Category Archives: Opinion

Horizon land auctions: the half-way point

Horizons: looking at the auctions to date

Horizons: looking at the auctions to date

On Tuesday, November 15th 2016, the Lab launched the Premium members’ Horizon community, a “retro-futuristic” mainland environment featuring 36 residential regions each with 24 parcels available for auction to Premium members, with auctions commencing on Friday, November 18th 2016, with parcels being auctioned in batches of (generally) 10.

Obviously with 864 parcels to auction, it would take some time to get through things. However, the holiday period marked the half-way point in the auctions with 432 parcels auctioned across 18 regions. As Whirly Fizzle and I started monitoring things (largely out of curiosity), and I gave a snapshot at the end of the first weeks of auctions, the half-way point seemed a good opportunity to provide a further snapshot, based on how those 432 regions looked as of Friday, January 6th, 2017.

GENERAL STATUS OF PARCELS FOR BATCH 1 (10 regions) AND BATCH 2 (8 regions)
 Auctioned Parcels Available For (Sold / Rented) Original Auction Others
Sale Rent Either Sold Rented Comm. Resid. Aband Pend Unkn
Batch 1 240 95 55 9 (30) (13) 4 18 1 13 47
Batch 2 192 44 66 23 (3) (3) 7 13 1 0 36
Totals 432 139 121 32 (33) (16) 11 31 2 13 83

Notes

  • Parcels Available For = those parcels bid for and placed immediately on sale / for rent / either
  • Sold / Rented= number of parcels actually sold / rented whether placed for sale  or for rent or either. These set subsets of the Parcels Available For figures, and further breakdowns are provided below
  • Original Auction = those parcels which went directly to private residential use / commercial use during the original auction
    • 4 of the residential parcels may in fact be rented out by bidder
  • Others:
    • Aband = parcels already abandoned by original bidder
    • Pend = regions obtained for sale, but either currently not on sale by bidder (6) or removed from sale by bidder (7 – see sales review, below)
    • Unkn = regions which are not currently in use, nor are they apparently for sale or for rent, and where parcel holders have not responded to enquiries.
RENTAL PARCELS SUMMARY
For Rent Total Rented (16)

Residential Commercial
153 13 3
  • 153 is the total number of parcels available for rent (121), and those offered for rent or purchase (32)
  • Of the 153 parcels currently for rent / rented:
    • 89 are offered through one group of rental operators
    • The remaining 64 are offered through 11 rental groups, with between 1 and 14 parcels on offer per group
  • The average weekly rental for those parcels offered for rent is L$885 (low: L$550; high: L$975)
  • The average weekly rental for parcels offered for sale or rent is L$608 (low: L$495; high: L$800)
PARCEL SALES REVIEW
 Total for Sale Sold (32)
 For Sale Below Bid Price
Residential Commercial Both Re-sale
139 17 10 1 4 20
  • Total for regions on sale does not include those parcels offers for sale or for rent – see rental figures above
  • Of the 139 parcels currently available for sale / sold:
    • 98 are offered by three land sales groups
    • The remaining 41 are offered by 12 land groups / individuals, with between 1 and 12 parcels per individual / group
    • 5 parcels are on sale at prices above L$100,000, ranging from L$112,000 (58.98% mark-up on bid prices) to L$249,000 (255.67% mark-up on bid price) by two land holders
  • Average sale prices:
    • Among all 139 parcels for sale:  L$45,408.
    • Among the three biggest parcel sellers (98 parcels): L$37,360
  • The margins between bid price and sale price vary hugely, between just 2.42% (L$41,000 on a bid price of L$40,033) through to 231.38% (L$199,999 on a bid price of L$62,232)
  • Some 45 parcels have been reduced in price since first being offered for sale
    • The average mark-down on their original price being approximately 25.88%
    • 20 are current for sale at below their original bid price
      • Average drop below bid price: 17.44%
      • Largest drop 50.02% – sale price of L$15,000 on original bid of L$30,010
      • Smallest drop is 0.3% – sale price of L$38,000 on original bid of L$38,010
      • The majority of these drops have been to parcels auctioned in the first batch, and bring prices down to more closely match the prices of parcels the same bidders are selling on other Horizons regions
  • Of the four regions purchased and flipped for re-sale, 3 are by residents without an associated land group / business; one is by another land company active in Horizons.

Commercial Activities

Commercial activities are largely stores (avatar accessories, building materials etc.). Two adult club environments are within Horizons and one sci-fi themed bar.

Approximate Revenue Breakdown

The following table gives a breakdown of approximate revenue across the 18 regions auctioned to date. The US $  value is based on L$260 to the $.

