SL Go: of pricing and models and some thoughts from OnLive

Important note: The SL Go service is to be shut down on April 30th, 2015. For more information, please read this report.

Update: On April 3rd, 2014, OnLive announced a revised pricing structure for SL Go.

While only launched on Wednesday March 5th, OnLive’s new SL Go offering for accessing Second Life from Android devices, low-end computers and TVs (additional hardware required) has already received a lot of kick-back due to its initial pricing model.

As it stands, OnLive, in something of a departure from their normal pricing models, are initially presenting the service on a pay-as-you-go offering starting at $3.00 for an hour in SL (with an initial 20-minute free trial period for new sign-ups), through $8.00 for up to three hours access, to $25.00 for up to ten hours. This is being seen as prohibitively expensive for using Second Life.

But is that really the case? Ultimately, the answer to this is both yes and no.

On the one hand, SL Go is being presented as an adjunct – not a replacement – to people’s “normal” means of accessing Second Life; something to be used to get in-world when access via home computer and local viewer isn’t an option. This was very much underlined by Nate Barsetti,  the Senior Manager of Customer Relations at OnLive, and Don Laabs, Linden Lab’s Senior Director of Product with overall responsibility for Second Life, emphasised when both appeared on a Designing Worlds special presentation shown a few hours after the launch of the service.

In such instances, a pay-as-you-go option is actually valid, as it potentially offers a better means of managing costs than something like a subscription payment system, such as OnLive’s new $14.99-a-month CloudLift subscription service, which was also launched on March 5th alongside their new OnLive Go service (of which SL Go is actually a part)..

For example, someone who find they need to access SL for, say, 4 hours a month when they are away from their home PC and viewer would have to pay a maximum of $31.00 a quarter in order to do so. But if SL Go were pitched at the same price as CloudLift, then their cost for the same 3-month period would be $44.97.

Of course, how far the pay-as-you-go payment plan remains attractive is on something of a sliding scale, and a tipping-point can easily be reached. There’s also the fact that were SL to be “rolled into” something like CloudLift, then it becomes more attractive on a subscription service as users gain access to it and other titles provided by CloudLift should they wish to make use of them. But that doesn’t negate the fact that there are genuine use-cases where pay-as-you go is potentially far more cost-effective, and therefore attractive, than a flat subscription rate.

On the other hand, however, SL Go has been presented as a means of accessing the full richness of SL on computers otherwise incapable of doing so. This suggests that SL Go could be used as a more general means of using SL than those on such low-end machines can currently enjoy – and as such, it is where the pay-as-you-go option falls flat on its face, and an alternative means of paying for the service to be used in this way is required, such as a subscription model. And OnLive aren’t actually blind to this fact.

One thing to remember in any discussion of payment models is that SL Go is only currently a beta offering at present, and as such, it is very much a case of testing the water: things may yet change.

This is something Nate Barsetti, commented on during a Q-and-A session also hosted by the Designing Worlds team shortly after the SL Go beta had been launched:

This is the only product line that we’re doing the pay-by-minute. We’ve been running the games service for about four years, and that’s not including our closed beta, the variety of closed betas, that we ran … We had a tremendous amount of data on usage, on propensity for people to play on a particular account, a lot of guiding  metrics on the commercial side of things. And it was that data on which we were able to build a subscription model for our other product lines that allowed us to stay in the black with our network overhead and the cost of doing business in general.

This is the first foray into Second Life, and there’s definitely so uncertainty about the adoption and the community reaction to this kind of technology. So we are officially in an open beta, and we’ll be taking what we’ve learned from this beta, and looking at whether we should be making any adjustments to how it is presented to users … So it’s a learning experience right now, it’s hard to say, “use it, pay us money and we’ll charge you less!”I certainly can’t promise that. But we have tremendous business intelligence and analytics here, and we’ll certainly be looking at it as a possibility down the road.

These sentiments are echoed by Dennis Harper, the Senior Product Manager for OnLive, while chatting on the most recent Drax Files Radio Hour, where he says:

In terms of the pricing, that was a business decision that we made, and the reason we made it was because we didn’t really know what the usage patterns were going to be for people. Once we understand how people use the system, we may be able to provide a subscription package that says, “for a monthly fee you get this thing, and you get to use it all you want.” Because as we know how these usage patterns work,then we know what we can do.

However, Dennis also adds a note of reality to matters:

But we need to analyse this first, and the fact is, our services are not cheap. OnLive has extremely powerful, state-of-the-art computers in the cloud with massive GPUs and rendering systems and with gigabit data connectivity … and so  it’s a pretty expensive overhead to maintain our service, so we can’t really give it away. What we like to say to people is, “You don’t have to use SL Go. You can use Lumiya if you want to .. but you’re not going to get the same kind of immersive experience that you’re going to get in the SL Go app.

My own view is that the best course of action OnLive could take is to offer both pay-as-you-go and a subscription service. In this way, they capture the best of both worlds, offering those who may have the occasional need to access SL while away from their home computer (and have no interest in any additional opportunity of playing any games they may otherwise be able to access as part of a subscription-based payment) and those who would love to enjoy the full spectacle of SL when their hardware would otherwise prevent them from doing so.

Whether any adjustments to the pricing model will be made obviously remains to be seen. The service itself is barely 48 hours old as a public beta, and OnLive and as indicated in the quotes given above, OnLive – and the Lab – need time to gauge the general response directly as people sign-up to the service at OnLive and, more importantly, use the service beyond the 20-minute free-trial period.

Related Links

• Designing Worlds SL Go special – Treet TV
• Designing Worlds SL Go Q&A with Nate Barsetti – Aview TV
• The Drax Files Radio Hour

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