NWN Kurzweil Article

Ray Kurzweil’s Singularity and Second Life

Kurzweil is right, but for all the wrong reasons. It’s not about engineering; it’s about economics. Human beings, as a social-technological species, seek to transact with each other to satisfy a variety of interconnected goals (social, psychological, sexual, commercial, technological political and economic). The more realistic virtual worlds become in portraying the complexity of human deportment – the more sophisticated the transactions – the more trustworthy and non-intrusive the transactional framework (property-rights structure) – then the more popular virtual worlds will become and the more economic activity will shift to them.

It is no surprise, therefore, that the primary demographic for virtual worlds is 25+. These are the people who have jobs, houses, cars – who are fully engaged in the complexities of economic life. 24- are the people living at home or in university dorms, playing games, dating, studying, clubbing, having fun. They are not yet independent economic agents.

Virtual worlds are currently built and managed by engineers. That’s the problem. It is akin to the days when computers were solely the province of engineers who saw the universe and all its complexity in terms of hardware and software. Therefore, give it ten years for virtual worlds to mature beyond the platform. These are the Model-T days of the industry. The future is the leather interior and sound system of a Ferrari.

Posted in Strategy and Policy | Leave a comment

Hello New SL General Discussion Forum

As the Virginia Slims ad used to say, “You’ve come a long way, baby!” A year ago, Linden Lab’s Jive-based fora were beginning their swan-dive into chaos. By Christmas, most of the seasoned contributors had abandoned ship and were paddling frantically toward SL Universe or, as in my case, their own blogs. There followed two months of cold, dark winter as the survivors watched the hull of SS Lindonia being slowly crushed by the ice.

Then springtime. In March, Linden Lab swept away the flotsam of the Jive fora and rebuilt on Lithium. The result was slick, professional and functional. Beginning cautiously and conservatively, Linden Lab engaged the residents and solicited improvements. Slowly, slowly, the fora evolved into a highly effective communication system.

Then summer and the reintroduction of the General Discussion Forum (replacing the Off-Topic bin, which had functioned as a proxy for general discussion). Having built a robust framework, LL could now afford to recreate a cafe in the main square of the fora for residents to meet, play chess, relax and chat about the world at large. It took a year, but it was a job well done.

Posted in Strategy and Policy | Leave a comment

A Proposed Improvement for Land Rentals

Building on an earlier discussion, I believe there would be immense benefit to everyone to add land rental functionality to the server side of Second Life. As a first step, I propose that land for rent be displayed in fuchsia (magenta) on the main map, similar to the way in which land for sale is displayed in yellow.

https://jira.secondlife.com/browse/VWR-15679

Later, the entire rental process could be integrated with parcel settings (About Land) as part of an upgrade of parcel and group permissions. Doing so would create an open and accessible rental market across Second Life – beneficial to landlords and tenants – that would enhance the overall economy. It would also eliminate much confusion regarding land rentals on private estates.

Posted in Land and Tier

Linden Lab Sexual Policy 2006-2011

One new thing I discovered in this roundtable is that everyone already knows Second Life is where it’s at for sexual play in an online environment…. Second Life was continually credited with holding the cutting edge on adult content. One of the recurring themes in producing adult content in games is appropriate diversity, storytelling, and finding what turns people on. I believe that Second Life already has the diversity, and I invite residents to think of clever new ways to develop roles for people to play in the context in Second Life to provide a story and something hot.

Depictions of child pornography in Second Life of which we have been informed have been exceedingly rare.

Keeping second life safe together 2007-06-01

Clarification of policy disallowing ageplay 2007-11-14

In March 2009, Linden Lab announced a highly controversial policy regarding personal behavior in Second Life. It consisted of:

  1. Creating a new and confusing maturity rating ‘Adult’ (roughly equivalent to NC-17) on top of the existing maturity ratings of PG (no sexual behavior or content) and Mature (any sexual behavior and/or content).
  2. Creating a new continent (Zindra) with an ‘Adult’ rating and forcing anyone deemed to portray ‘Adult’ behavior and/or content to move to Zindra.
  3. Creating search and filtering criteria based on an arbitrary definition of ‘Adult’.