APPROXIMATE AUCTION REVENUES – BATCH 1 AND BATCH 2
Auction Batches Approx L$ Raised Through Auction
Approx US $ (at L$260 / US $)
Batch 1 (10 regions / 240 parcels) 8,714,966.00 33,519.10
 Batch 2 – (8 regions / 192 parcels) 4,309,833.00 16,576.28
TOTALS: 13,024,799.00 50,095.38

Unsurprisingly, the two regions with direct access to open water (that is, parcel which directly access water, with no intervening protected land) – Apollo and Pandora, both located on the south side of Horizons and facing Zindra across water open for sailing / boating, drew the most competitive bidding.

BATCH 1 BY REGION (All 24 Parcels per Region)
Region Total L$
Approx US $
Highest
Lowest
Direct Water Access
Apollo 962,882.00 3,703.39 L$80,000 L$29,787 (x2) 6 parcels
Astrid 749,142.00 2,881.32 L$45,009 L$27,087 (x2) None
Galatea 882,008.00 3,392.34 L$70,010 L$27,010 None
Halley 857,738.00 3,298.99 L$60,010 L$27,111 None
Mercury 903,371.00 3,474.50 L$60,010 L$28,110 None
Nova 857,107.00 3,296.57 L$65,010 L$27,110 None
Pandora 1,029,400.00 3,959.23 L$102,454 L$27,110 (x2) 6 parcels
Polaris 960,663.00 3,694.86 L$60,020 L$27,111 None
Thule 785,673.00 3,021.82 L$45,565 L$27,087 None
Triton 726,982.00 2,792.08 L$40,033 L$26,010 None

The second batch of regions auctioned drew considerably lower value bids, with the third batch of regions more-or-less matching the second thus far.

BATCH 2 BY REGION (All 24 Parcels per Region)
Region Total L$
Approx US $
Highest
Lowest
Direct Water Access
Atlas 542.964.00 2,088.32 L$40,010 L$15,010 None
Celeste 495,317.00 1,905.07 L$30,010 L$12,022 None
Halo 461,464.00 1,774.86 L$32,010 L$13,038 None
Neptune 583,522.00 2,244.32 L$40,121 L$12,121 None
Orion 589,377.00 2,266.83 L$37,799 L$15,009 None
Pluto 521,321.00 2,005.08 L$40,000 L$13,039 None
Sirius 580,799.00 2,233.84 L$42,010 L$12,455 None
Venus 535,069.00 2,057.96 L$40,033 L$26,010 None

General Observations

Outside of those bidding on the parcel lots, there appears to be little direct interest from Premium members in obtaining a property within Horizons. Some may be put off by the Adult rating, others by the lack of any covenant. While the high price of bids places during the first batch of auctions might be considered a reason, the second batch of auctions averages close to half the per parcel bid price of the initial batch, and still generated little direct take-up. This appears to be the case with the third batch.

Rentals  – which should allow non-Premium members to gain a parcel within Horizons if they wished – are currently gaining little traction, although this could be own to lack of promotion on the part of the rental groups. Obviously, the advantage of Mainland holding is they are not a tremendous drain on resources in the way that partially occupied private regions can be.

There may be a follow-up report at the conclusion of the bidding. Or at least a summary of potential revenues. Putting this report together was too much like hard work!

Looking at the Second Life 2016 year-end Grid Survey report

The Prim Rig, ANWR Channel

The Prim Rig, ANWR Channel – blog post

On January 2nd, Tyche Shepherd issued her year-end summary on the general size and state of the Second Life main grid.

In all, 2016 has seen a slightly larger loss of private regions compared to 2015: 992 private regions (Full and Homestead) removed from the main grid in 2016 compared to 825 the previous year. This represents a reduction of some 5.6% over 4.4% for 2015. In terms of grid size, the loss of private regions was slightly mitigated by an increase in Linden owned regions, leaving the grid with a net shrinkage of 884 regions overall for 2016.

Taking the year-on-year figures from 2010 onwards (that being the last year the grid exhibited a growth in the number of regions), we get the following breakdown for private regions:

2010 2011 2012 2013
2014
2015 2016
24,483 23,857 20,994 19,273
 18,600
17,775 16,738
Increase
%age
Loss
%age
Loss
%age
Loss
%age
Loss
%age
Loss
%age
Loss
%age
810 3% 626 2.56% 2863 12% 1719 8.2% 673 3.5% 825 4.4% 992 5.6%

While the loss is something of an acceleration over 2015 and 2014, it is still not as drastic as the declines in private regions seen in 2012 and 2013 . Nevertheless, it does indicate a further drop in approximate gross monthly revenues for the Lab. Working on the basis of Tyche Full Private Region surveys I have to hand, a breakdown of recent monthly revenue from private regions can be given as:

  • November 2013: US$3,857,000 (+/- US $52,000)
  • March 2016: $3,385,000 ( +/- US $43,000)
  • December 2016: US$3,162,000 (+/- US $39,000)

This represents around an 18% drop in monthly revenues over a three-year period. While uncomfortable, it’s not outright alarming at this point in time, representing an average loss of about US $19,305.55 per month, compared to the staggering US $63,500 (approx) per month loss the Lab experienced in  2012.

