Linden Lab announces major SL private region pricing restructure

Isle of May; Inara Pey, March 2018, on FlickrPrivate region set-up fees and monthly tier rates will be reduced from July 2nd, 2018 – see below (region pictured: Isle of Mayblog post

Updated to include a quote from Ebbe Altberg

On Wednesday, June 20th, while speaking at the Meet the Lindens event, Linden Lab, and a a part of the SL15B celebrations, CEO Ebbe Altberg made a major announcement concerning private region maintenance fees (aka tier).

I’ve been saying for quite a while now that I think the balance between what it cost to have land versus what it costs to transact or buy and sell in the economy is a little off-kilter. Land is quite expensive but selling things in the world is quite cheap, comparatively speaking. So I a basically fell we have fairly high real estate taes but very low consumption tax. so we’re trying to adjust this so that it’s better. That was part of the Mainland price reduction, and today I can also announce we’re going to lower the cost of private estates!

Ebbe Altberg, Linden Lab CEO speaking at SL15B during his Meet The Lindens session.

As from July 2nd, 2018, private region tier will be reduced by 15% for full and Homestead regions. In addition, the one-time set-up fee applicable to Full and Homestead regions is being reduced.

This means that after July 2nd, 2018, private region set-up fees and monthly tier rate will be as follows:

New Private region pricing structure. Note that as from July 2nd, 2018, new OpenSpace regions will not longer be available as a product (see below for more). Table courtesy of Linden Lab. Remember set-up fees include the first month’s tier

There are some caveats to this restructuring:

  • Skill Gaming regions are not included in this restructuring.
  • This reduction does not include grandfathered  / “bought down” regions as they are already priced well below these new rates.
  • From July 2nd, the OpenSpace (“water”) class of region will no longer be offered as a product – however, existing OpenSpace regions already in use on the grid will continue to be supported, and will be subject to the tier discount.
  • Education/Nonprofit (EDU/NP) discounted full islands will be re-priced to maintain their 50% discount off the regularly priced full islands, with the new  tier rate of US $124.50 applying at the start of that island’s next invoiced billing term.

Linden Dollar Purchase Fee Increase

As noted above, Ebbe has previously indicated (see here for example), Linden Lab is attempting to re-balance how the company generates revenue through the Second Life platform to help reduce region tier pricing. This is being done by increases in fees charged elsewhere within the service.

Thus to help offset the revenue loss resulting from this reduction in private region fees, Ebbe also announced that the cost to buy Linden Dollars will be increasing to US $1.49 per transaction (compared to the current rate of US $0.99 cents per transaction).

Feedback

Over the last few years we’ve seen genuine efforts on the Lab’s part to try to ease the burden of tier for region holders.

  • In 2016, there was the region buy-down offer, which allowed private region holders to grandfather their regions for a one-time fee. This reduced the monthly cost of Full regions to US $195, and Homestead region to US $95.
    •   As noted above, these regions are excluded from the 15% tier-rate reduction.
  • In March of 2018, the Lab  reduced monthly mainland fees by 10%, while also doubling the amount of tier-free land available to Premium members (from 512 sq metres to 1024 sq metres).
  • (Note I’m excluding the 2011 Land Sale from this list, as it was a long time ago, and something of a different strategy compared to trying to lower tier costs.)

Both of these moves were very positively received by users, and given that requests to reduce tier have long been made, I’ve little doubt this announcement will be equally well-received.

One thing it should do is confirm the Lab is committed to trying to improve Second Life for users – not only in technical terms, but also in making the platform’s revenue generation something that is more evenly spread among all users.

Tyche’s tweet on the relative fall-off in region losses between 2018 and 2017

Even so, this is a bold move, and one that can only be taken to mean that recent moves to pivot some of the revenue generation away from land (e.g. through the transaction fee increases (March 2016, June 2017 and November 2017), possibly coupled with more recent uptake of premium user subscriptions, has given the Lab confidence that they can reasonably offset revenue loss from the tier reduction through other channels.

Certainly, it shows how far things have come since 2013, when it was hard to see any tier reduction not hurting the Lab’s bottom unless alternative revenue sources could be reliably built-up.

With Tyche Shepherd of Grid Survey fame reporting that the rate of decline in private regions continues to ease, it will be interesting to see how this announcement affects the overall interest among those wishing to acquire land of their own, either directly through the Lab or through any of the major land realtor operations in Second Life.

In the meantime, you can read the full text of the Lab’s announcement here.

My thanks to Xiola and Brett Linden for their assistance with this article.

 

Advertisements

6 thoughts on “Linden Lab announces major SL private region pricing restructure

  1. SL Charges Reduction Misrepresented

    The newly announced 15% tier-rate reduction is a wolf in sheep’s clothing. That reduction Does NOT apply to us that have paid incredibly higher fees (200% on average) to have our lands reduced to grandfather rates in the past (thus in one big Catch-22 causings us to pay fees only to be excluded from the new fee reduction. The subtle Second Life sneaky maneuver here is that we now have to pay 50% higher transaction fees “to cover the our (SL’s) increase in costs for reducing your tier”.

    At the risk of sounding redundant, let me explain that another way. Experienced land rental companies get none of these discounts that LL is offering to the new companies they hope to attract due to reduced fees designed to increase their income while at the same time building a new tax basis made up of future rental companies that will become the target of new usurious fee increases. LL had done it more than once. Like Jeremiah said “can a leopard change its spots?).

    This is classic LL policy: squeeze blood from current content providers (developers of properties to sell or lease) but go after new blood to bring new fees (taxes) to LL. No wonder so many land service providers leave SL every year. New guys and gals… beware. The fine print is very small and incredible well hidden in legalese designed to get you to sell your soul for little to nothing.

    Like

  2. I’m actually happy about being able to pass along the savings to the folks who run the one ungrandfathered region in my neighborhood.

    As for the others, well, we’ve been realizing grandfathered and buydown savings for a while.

    The tax chaos fallout from South Dakota vs Wayfair will likely eat some of the savings… until the next discount or price change.

    Solo son numeros.
    -ls/cm

    Like

Have any thoughts?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.