Ever since Second Life was created in 2002, access to the Main Grid was restricted to 18+ (legal age and the highest film rating in most countries). In other words, the new ‘Adult’ rating was meaningless compared to the higher restriction of accessing the Main Grid at all. So, what were the grounds on which this major policy change were based?

Based on our research, we estimate that around 2-4% of content on the mainland would be considered Adult according to our current thinking on defining that. For all of Second Life, our content research shows it is around 5%.

Follow up adult content changes 2009-03-25

Upcoming changes to adult content: answers to questions 2009-03-31

Update upcoming changes for adult content 2009-04-22

Adult content changes in summary 2009-06-01

With the benefit of hindsight, it seems the true reason for the policy change – representing a complete reversal of the attitudes of March 2006 – was a covert strategy to bring children onto the Main Grid. In June 2006, Linden Lab enabled legally underage players to access the Main Grid via free, anonymous accounts. Since then, Linden Lab has eliminated all controls and restrictions on these anonymous accounts, yet when questioned, Linden Lab always denied planning to bring teens onto the Main Grid. Here is the now-famous exchange between Tali Rosca and Blondin Linden reported on 18 March 2009 in the SL Forum (abridged below):

[16:07] Tali Rosca: Ok, a topic which comes up every so often during the discussions: Opening SL to all ages? Some Linden say there are no such plans, yet Philip is on record saying he wants it. How does that jive?

[16:08] Blondin Linden: ….It’s staying where it is

[16:09] Tali Rosca: No. But are there plans to allow teens on the main grid? (Irrespective of keeping the teen grid alive as-is, as a protected sandbox)

[16:10] Blondin Linden: NO

[16:10] Blondin Linden: LET ME SAY THAT 2X – NO

The future of teens and second life 2010-08-20

Welcoming teen grid organizations to the main grid 2010-09-28

Bringing teens to second life main grid 2010-11-18

Teens welcome to second life 2011-01-21

Posted in Strategy and Policy | 1 Comment

A Lesson About Land Ownership

All land in Second Life is divided into ‘sims’ (also called regions). A sim is a square section of land 256 meters by 256 meters in size (65536m2 in area)(m2=square meters). Every sim has a name. At the moment, there are approximately 30,000 sims in Second Life.

There are two types of market:

  • primary (wholesale, Linden Lab creates new sims and sells them to residents)
  • secondary (retail, existing sims/parcels are transferred between residents)

There are two types of land:

  • Mainland (mainland sims, also called mainland regions)
  • Estate (private regions, also called islands or island sims)

There are two types of land ownership:

  • freehold (outright ownership, right of use, right to create leaseholds)
  • leasehold (long-term, transferable right of use, conditional right to alter leaseholds)

Linden Lab owns the freehold for all mainland sims. Private individuals own the freehold for estate sims. Most of what is bought and sold in Second Life is leasehold.

Mainland:

When Linden Lab creates a new mainland sim, it sells a single leasehold for the whole sim at auction (primary market). The person who buys the sim (who buys the leasehold) may then subdivide the sim and sell leaseholds for individual parcels (inworld, on the secondary market). When one buys a mainland parcel, one is buying the leasehold for that parcel.

Since Linden Lab retains the freehold for the sim, a leaseholder can be confident that 1) Linden Lab will not arbitrarily cancel a leasehold and 2) with few exceptions, leaseholds can be altered (subdivide/join) and 3) all sales are final and absolute. The drawback is that one must have a Premium account to buy a sim at auction or own a mainland parcel.

Estate:

When Linden Lab creates an estate sim (private region), it sells the freehold for the sim to the individual who placed the order. The freehold cannot be subdivided. An estate owner can sell the sim (the freehold for the whole sim) to another individual or he can return the freehold to Linden Lab, at which point Linden Lab removes the sim from the grid. An estate owner may subdivide the sim and sell leaseholds for individual parcels. When one buys an estate parcel, one is buying the leasehold for that parcel.

Since a resident (not Linden Lab) owns the freehold for the sim, one must remember that 1) the estate owner (the resident who owns the freehold) may arbitrarily cancel a leasehold and 2) sales or alterations of leaseholds may be subject to terms and conditions specified by the estate owner.