Of course, a loss is still a loss, and sooner or later, continuing revenue decline will have an a visible impact. But it is hard to determine when that might actually be. The surface evidence seems to be that at this point in time, while of concern, the decline isn’t adversely affecting the Lab’s ability to do business. They are still continuing to invest in both Second Life and Sansar, including recruiting for positions working on both. While it is hard to be precise, a reasonable estimation suggests that the company is generating around US $49 million in revenue through Second Life. While we don’t know how much of that is bankable as profit, it’s still a tidy sum in terms of operating revenue for a company of LL’s size.

Some have raised concerns over how much of an impact Sansar will have on SL’s landmass in 2017. I actually don’t think it will. While I anticipate the decline in land will continue (but hopefully at a slower rate than 2016), I simply don’t think Sansar will have any immediate impact on Second Life one way or the other. Not in its first year, at least.

To me, the more interesting question is what can LL do to further offset revenue drops incurred by region losses (and sadly, the answer isn’t simply to reduce tier: that could actually do far more harm than good, given the amounts involved). The Horizons initiative, for example, is one way of spawning additional revenue. We’re now around half-way through that process, and I estimate the Lab has generated around US $45,000 from it thus far. 2016 also saw the private region buy-down offer, which appeared to be enthusiastically received, although numbers are far harder to ascertain on that. Are we liable to see further initiatives in 2017? I’d actually be very surprised if we didn’t.

Private estate numbers ups-and-downs in 2016

Private estate numbers ups-and-downs in 2016

Related Links

Second Life Horizons land auctions, one week on

Horizons: looking at the auctions to date

Horizons: looking at the auctions to date

On Tuesday, November 15th, the Lab launched the Premium members’ Horizon community, a “retro-futuristic” environment featuring 36 residential regions each with 24 parcels available for auction to Premium members. The auctions opened on Friday, November 18th, with parcels being auction in batches.

One week on, and a total of 87 parcels have been or are up for auction, of which, 67 have closed as of Friday, November 25th, marking the first week of auctions. Whirly Fizzle and I have been tracking things during the week, so we’d thought we’d offer an update on how things are going.

Auction Results Fri Nov 18th Through Friday Nov 25th

GENERAL INFORMATION
Total parcels Auctioned to date For re-sale For rent Commercial Residential Unknown
864 67 26 13 5 11 12

Notes

  • “Unknown” parcels are those which appear likely to be put up for sale or rent. Of these:
    • Four have been obtained by land sellers, with 2 initially put on sale, then withdrawn.
    • Five have been obtained by land renters but are not currently for rent.
    • Three could go either way.
  • Of the commercial parcels, four appear to be rentals; one is parcel holder / store operator.
  • “Residential” refers to those parcels purchased by individuals without any obvious land marketing in their profiles & who have not won auctions for other parcels. These could still be sold / rented out or used commercially.

 

RESULTS BY LOT
Lot Parcels Top bid
Lowest bid
Average bid
Av sqm bid
Total L$ paid
1 10 57,270 30,133 43,689.80 42.66 436898
2 12 65,010 30,121 39,976.75 39.04 479721
3 15 40,030 29,510 (x3) 31,306.73 28.65 469601
4 10 42,670 31,110 (x4) 35,464.50 34.53 354645
5 10 40,110 26,010 (x2) 37,751.80 30.91 317518
6 10 33,009 27,887 29,790.20 29.09 297902

 

REVENUE
 Date No of lots
L$ raised in auction Approx US $
 Nov18th-25th 67 2,356,285 9,000

Notes

  • Taking the lowest bid price for all auctions closed to date, and applying it to all remaining parcel yields a potential total revenue of L$24,582,224 / approx US $94,500.
  • Taking a median bid price of L$36,330 based on closed auctions to date, and applying it to all remaining parcels yields a potential total revenue of L$28,955,010 / approx US $111,365.

