Linden Lab revamps pricing for Openspaces, insults residents

Earlier this week, Linden Lab (in the person of Jack Linden) announced some "significant" - to phrase it politely - changes to the the pricing of Openspace regions in Second Life. For those, who don't know this product: Openspaces are regions (simulators or "sims") in Second Life which offer an area of some 65,000 sqm of virtual land. They come with a reduced performance compared to "standard" regions (only a quarter of the usual number of objects is allowed and the performance of scripted objects is lower, too). Correspondingly they have been sold at only 1/4 the cost of standard regions.

Prices raised by nearly 70%
Linden Lab now announced their intention to raise costs some 70% for this product. Not only the initial price but also the monthly running costs (so called tier). They announced their intention to implement those changes for ALL Openspace regions: for new ones and also for a few thousand regions sold in the last 4 months.  No wonder, many of their customers are crying "bait and switch". As I am of an older generation myself, I can only think of the infamous "Oil for the lamps of China" (also an cheesy novel by Pearl S. Buck).

Jack Linden was citing many different reasons for the price change. The most important one being, that residents were "abusing" those regions by actually building stuff there. He insists, that Linden Lab never intended this product to be used this way and points to an obscure page on the Second Life Wiki, where it is written that these regions are intended to be designed as open sea, forests etc.

Ladies and Gentleman ... this is just plain ridiculous.

There is no widespread "abuse" of Openspace regions. Most residents are using them in a fully responsible way and exactly as Linden Lab has promoted them: "light use" regions.There is a small minority of customers who are trying to implement clubs or malls on these regions - which is NOT always a good idea. But thats a small minority.

Adding insult to injury
If Linden Lab did not intend those regions to be used for building ... one might ask, why the company has doubled the "prim capacity" for these regions just a few months ago. You don't need 3750 prims if all you can do with such a region is to create a large area of open water. Linden Lab is not being honest. They are using Openspaces exactly like that (on the new Nautilus continent, for example.) And they are adding insult to injury, as their spin doctoring is so plump that no one can believe it for long.

In addition: raising prices will never fix the problems they are purportedly experiencing with these regions. The guys which are using Openspace land "intensively" will buy smaller areas and/or use their land MORE intensely now. That's how a market-driven economy works - which always seems to come as a big surprise to Linden Lab decision makers (Oh, we have this product here, which offers a better price performance ratio for a huge part of our target group than our alternative offerings. And now they really buy it in large quantities? How could that ever happen?)

When I read the announcement I was more than a little annoyed. Not because of the new pricing structure. Actually I think an Openspace region delivers more value than 1/4 of a full prim region and should command a higher price. What it tells about a monopolist service provider selling 1000s of them and THEN raising the running costs some 70% is another issue (and has been discussed elsewhere ... )

Incompetency at the Lab in the fields of IT and macroeconomics?
What I found downright hypocritical (please forgive me, Jack) was the fact, that Jack cited "abuse" as one of the main reasons for such an unprecedented price hike. If he had said "Oh, I am so sorry, we have f***ed up again. We did not take into consideration the amount of grid traffic caused by a large number of Openspaces compared to 1/4 of that number in full prim sims ..." that would have been honest. Calling this "abuse" is insulting and utterly unfair.

We at Otherland are renting out more than 100 Openspaces. We do that since 2006 when the first ones appeared on the market. It is the perfect material for our work. The number of problems or complaints about lag or generally low performance, we experienced on this type of region (and we still use some class 4 based ones) is actually LOWER. We get more complaints for our full prim regions. This is because nearly all of land is explicitely sold for RESIDENTIAL use and used like that. On the Openspaces you will rarely find more than 3 or 4 avatars at the same time. The total script time is around (or lower than) one millisecond on most of our Openspaces.

If this constitutes "abuse", I seem to have a totally different understanding of the Englisch language than Jack.

The simple fact is: it is a plain and obvious matter of overall systems architecture of the SL Grid, that 4 Openspace regions will always need more grid resources than 1 full prim sim under similar conditions. This is not surprising and should have been known to every qualified systems architect, when the product was first announced (and then changed to 3750 prims).

As I have said, a small minority of residents is overstressing the resources of this product. But that has been the case with full prims, too, as long as I can remember - especially on mainland. If this was the cause behind the new pricing, mainland prices should have been raised 3 years ago.

It is an insult to everyone in the IT profession with a little understanding of grid architecture, to say that this is a new problem or that this constitutes a surprising and unexpected "abusive" usage pattern.

Every responsible company interested in a partnership relation with their customers (and not in a monopolistic position) would attack this issue with constraining features in the software. Not by an unprecedented price hike.

I am worried, very worried. This move shows not only that Linden Lab does not care about relations to current business partners. The idea behind this move is probably that new customers will be much more important for the company in the long run, so it doesn't matter to much to alienate their current customers. This idea might even be true, unfortunately, but it shows a business ethic, which is more than a little questionable, IMHO. This move also shows an utter lack of understanding about how a market-driven economy works with some of the most important decision makers at Linden Lab. (The "unexpected" success of the Openspace product has been no surprise to anyone in the real estate market). This show of incompetency is scary, more than a little scary.

