Wednesday, January 16, 2013

Should Linden Lab Coerce Merchants Into Second Life Land Ownership?

Empty Spaces

Shockwave Yareach proposed a provocative solution to the shrinking Second Life grid last week. His idea is that merchants should be be required to own land for the privilege of offering goods for sale on the Marketplace:
Linden Lab's making land irrelevant for shoppers means businesses aren't keeping stores in-world anymore. Thus the funds to keep the sims up is going away, and the sims are going away too . . . The solution is to put limits on the Marketplace. The number of square meters you own divided by 100 and added to 10 is the number of items you can have on the Marketplace.
Ironically, Linden Lab's successful promotion of the Marketplace has had the unintended consequence of depressing land ownership. Nevertheless, I think Shockwave's idea would do little to revitalize Second Life's declining grid.

The reason merchants elect to bail out from stores in in Second Life is that they don't generate enough sales to cover their costs. That's sometimes due to poor products or bad decisions about location or marketing. But the recent mass migration seems to be caused by a significant number of residents choosing to shop on the web instead of on the grid. Unfortunately, requiring merchants to pay for land they can't monetize would simply drive away content creators and reduce the number of virtual goods available to Second Life users.

Adding new regions offers no inherent benefit for Second Life users. The majority of current regions are usually unpopulated. Take a look at the map at any time of the day and there are only scattered concentrations of green dots. What Second Life needs is more users and more attractions, not more land.

The challenge Linden Lab faces is declining revenue. I think the problem is that they've reached the limit of their tier-based business model. Second Life is mostly funded today by handful of very large land holders. The growth market for Second Life are the millions of potential casual users whose primary interest would virtual goods and entertainment, not land.

My advice to Linden Lab would be to transition to a business model that is focused more on monetizing the sale of virtual goods, rather than the sale of virtual land. I'll explore that idea in a future post.

8 comments:

Mr. Crap Mariner said...

I'll look forward to how you explain selling virtual goods to people who have nowhere to rez or use them.

-ls/cm

Sling Trebuchet said...

LL are going in the directly opposite direction.

Merchants at the very least had to rent part of 16m for the Magic Box.

With direct Delivery, even that is gone.
.

Mariner
- people will use sandboxes more to rez boxes
- or "wearing a box" will cease to be a noob thing.

;)

Botgirl Questi said...

Crap: Ha. The goal would be to establish a business model that would allow for a significant reduction in the cost of land, with the reduction of revenues made up for by a greater take on $L transactions. Net result would be more land.

Botgirl Questi said...

Sling: I think that's the right direction. IMVU has a slick approach that allows you to try items before you buy them. It's like a virtual dressing room built right into their application.

Gaga Gracious said...

I have never been stopped from rezzing a box on my hand and open it to inventory but anyway, I can't see Merchants being happy paying for land and commission to Linden Labs on MP sales. The land barons might be happy if LL accepts renting make one eligible to put stuff on CP and, of course, LL will be happy to get more revenue in. But I see so many problems with that approach. It would probably be to complicated to be workable.

Anyway, I am of the mind that lowering the tier would work and changing the benefits to premium accounts would also help bring in money to LL. The homes and silly gifts are not needed. Double the stipend on premium accounts and allow unlimited inventory while at the same time place severe limits on inventory for free accounts. I like the idea of try before you buy too!

Mr. Crap Mariner said...

"allow unlimited inventory while at the same time place severe limits on inventory for free accounts"

BREAKING NEWS: Number of accounts goes through roof... Linden Lab claims success, while the truth is that people just spawn dozens of "container" alts.

SL users will game any limit. The Amazon Free Offer proved it.

Jen Tafler said...

I think bottom line is why don't people want to own land (which is the main point). One, in the 5 years I've been on, the number of sandbox places has increased exponentially. So, why own land when you don't have to. Two, if you're sole purpose it to just have fun, go to clubs and entertain sl sex, then you don't need land for this either. Increasing a Linden sales tax on merchants won't help. This will just drive the price of everything we buy and the creators will loose out too. Putting stipends on users will only drive people away as well. I think the only avenue as mentioned above is to decrease the land price so the land barons of sl decrease the tiers. The more land sold after this should make up for a loss in revenue that Linden is currently experiencing. And maybe, just maybe, this could in turn have more staff so that the wants and needs of the users can be addressed. ; )

Khannea Suntzu said...

There is only one solution - LL land must be gamified. The mechanism for gamification can be many things, but there must be inherent, emergent incentive for users to do things even the most empty of sims.

I tend to have fairly intense ideas on this, but my first suggestion is improve on a model vaguely similar as her minecraft, and innundate the landmasses of SL with animals, surface structures, harvestable stuff. This should NOT be as simple (vulgar) as some contrived for of planting money trees, but rather something that ties in to genre -

a beautiful animated ecology, consistent geology, substantially more compelling landcrafting (let's begin with something at least as good as the Crysis landcrafting tool) and yes, that should include cavern systems.

This should all be tweakable, so each land owner than then activate a series of options consistent with the theme. AI Animal life should be a basic. The next step should be a vibrant ecology of programmable NPC toons. If mob boxing can be done in wow it can be done in SL.

If this isn't done, in a few years 10% of SL will be left, and it will all be a mix of high detail fuck clubs, strip joints, prestige malls and roleplay zones. Oh yah and the odd church.

LL can not make land cheaper, as that would be a self-defeating prospect. The only strategy that makes any sense is to make the core SL experience more seductive, and the concurrency /time use per user go up.

My first choice - make the land of SL completely programmable, yet with a high degree of randomness. The best model for such game play remains mindcraft, but without box pixels. More like the game "Dust".

Make it so.