Maybe I *am* a cynic, but…

Jack Linden’s latest post on Homestead tier rates makes interesting reading.

In it,  we are informed in glowing terms as to how “Linden Lab’s business remains strong and our revenues are healthy”, so that they can now very kindly “forego the planned homestead price increase in July for one year and also Grandfather tier on Homsteads to the current $95 USD/month”.

Of course, there is a catch: this very “kind” offer is limited to all Homesteads currently operating on the Grid, and those purchased or reactivated before July 1st 2009.  Anyone attempting to buy a Homstead after that date will still get whacked with a hefty purchase price increase and a tier hike to $125 USD/month.

Worse still, anyone who abandoned their OS sim prior to January 1st gets no benefit either – as the offer to reactive sims at no charge doesn’t go back beyond that date, despite the fact many surrendered their sims prior to the end of 2008 because Jack (and others in Linden Lab) stated categorically that Grandfathering was not, and would not be an option. Period.

But even so, at least LL are making an effort, and that should be applauded, surely?

Well, actually no. This “good news” (as Jack has the barefaced cheek to call it) is nothing short of again gaming the land-owning community within Second Life. Why? Well, because:

A) The subject of Grandfathering was first raised back when the whole OpenSpace / Homestead debacle came up at the back end of 2008, and was given exceptionally short shift by Jack himself. It simply wasn’t an option. Now, suddenly it is. So why the shift? One can only assume it is because Grandfathering always was on the cards, but Jack and Co simply wanted to keep this card up their shelves, knowing that if they play it a lot closer to the announced July 1st additional hike in Homestead pricing / tier they could spin things into looking like they are doing people a favour and possibly encourage those who simply abandoned their old OpenSpace sims at the end of 2008 into reclaiming them.

B) If LL are doing so well, with a “strong” business and “healthy” revenues, one has to ask why Homestead tiers are being Grandfathered at all…why not simply announce that the planned price / tier increase has been completely abandoned for the foreseeable future?

Such an announcement would be worthy of note: it would genuinely demonstrate that Linden Lab are prepared to stop profiteering and put user interests first for once. Furthermore, it would potentially make far more enconomic sense over time. After all, what is likely to generate more income:

  • A 6-week opportunistic attempt to artificially bolster Homestead sales before their price / tier makes them economically unviable
  • Maintaining prices & tier at least a further 12 months, thereby keeping Homestead sims on the cusp of profitability for land owners & thus encouraging their continued purchase over a much longer period of time.

But what of those already with homestead sims – surely this is a boon to them, as they are no longer facing a $30 USD/month tier hike on their sims ($360 a year). Well, yes it is – if one assumes that the July 1st tier hike was going to be applied as originally stated. As I’ve said above, I really don’t think this was the case. I think Jack and his gang always intended to offer Grandfathering in this manner. Thus any perceived “saving” is just that: perceived, not actual. so any thanks given  for the “move” in policy is potentially premature.

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Is that the *clunk* of the other shoe hitting the floor?

John Zdanowski (“Z Linden” – alphabet fetishism rules!), has posted a 2008 Quarter 4 report that makes for some interesting reading.

After waffling on about user hours and logins – figures that have always been highly questionable as a measure of the stablity / growth of SL – Zdanowski drops a corker that is breath-taking in the amount of spin it contains.

He gushes: “Based on Resident feedback and the resulting purchases, conversions and cancellations, we believe the changes we made to the product line incorporated the concerns of the majority of our Residents…”

Pardon?

To exactly what feedback are you referring, John? The 4000+ votes on the JIRA that opposed the changes you were making to Openspace sims? The 3,000+ entries in Jack’s / “M”‘s own forum thread on the subject, the majority of which were against the move?

Or are you chosing to ignore these voices – the voices of those most affected, hurt, or simply downright concerned; going for the age-old falsehood that because people are silent, they must be in agreement?

It’s easy to point at so called “daily log-in figures” of 70K+ and decide that 4,000 voices on the JIRA simply don’t stack up by comparison (it’s less than 10%, after all). But to do so and try to claim that, by extension, the “majority” of your user base is, by implication, “happy” with the switch-over is, well, somewhat disingenuous.

Statements such as this simply provide the unkind with ammunition that Zdanowski’s title should actually be Chief Fanciful Officer, for trying to pretend nothing untoward happened between October and December in terms of a user-base outcry.

If one were bloody-minded, one could also point out the face-slap contained in the statement:

“Only about 300 or 2% of the original Openspaces remained Openspaces, conforming to the limits that the Openspace product was originally intended to support.”[my emphasis].

If OS sims were always supposed to be little more than water and trees, John – then why did Jack et al make such a song and dance over the the prim increase to 3750? Indeed, why increase the primmage at all on the Voids? 1875 is still a LOT of 1-prim sculptie plants and linden (or sculptie) trees, and it is still a lot of underwater “landscaping” in terms of corals, etc. Why also, given it must have been evident that OS simwere being “abused” relatively early-on, did you all spend so much time trumpeting the “growth” in land ownership and use in the months following the release of the Openspace product?