 

PARCEL RE-SALE PRICING, FRIDAY NOV 25
Total Av sqm auction price Av sqm sale price
Av sqm mark-up
Highest initial price Highest current price Price spread
26 28.05 57.38 104.56% L$100,000 (x3) L$99,000 (x1) L$33,000 (x4) – L$99,000 (x1)

Notes

  • The figures above are only a snapshot – re-sale prices are fluctuating; prices set for parcels auctioned in lots 5 and 6 are likely to be reduced.
  • Initially, 28 parcels were put up for sale. Two were withdrawn on Friday 25th.
  • Of the remaining 26 parcels currently for sale:
    • Six parcels were initially priced at between 25 and 3 times their auction price; all have had their re-sale price reduced by an average of 50%.
    • Four parcels have seen a reduction in price since first being placed for sale of between 2.5% and 21.52% per parcel.
    • Eight parcels are currently for sale at a median of 2.5 times their auction price (ave L$70,000 per parcel). current tends suggest these will be reduced.

 

PARCEL RENTALS, FRIDAY NOV 25
Total Rented to Date Upper rental price
Lowest Rental Price
Median Rental
13 4 L$835/w (x1) L$595/w (x4) L$775/w (x4) / L$795/w (x4)

 

What are you doing the rest of your Second Life?

Paper Dinosaur, 2015

Sorrow for Paper Dinosaur, 2015; image – Caledonia Skytower

By Caledonia Skytower

Last October 24th’s article in Wired by Rowland Manthorpe, entitled Second Life was just the beginning. Philip Rosedale is back and he’s delving into VR ignited the usual round of reactions from fans and critics of Philip Rosedale, Ebbe Altberg, and virtual worlds in general.  Guaranteed, there would be opinions and plenty of “should-haves”, “could haves”, and speculations about machinations we may never fully understand, and to which uncertain credit can be given.  

Philip Rosedale’s particular dream of virtuality is reflected in Second Life, written as deeply as the original code, which continues thirteen years after the first pixels clicked on for the public.  As such, it seems like a democracy and the term “resident’ only reinforces that. Let’s be clear, residents in virtual worlds are not citizens in democratic societies, we are consumers.  We don’t have any more of a “right to be heard” than any other consumer does by a corporation or creator.  

Smart companies listen to their consumer base – it is called good business. Linden Lab has waxed and waned on that over the years, better more recently I think.  Yet no one will ever know their product the way they do.  No one will understand their finances, their market standing, the pressure of industry innovation and its impact on their company the way they do. As a consumer, with a free account, the Lab doesn’t owe me a vote in their decision-making process.  Virtual worlds are not a public entitlement.  Yet it is surprising how many people disagree with that – passionately, vitriolically disagree. The funny thing is, that state of entitlement has been there as long as I have been in SL.

Invictus by Storm Septimus

Invictus by Storm Septimus; image – Inara Pey

I entered Second Life in 2008, which makes me older than some, not as old as others.  In those eight years I have seen a procession of public doomsday fests boil up to a frenzy, and then cool down.  Always, the perceived calamity is touted as the Lab’s fault. Even at five years old, Second Life was doomed, dying, already deceased. An average of 67,000 users on-line from all over the world at any one moment, which would fill my local “home field”, Centurylink Field in Seattle, to capacity but with a lot fewer parking hassles.  Think of that: a football stadium full to the brim twenty-four hours a day. Here we are in 2016 and the averages have dropped to the low 40,000s. That’s still enough for the food vendors to make a tidy profit on game day! And when I think of the things that have happened in those eight years, doom, death, and extinction are not what come to mind:

  • There have been some fascinating educational studies, my favourite being the National Science Foundation funded study in a collaboration between Texas A & M and the Florida Institute of Technology involving college chemistry students and on-line learning.  
  • There is incredible work ongoing with the disabled and people suffering from different medical conditions.
  • Charitable organizations have benefited from the fund-raising efforts that engage a global volunteer and donor base in one of the most cost-efficient fund-raising endeavours in existence.  Relay for Life in SL has raised 2.7 million U.S. dollars for the American Cancer Society in just a decade.
  • Businesses have grown, with individual content creators stretching their wings and flexing their artistic muscles: everything from publishing to fashion, animations, buildings, and furnishings of all kinds.  
  • There have been some amazing creative achievements using the virtual world as a dimensional palette, too many to name.  

In all cases, some enterprises have endured, and some have termed out.  But there has never been a lack for them.  There is always someone charging the fence of what is possible in the platform. Where the platform limits them, people have found workarounds that are clever and industrious.