Needless to say, the owners of large estate continents have spent years building good reputations. In a competitive market, their survival depends on honesty, integrity and sterling customer service. Yet, should some extraordinary event occur (the RL death or bankruptcy of an estate owner), it is possible for an entire continent to evaporate. To the best of my knowledge, this has never happened. What has happened is for a small-scale estate owner to arbitrarily cancel a leasehold, sell the sim without warning, abandon a sim or simply wipe it clean and keep it for himself. There have also been instances of deliberate fraud whereby estate parcels have been sold on the pretext of selling the freehold for the parcel.

Freehold, leasehold, lease and rental:

  • freehold (outright ownership, right of use, right to create leaseholds)
  • leasehold (long-term, transferable right of use, conditional right to alter leaseholds)
  • lease (short-term, non-transferable right of use of estate land)
  • rent (short-term, non-transferable right of use of mainland)

Because of problems and confusion with the leasehold system for estate sims, many estate owners have changed the way they ‘sell’ estate parcels. Instead of charging a high, upfront price for a leasehold, they charge a small fee to arrange a non-transferable lease (rental). Often, the price to ‘buy’ an estate parcel is equal to one month’s ‘rent’.

Mainland rentals are arranged differently from estate leases. Remember that unlike estate sims, the freehold to mainland sims is owned by Linden Lab. If a mainland parcel owner sells the leasehold, he no longer owns the land. That is why mainland is rented via the parcel owner’s group. The parcel owner grants the tenant powers (permissions) over the parcel without relinquishing ownership of the land.

There are four types of mainland in Second Life:

  • 40/40 terraform
  • double-prim
  • normal (4/4 terraform)
  • Linden Homes (512m2 with house, no terraform, no transfer, restricted use)

The term ’40/40′ derives from the ability to raise or lower land 40 meters from its ‘baked’ (default) topography. There are 50 such mainland sims in SL.

Double-prim land is Linden-themed mainland. When Linden Lab created these sims, it kept 50% of the land and sold the other 50% at auction as parcels. Because Linden Lab kept half the land (landscaped with a limited number of prims), Linden Lab could give the sim double prims (Region Object Bonus Factor: 2.00). Such sims can be found in Nova Albion (Miramare, Grignano, Barcola, Sistiana), Bay City, Nautilus and Zindra.

The vast majority of the mainland is normal land, which can be terraformed +4/-4 meters from its baked topography.

Linden Homes are provided by Linden Lab. They are a 512m2 parcel with a house that cannot be bought or sold on the open market. In fact, one is merely renting the land and house from Linden Lab. Significant restrictions apply to the use of the property.

There are three types of estate (private regions):

  • Full Regions (15,000 prims, supports 100 avatars)
  • Homesteads (3,750 prims, supports 20 avatars)
  • Openspace (750 prims, 10 avatars)

See also: A History of Private Island Pricing

Posted in Land and Tier | Leave a comment

A Proposed Land Tier Fee Schedule

For eight months, the Second Life economy has been stagnant. After a series of failed initiatives, Linden Lab fired its CEO, closed its international offices and shed 30% of its staff. Needless to say, such a dramatic reduction in expenses is not unsound considering a lack of matching increases in revenues.

Since Linden Lab’s primary product is virtual land, one can measure the health of Linden Lab’s revenue stream by the amount of land in existence through time. Quantity of land can also be a surrogate for the health of the Second Life economy.

As with any product, there exists a Supply Curve (quantity supplied at a given price) and a Demand Curve (quantity demanded at a given price). In the case of virtual land, the point at which the Supply Curve meets the Demand Curve is the amount of land in service.

There are two types of land in Second Life: mainland and private estates. It is private estates that tell the story of the economy because 1) they are more expensive than mainland sims and 2) they cease to exist if abandoned by their owner. It costs an estate owner US$300 per month to keep a full-prim private estate ‘alive’. While an estate owner can sell his estate to another resident, the pool of estates requires a matching pool of people each willing to pay US$300 per month. If the pool of willing owners falls, the pool of estates falls accordingly.

