear that the Monastery has no interest in this project and will not be part of it. I personally don't have opinion in this moment about the opportunity of having a 5th normal sim now on the position AM2 of the GMP. I only think that the GMP must be reevaluated if LL maintain the announced policy.

The Monastery stops to work on this project of new sim and will continue its normal activities.

Last edited by Arria Perreault on Tue Oct 28, 2008 12:54 pm, edited 1 time in total.
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Re: Linden Labs changes Openspace Pricing Policy

Post by Sudane Erato »

Arria Perreault wrote:

I only think that the GMP must be reevaluated if LL maintain the announced policy.

Sadly, I think this is very true. If the announced policies remain in place, the economies of a void sim will be unsustainable.

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Re: Linden Labs... Openspace Pricing Policy

Post by Jamie Palisades »

Lots of opinions voiced so far. If you really want to focus on momentary outrage, here: http://www.flickr.com/groups/openspacev ... 448431980/
However: I wouldn't bother. This isn't over yet.

For one thing, it's not news that Linden Labs acts suddenly when managing the land market. It's sometimes seemed like they run the SL land market rather like subprime mortgage lenders ran the home loan market. A big price increase in an intangible luxury good during a recession? :)

For another, there's a *pattern* of LL making big policy changes without warning ... and then getting beat back by negative customer reactions into something more moderate.

There will be effects on CDS ... already have been some ... but it will take a little time to assess & work them out sensibly. In the last 24 hours, I've attended several in-world emergency meetings of estates & estate leaders. Nothing official, mostly just friends. Lots of concern ... not a lot of solutions yet. Many of them rely on voids *far* more than CDS does or ever would. We're all still working on ways to carry out our plans, CDS included. Give it a few days.

regards JP

Last edited by Jamie Palisades on Thu Oct 30, 2008 7:51 pm, edited 1 time in total.
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Re: Linden Labs ...which prices next?

Post by Jamie Palisades »

Timo, sorry to say, but I think one of the most important early lessons here is not about voids. It's a reminder that Linden Labs changes its princes suddenly and without warning .. and that the recession might accelerate this. So I don't think it'd be prudent to assume that their other prices will remain unchanged. regards JP

Last edited by Jamie Palisades on Thu Oct 30, 2008 7:59 pm, edited 1 time in total.
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Re: Linden Labs changes Openspace Pricing Policy

Post by Claude Desmoulins »

Another possibility is that LL is trying to price voids in such a way as to increase the likelihood that owners will "upgrade" to a full sim. As the premium paid for voids goes up (Thanks Sudane for the math) it makes it easier for a user to say, "I might as well go up to a full sim at $295 rather than two voids. I get twice the prims for $45/more a month." Voids then only make financial sensw for those who really want open space with few prims.

See also Gwyn's blog post about SL's econ make that Gwyn's magnum opus on the SL economy.

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Re: ... Openspace Pricing Policy

Post by Jamie Palisades »

No question, Claude :) They feared that they were undercutting their own higher-priced product. And island estates are vastly more important to their cash flow & growth stats than mainland now. Regards JP

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Re: Linden Labs ...which prices next?

Post by Timo Gufler »

Jamie Palisades wrote:

Timo, sorry to say, but I think one of the most important early lessons here is not about voids. It's a reminder that Linden Labs changes its princes suddenly and without warning .. and that the recession may be making them dumber, or greedier and itchier. So I don't think it'd be prudent to assume that their other prices will remain unchanged. regards JP

That's true, Jamie... I remember very well how EU VAT was announced about one year ago and you never know when they decide to change pricing of the full sims even if at this time they didn't. The way how they manage their business creates indeed an impression of a greedy and unstable company. Let's hope they are able to survive in the recession.

By the way, there seems to be a quite popular new ticket in SL Jira: http://jira.secondlife.com/browse/MISC-1776

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Re: Linden Labs changes Openspace Pricing Policy

Post by Desmond Shang »

I agree with Sudane.

Don't expect much this week - I am sure the backlash was expected, and the real conversation will start in the next week or two.

As it is, with the ridiculously conservative policies and reserves that both the CDS and Caledon have - we shall both survive just fine.

However, now is the time for the great communities of the grid to reach out and help their brothers, if they can.

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Re: Linden Labs changes Openspace Pricing Policy

Post by Sonja Strom »

Not surprising to many of us, Linden Lab has announced some changes to its new Open Space sim policies, including an upcoming introduction of a new kind of sim that is to be in-between an open lands sim and a full sim, called a Homestead sim.

Here is the page: http://blog.secondlife.com/2008/11/05/a ... -residents

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Re: Linden Labs changes Openspace Pricing Policy

Post by Sudane Erato »

This is just as much as disaster as the first policy was, and changes nothing. The future openspace sims have *no* way to create an economic base, and the homestead sims are just a re-naming of what we have now with the same higher price tag.

LL has really destroyed any sense that people might have of their sense of economocs, IMHO.

Sudane..............................................

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