What can be done?
I do not expect Linden Lab to get through with their intentions. In the nearly 4 years I have spend in Second Life I have never seen such a huge protest of residents. This is no storm in a tea pot. This is a revolution. Alternate solutions to the issue at hand have been discussed on the forums and on many blogs. Linden Lab could implement more severe performance limits for Openspace regions, they could add a third kind of low performance product. They could adjust pricing to actual usage patterns etc. Contrary to the statements in LL's official communication this is no rocket science. The correspending changes to the server code could easily be implemented in the 2 or 3 months until the proposed changes go into effect.

The alternative?
If Linden Lab does not listen to the customers which are filling their coffins (estate land is MUCH larger these days than Linden Lab's own main land), they might have to realize that they are doing themselves a great disservice. All that will happen is, that they drive those customers away to alternate platforms or to alternate grids based on the OpenSim technology. This could be the beginning of the end of Second Lifs's dominant position in the open Metaverse.

I hope that this will not happen, as I still believe in the value of a large connected virtual world as the Second Life Grid delivers today. Let's just hope, that someone at Linden Lab will see the light in the next few weeks. I have not given up hope.

Comments

[Katsomi Kawashima]

Lets not get confused by the insults and the bullshit in the Linden announcement.

The heart of it is just an enormous price hike. This can have two alternative explanations;

1) LL wants higher profits

2) LL is desperate for more money because they themselves feel the economic crunch of the present times

At an analysis there is much that speaks for the latter alternative (especially the "no grandfathering" clause).

One can only regret that they chose to make the announcement in these insulting and erratic terms. It is not the first time the LL makes irrational decisions. It seems to be inheritable.

[Dana Bergson]

@Katsomi: I always try not to attribute to malice (or greed) what can be explained by simple incompetence. ...

I guess it is a mix. I am afraid (really afraid) that they did not foresee the great success of Openspaces and the demands this would cause on the Grid. This is utterly naive, of course ...

Additionally, they are afraid to make any changes to the systems (which might be able to limit those demands in a fair and acceptable way) but go for a simple price hike. Their idea is probably price hike would
(1) pay for the additional ressources
(2) reduce the amount of Openspaces on the Grid

This is a stupid strategy IMHO and I guess they have underestimated the reactions from the customers side. In the end, if the price changes really goes through - which I don't expect, currently - they would be in a situation with maybe the same or even less earnings (because many Openspace would simply be abandoned by angry owners) AND face an alienated customer base.

This "solution" they have come up with might look good on an excel sheet, but - again - it simply does not take into account peoples reactions in a real economy. They did not foresee peoples behavior when they improved the Openspaces this spring and they misjudged the situation again.

[Saffia Widdershins]

Dana, I'd be really interested to see how you and other land owners of your status are feeling about OpenSim technology now.

It seems to me that as soon as groups like yours feel that business can be done on alternative grids (and there are some pre-conditions I can see, which I'll be discussing soon on my own blog), there could well be a market of currently disgruntled OpenSpace rentiers who trust their landlords but not the Lab.

[Dana Bergson]

Hi Safia,

I have checked out OpenSim. We did some internal experiments on our own servers and I have accounts on 4 different alternate grids, currently.

Unfortunately I have to say that OpenSim is NOT ready for prime time. Most of our customers would not be happy with the experience on those grids currently, which are populated (sparsely) by die hard enthusiasts now.

I expect this technology to mature substantially in 2009, though, and you can expect an "Otherland Grid" in 2009 :) I am NOT sure if this will attract a lot of customers. There are too many technological questions still to be solved before such an offer will be as attractive (to the majority) as the Second Life Grid.

[Katsomi Kawashima]

@saffia

" - - who trust their landlords but not the Lab."

Hear that!

And its not only trust that is better in Otherland, the service is also very superior to LL. After having four places in Otherland I wouldnt dream of going back to the mainland again, ever.

Matter of fact I only go there when I absolutely have to for buying things and then I tp back to my lag free and continously working island thinking - thank God i dont have to live on the Linden mainland - - -

[Bud Parnall]

The professional way your company has conducted itself is in stark contrast to the dealings with Linden

Pure and simple I have come to believe that they just need money. How stupid could they be in the way they handled it? How unfair to estate managers?

I have enjoyed my sim to the fullest. Abuse was a insulting term to use. He retracted that on Wednesday. I bet the lawyers advised him.

Give me a tool and I will use it fully. That is all I have done on my sim. If I am harming others please tell me. I know I am using it to the design limit. If they do not want that I need to know.

If you have to raise the price I understand.

I am glad to see you post to this. I stand ready to assist. The Lindens are not responding.

This is their folly♠.

Bud

[G2 Proto]

I agree that there are some hard limits with OpenSim but these issues are addressed everyday by the developers and as stated 2009 will likely yield a production level build. That said many things can be done today within OpenSims limits.

[Barefoot Ballinger]

Dana, you have some loyal tenants... if you do open an "Otherland grid", I'll be there. Well, in whatever form I can afford .

