Monday, October 30, 2006

Supply and Demand - The Land Store is Closed -

On the heels of my virtual exuberance, Linden Labs announces a non trivial price increase for private estates. The land store is now closed until 1PM SL November 1st when the great land rush will recommence for the remaining 150 sims at the old bargain rate. After that, set up costs will increase from $1250 US to a whopping $1675 US and monthly maintenance increases from $195/month US to $295/month US.

The blog post responses are currently at 118 and will be climbing, assuming the community can express it's disdain in a meaningful (and therefore non moderated) way. It should be no surprise that the responses from residents are largely unfavorable, but some are creative including Koz Farina's post of the lyrics of The The's "The Beat(en) Generation". What may be arguably more disturbing than the general unrest is the suspicion that this increase was pre-released to a few select Second Lifers. [I actually read a post about this by Prokofy Neva over the weekend, and am kicking myself for not being able to find it now.] The crux of the issue is whether the land store was closed prior to the rumored "pre announcement" or if there was in fact some unfair advantage. I suspect it was the former.

I have read some speculations that this act will be the *tipping point* for Second Life. Other than a misuse of the concept, the environment is changing so radically it does not lend itself to meaningful analysis even of the tipping point persuasion, but molds rather well to hype and emotionalism. After all, this could *just* be a bad business decision - one we'll read about in HBR next year. On the other hand, it could be the simple result of basic economics - remember that pesky supply and demand curve?

UPDATE: Adam Pasick, I mean Adam Reuters, posted a story announcing that the private estate price increases were, in fact and sadly, leaked to select designers and long time residents. Quoting from the article:

We probably made a mistake there, trying to get feedback. We should just tell everybody everything,” Rosedale (right) told Reuters on Monday in a telephone interview that also included newly appointed Chief Financial Officer John Zdanowski.

And farther along...

Rosedale said the Second Life land store was closed on Friday after word of the impending increases leaked, shortly before any developers or other businesses were notified by the company. However, official confirmation of the increases was not given until Sunday evening, which would have presented a small window to buy sims from other residents.

The post I could not locate is here.
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