Here is the data (unfortunately, less expensive Homestead estates are not distinguished from full-prim estates). What is clear, though, is a lack of growth in private estates since the beginning of March 2010. It is unknown whether people have been trading full-prim estates for Homesteads. If so, the stable quantity of private estates masks a declining revenue stream for Linden Lab. According to T Linden, “Regarding your question, we don’t see a lot of folks trading down to homesteads in our attrition numbers.” 2010q1 economic results 2010-04-28

It strikes me, therefore, that one of the main reasons why Second Life is not growing is the increasing relative cost of land tier. General hosting prices have more than halved in the past three years and, while Second Life is more than a simple hosting service, the cost/performance ratio of Second Life servers has certainly fallen. Meanwhile, other virtual worlds such as Blue Mars charge significantly less for virtual land. Opensim worlds, for all their faults, are essentially free. WordPress is free. Facebook is free. It’s not 2006 anymore. Moreover, there has not been a history of major improvements in Second Life over the past four years to justify maintaining high tier fees. In other words, tier fees are out of line with market conditions.

I therefore propose the following land tier fee schedule:

  • Full Region: $200 per month (setup fee $1000)
  • Homestead: $100 per month (setup fee $200)
  • Openspace: $50 per month (setup fee $100)
  • Mainland full sim: $100 ($50 each additional 1/2 sim)
  • Mainland 1/2 sim: $75
  • Mainland 1/4 sim: $50
  • Mainland  8192m2: $30
  • Mainland  4096m2: $20
  • Mainland 2048m2: $15
  • Mainland 1024m2: $10
  • Mainland 512m2: $5
  • Mainland 512 Premium bonus: free

I strongly believe the resulting long-term benefits of economic growth would more than offset the short-term decline in revenues. Second Life is expensive. Second Life is stagnant. It’s time to reduce prices to encourage greater participation.

See also: A History of Private Island Pricing

Posted in Land and Tier | 3 Comments

A History of Private Island Pricing

In September 2006, initial setup fee for an Estate sim (also called a Full Region or Island sim, 15000 prims) was US$1250; monthly tier fee was US$195. Initial setup fee for a pack of four Openspace sims (1875 prims each) was US$1250; monthly tier fee was US$195. Openspace sims could only be purchased by the owner of an Estate sim.

  • Estate sim (15000 prims): setup fee US$1250, monthly tier US$195
  • Openspace sims (4 x 1875 prims): setup fee US$1250, monthly tier US$195

Information about openspaces (void regions) 2006-09-21

In November 2006, initial setup fee for an Estate rose from US$1250 to US$1675; monthly tier fee rose from US$195 to US$295. The same price increase applied to a pack of four Openspace sims.

  • Estate (15000 prims): setup fee US$1675, monthly tier US$295
  • Openspace sims (4 x 1875 prims): setup fee US$1675, monthly tier US$295

Price for new private islands to increase 2006-10-30

Private island pricing increase delayed 2006-11-02

Updated information about private regions 2006-11-04

Private island pricing commitments 2006-11-15

In September 2007, Linden Lab adopted a policy of discriminatory pricing, resulting a significant price increase for European residents (COGS in the Vat Machine).

UK resident prices:

  • Estate (15000 prims): setup fee US$1968, monthly tier US$347
  • Openspace sims (4 x 1875 prims): setup fee US$1968, monthly tier US$347

In March 2008, Openspace sims (increased to 3750 prims) could be purchased singly (instead of packs of four). While Openspace sims could only be purchased by an Estate owner, they no longer had to be physically connected to the Estate.

US resident prices:

  • Openspace (3750 prims): setup fee US$415, monthly tier US$75

UK resident prices:

  • Openspace (3750 prims): setup fee US$488, monthly tier US$88

Note: there was a serious error in the pricing of this new Openspace sim. Firstly, by decoupling Openspace sims from existing Estate sims and increasing the prim count to 3750, Linden Lab created a new product. Whereas Openspace sims had been decorative additions to existing Estates, they now became low-cost substitutes for Estates (at 1/4 prims, 1/4 setup fee and 1/4 monthly tier fee). Yet an Openspace sim remained the same physical size as an Estate sim (65536m2), which created a price advantage to owning an Openspace sim over an Estate sim. In other words, the size bonus of the Openspace sim was not factored into the price. Needless to say, Estate owners made a perfectly rational decision to acquire Openspace sims instead of more Estate sims.