Sapphire Mirror Lake, Fantasy Faire 2016

Sapphire Mirror Lake, Fantasy Faire 2016; image – Caledonia Skytower

The Wired article refers to a 2006-ish review of user analytics; “Second Life was a retreat for escapists, an outlet for pent-up creativity – a place, as Rosedale once put it, for ‘smart people in rural areas, the disabled, people looking for companionship.'” Hello!  Just by mentioning rural areas and the disabled you just hit upon a huge under served percentage of the general population.  Virtual worlds break down barriers of proximity, and of ability.  That may not be Rosedale’s vision of egalitarian virtuality, but it is a notable accomplishment nonetheless.

Phillip Rosedale is a sprinter.  He gets excited and he sparks new ideas, opens up the Pandora’s Box of possibilities and lets the creativity flow. He sees things and expresses himself in terms that are limitless. Sprinters are essential to innovation.  But you can’t sprint forever. At some point that spark has to transition into something sustainable, based on something more than enthusiastic creative juices.  

That’s where someone like Ebbe Altberg comes in.  No less creative, Ebbe’s temperament is different. He uses limitations to propel rather than obstruct. He is a distance runner – eyes on the long road, not so dazzled by the big picture that he can’t keep moving forward.  Healthy industries need both those who can sprint, and those who can sustain distances. We need them both, and the future of virtual worlds is more promising for the different directions they are taking.

Nothing lasts forever. In that, Second Life is not unique.  It’s possible that those early delvers into on-line virtuality in 1995 thought that Worlds Chat would last forever. Did they even think about Virtual Reality in those days?  Yet with the bubble of VR expanding before our eyes, people are still feeling threatened in what has been one of the most successful, stable endeavours in the evolution of this form of social engagement.  Even though it still turns a profit for its owners, people are determined that Linden Lab has nothing better to do than throw over its consumer base. In some ways, the very openness and lack of restrictions that we value – the legacy of Rosedale – is our own worst enemy.

Wounded Angel by SistaButta. Image - Caledonia Skytower

Wounded Angel by SistaButta; image – Caledonia Skytower

So, what have you been doing with your virtual life?  Have you been learning? creating? exploring?  Have you used the tool – because that’s what it is – to make your life as a whole enriched?  Because in a free and open community, the quality of life is defined by the creativity and industry of that community.  

We all had that thrilling moment when we got past the initial boggle-ment of functioning in the platform, and discovered that our avatars could be a reflection of our emotional selves.  I could wear high heels and run on the sand! I could fly, walk among ancient ruins, meet and work with people who will never breathe the same salt water, pine-scented air that I do.

I suggest that people get burned out on Second Life for any number of reasons.  Some like to blame it on the Lab, and maybe there is some truth in that.  But people also get bored with the same old thing.  For those who do not see SL as a tool, but as a game, it will always become passé at some point – when something newer, faster, and sexier comes along. Whose fault is that?  Is it really the Lab’s fault that they cannot alter enough decade-old code to keep people’s attention? Especially when you know that the entrenched in SL will squawk loudly and painfully at any change that disrupts their  status quo. So the very stability that we crave works against us, for once the thrill of virtual freedoms are over, those who are consumers only will grid fade.

So, we come back to this: what are you doing the rest of your Second Life? The potential for personal and communal enrichment has not been tapped out. Will virtuality expand to embrace the entire earth’s population as Rosedale envisions? Probably not.  Someday, the ship of Second Life will hit the iceberg.  You get to decide what you’ll do now, and when that happens.  Will you wring your hands and cry out “the end is nigh” as you may well have been doing for years?  Will you lob deck chairs at the lifeboats screaming “I told you so!”?  Or will you take your place with the band and go down profoundly playing “Nearer My God to Thee”?  In an open community, you have a choice about how you conduct your virtual life, and what you make of it.

SS Galaxy; image - Inara Pey

SS Galaxy; image – Inara Pey

Years ago a well-respected teacher and legislator in my community was known for saying “life is like a sack lunch.  If you pack it carefully with all your favourite things, lunchtime with be a joy.  If you just carelessly throw any old thing you find in it, there’s a high probability that something will not be very tasty.”  Your virtual living is no different from the rest of your life.  If you treat it as a recreation, you are destined to get bored with it, grow out of it, have it lose relevance, and you will move on.  That’s no one’s fault.  That’s life. If you treat virtuality as an opportunity, no platform, no grid format, no change in terms of service will get in your way because you will always be questing, always be seeking, always be looking for new challenges.

The one notable difference between corporeal and virtual lives will always be the white X in the red box in the corner of your viewer.  You can always turn your virtual life off, re-invent it, reboot it, or just walk away and let it die.  The repercussions are limited. In the corporeal world, such flexibility of change is much harder to manage, and you only really hit that big X once.