Of course, my friends won't be visiting until they can TP in, skin attached... but that too shall come soon enough.

[Dana Bergson]

@Barefoot: that's exactly what I meant with "not ready for prime time"
@G2: I agree "many things can be DONE". Most customers would like to simply enjoy and be entertained ... the enthusiasts might already find OpenSim regions interesting. The majority will find them limited and clumsy in their current state. But I hope that this will change soon. It is hard to predict the pace of progress with software projects, though - especially with open-sourced ones :)

[BigCity Mapholisto]

My loyalty lies with OtherLand who has earned it through action, not false promises. I may have to cut back my investment - but will keep my eyes open to what OtherLand does in the future.

I honestly believe Linden has burned the last bridge. All of us - whatever we decide to hold on to - do so ONLY because we don't want to leave the virtual world simulator concept. If Linden had a viable competitor - or if OtherLand opened something tomorrow, my money would move faster than a blink of the eye.

It is now a waiting game. Reduce my holdings to a point I can afford, and jump ship the first chance I get.

I simply don't see anything Linden could do at this point to regain our trust short of leaving things the way they are - and I can't see that happening from a team that has shown no respect for their customer base.

Dana, keep looking. Your move to somewhere else will be followed immediately with mine.

BC

[Katsomi Kawashima]

Now M Linden has published his text on the open spaces.

There is no use argumenting about his claims that crashes are down and stability increased. Its strange that he says so since I cannot be the only one with several crashes a day and enormous lags when visiting LL-administered land the last few weeks.

Anyway I think the important thing now is the price increase and the eventual restrictions on open spaces.

I hope Dana is able to explain to us soon what his pronouncements really mean in terms of price and restrictions.

We look to you Dana. What will happen?

[Dana Bergson]

Please check the Otherlanders (inworld group) blog
http://otherland.blogs.com/otherlanders/2008/11/letter-to-otherlanders-november-5th-2008-m-linden-on-openspaces.html

Its hard to say more now and I am not sure, if I will have firm dates about limits and restrictions. M was ... kinda vague about that :=)

[BigCity]

Well, it's been a while, and I, like many of you, have been pestering Dana :) for answers she doesn't have yet.

I've decided to turn in my 3 open sims for a full sim - and then wait until Linden decides they now have to raise prices on full sims because too many people converted lol...

Many of you probably have seen the math, but here's what I've concluded...

With 16 open space sims on a quad server, Linden was making $1200 a month at the $75 price. The new price ups their income to $2000 per server.

I recently read an article that claimed that there were 22,000 open sims in existence. That would mean there are 1375 servers supporting those sims, and the price increase will net an additional $1.1 million if everyone stays.

If they lose 33% (which is simply a projection I read in an article I don't remember) that would leave 907 server at the new price, netting them (in effect)$1.8 million total as compared to $1.65 million at the old prices - AND - they have almost 500 servers empty for future expansion. If they are smart, and there is ANY truth to the performance claim, they will put homesteads on servers in groups of 8 to make sure they don't become the next excuse for raisning prices.

One side item I simply have to mention - and the one that bothers me the most...

Raising prices is bad enough - but REDUCING peroformance of the product they designed? Where have you EVER seen such a business practice. Have you ever seen a computer model price go up while the features were reduced? Ridiculous.

Ok, one more... I honestly believe that the Lindens don't understand the creative blood that keeps their business alive. There are hundreds, if not thousands, of people here who are part of SL becasue it gives them the abilities to show their creativity. Force them to leave, and all SL becomes is another Kaneva where creativity is defined as what the internal people can build for you.

Don't let Linden fool you. This has got little to do with performance and everything to do with rearranging the business to their advantage in the future. A side benefit is it drives people back the mainland, something they need to do desperately (considering the mess they made of it). All short sighted goals - all doomed to ultimately fail.

Dana mentioned options like OpenSim will likely be ready over the next year or so. Competition will relegate Linden into a role similar to IBM - the old-rich-too-big-to-get-rid-of giant that is always there but few people like or trust.

The Lindens will probably laugh all the way to the bank, but most of us will be elsewhere choosing not to pay for their abuses.

BC

[cleric dazy]

nice to read that..
but i think the spin works.. a friend was kicked from his homestead cause an estate owner said he use more that 1.2ms (checked with the estate top script owner tool) for his 1/2 sim.
asked where he found those crazy numbers, he send him to a blog speaking about the os as if the right use of homestead is only ultra_ultra_light..
it was obvious that the blog poster never owned a full os sim and checked how powerfull they are in fact..

the trouble with overload is since 1.20 viewer the cache don t work properly so the transfer of textures is a way more often as in 1.19
many people now need to upgrade the download limits with their providers since 1.20
LL say , can t reproduce the problem, even if all experienced cache trouble since 1.20..

overload due to a 2nd bug with scripts.. ms varriing from 1 to 10 time the original speed while making the same simple routine..

booth make huge server side needs increase..

but LL prefer to play another game instead..

[Sarah]

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Sarah

http://www.craigslistposter.info

[Sarah]

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Sarah

http://www.craigslistposter.info