Announcing changes to the openspace product 2008-03-08

In April 2008, initial setup fee (for non-Europeans) for an Estate sim fell from US$1675 to US$1000; monthly tier fee remained at US$295. The initial setup fee (for non-Europeans) for an Openspace sim (3750 prims) fell from US$415 to US$250; monthly tier fee remained US$75.

US resident prices:

  • Estate (15000 prims): setup fee US$1000, monthly tier US$295
  • Openspace (3750 prims): setup fee US$250, monthly tier US$75

UK resident prices:

  • Estate (15000 prims): setup fee US$1175, monthly tier US$347
  • Openspace (3750 prims): setup fee US$294, monthly tier US$88

Quarterly land supply and island pricing update 2008-04-08

Details on the Q2 2008 island price change 2008-04-10

In October 2008, initial setup fee (for non-Europeans) for an Openspace sim (3750 prims) rose from US$250 to US$375. Monthly tier fee rose from US$75 to US$125.

US resident prices:

  • Openspace (3750 prims): setup fee US$375, monthly tier US$125

UK resident prices:

  • Openspace (3750 prims): setup fee US$441, monthly tier US$147

Openspace pricing and policy changes 2008-10-28

Update regarding the openspaces announcement 2008-10-30

In November 2008, a new price and product structure was announced. Openspace sims (3750 prims) were renamed Homesteads and a new type of Openspace sim (750 prims) was created. (Linden Lab is notorious for poor terminology.)

US resident prices:

  • Estate (15000 prims): setup fee US$1000, monthly tier US$295
  • Homestead (3750 prims): setup fee US$375, monthly tier US$95
  • Openspace (750 prims): setup fee US$250, monthly tier US$75

UK resident prices:

  • Estate (15000 prims): setup fee US$1175, monthly tier US$347
  • Homestead (3750 prims): setup fee US$441, monthly tier US$112
  • Openspace (750 prims): setup fee US$294, monthly tier US$88

A letter to second life residents 2008-11-06

Openspaces transition for january 2009 2008-12-19

About the homestead launch and script limits 2009-01-04

Homestead pricing to be grandfathered 2009-05-26

Island monthly fee pricing for 2010 2010-02-05

In January 2011, the monthly tier fee for a Homestead rose to US$125. At the same time, all prices for UK residents increased by 2%.

US resident prices:

  • Estate (15000 prims): setup fee US$1000, monthly tier US$295
  • Homestead (3750 prims): setup fee US$375, monthly tier US$125
  • Openspace (750 prims): setup fee US$250, monthly tier US$75

UK resident prices:

  • Estate (15000 prims): setup fee US$1200, monthly tier US$354
  • Homestead (3750 prims): setup fee US$450, monthly tier US$150
  • Openspace (750 prims): setup fee US$300, monthly tier US$90

Two important updates on 2011 land pricing 2010-10-04

In November 2015, the setup fees for Estate, Homestead and Openspace sims decreased by 40%.

US resident prices:

  • Estate (15000 prims): setup fee US$600, monthly tier US$295
  • Homestead (3750 prims): setup fee US$225, monthly tier US$125
  • Openspace (750 prims): setup fee US$150, monthly tier US$75

UK resident prices:

  • Estate (15000 prims): setup fee US$720, monthly tier US$354
  • Homestead (3750 prims): setup fee US$270, monthly tier US$150
  • Openspace (750 prims): setup fee US$180, monthly tier US$90

Decreased land set-up fees and changes to transferring regions

In April 2016, LL offered Estate and Homestead owners a bizarre ‘buy-down’ scheme whereby they could purchase a reduced monthly rate of US$195 (Estate) and US$95 (Homestead) for a one-time fee of US$600 and US$180 respectively.

Want Lower Tier? Now You Can Get Grandfathered Land Rates!

Posted in Land and Tier | Leave a comment