However, while some may still smart over the Openspace sim situation – which has done an extraordinary amount of damage to Linden Lab’s relationship with its active user base, whether Zdanowski, Kingdon et al are willing to admit it or not – the fact remains that it is now history, and thus moot.

What I find more telling in this posting is a line casually thrown in towards the end: “As we continue to refine our land offerings,” Zdanowski says, “we look forward to being able to support a lower priced full region offering along with a premium full region for higher load situations.”

Now, in case you haven’t got it – go back and read it again – specifically the words “a lower priced full region offering along with a premium full region for higher load situations.”

He’s not talking about Homestead sim here. He’s quite clearly talking about a new full sim product, to sit alongside the current full sim offering. Sounds exciting doesn’t it?

Read it again. Note the words, “premium full region for higher load situations“. If that doesn’t set alarms bells ringing – it should.

Speculation has been rife over the last several weeks (couple of months) that 2008 will see a change in tier rates for both private sims and the mainland. In the case of island sims, opionion has been split as to whether tier will be increased or whether it will be dropped (to around $250 USD a month).

At the same time, SL as a whole has run into significant resoucing issues which I touched upon not too long ago. Simply put, we’re all now owning / running so much that we’re gobbling up the essential services contained within the server hardware than is required to support sim operations (memory etc), so much so that on a server running fours sims (1 per CPU), a fair amount of processing time within the server is spent “memory swapping” in order to run all the scripts the four sims use – so much so that overall performance of the sims themselves is being degraded.

So what are we to make of this latest statement when compared to these facts?

It could, as Ciaran Laval suggests. be looked upon in terms of a “glass half empty / a glass half full” statement. On the one had, it could be taken to mean that LL are going to offer up a full sim package that sits between Homesteads and the current full sims in terms of price and capabilities (i.e. a 15K prim sim, but with resources more rigorously throttled than full sims, but not as badly as the Homestead offering looks set to be). On the other hand, it could be so brand-spanking new sim / server set-up that allows massive new usage (increased primmage, perhaps the ability to rez and manipulate default prims bigger than 10x10x10, capability of running more concurrent scripts, for example).

But, however you look at this, the lesson of Openspace is clear, whatever the product offered, any associated pricing will not favour users.

For a start, it is hard to see how such a product can be dropped in between the current “full” sim product and the Homestead product – not unless LL are again playing a little game with us. Why is this? Well for two main reasons (I’ll discuss the game-playing in a moment).

  • If the new product is priced up towards the current “full” sim levels, then it will be stillborn. People really won’t see the point in spending what is “almost” full sim prices and tier for a product that offes significantly less than the existing full sim offering
  • Similarly, if the new product is priced close to the current “full” sim price / tier, and then the latter is raised as a result (thus becoming the “premium” offering Zdanowski mentions), the backlash created will completely dwarf that seen during the Openspace fiasco. Which is not to say Mark Kingdon et al wouldn’t try to shove it in people’s faces….

Of course, there is a third option in pitching the new product between the current “full” sims and Homesteads – and that’s to pitch the price / tier down towards the Homestead end of the scale. But again, this could be risky. Price it too close to Homesteads, and there is a risk it’ll simply kill of Homesteads as a sellable product – after all, why pay $125 USD a month ( as from July 1st), when for (say) $200 a month you can get pretty much everything a full sim offers, and the ability to gain sufficient tenants to recoup a large part of the tier….

Mind you, as I’ve mentioned previously, killing off Homesteads may well be part of LL’s longer-term strategy, as they know full well Homesteads are unlikely to be economically viable after the July 1st tier hike to $125 USD a month (and I seriously doubt we’ll see this new product before that date). If so, then pricing the new product down towards towards Homestead levels could be seen by LL as a means of killing off the lame donkey Homesteads while still maintaining a lucrative income stream.

And if the new product is some kind of “super-sim”?

Well, it’s a no-brainer. With current full sims already hugely over-priced at $1000 USD “purchase” price and $295 USD per month CPU tier (that’s a honking $1180 USD a month per server, an insane price to charge, however one looks at it), then you can bet your bottom dollar any product coming in over it will be equally over-priced. Given we were were all once happy to shell out $1675 USD for full private sims, one can see this figure (or one close to it) hovering in the background, together with a tier price perhaps in the region of $400-$450 a month.

One awaits developments with interest.

Is that the sound of a shoe dropping…?

Jack’s back – and this time he comes (almost) clean…

Remember that back in October, OpenSpace sims were suddenly the cause of much controversy, because in Jack’s words they were being “abused” and were proving to be resource-heavy, and thus adversely affecting overall grid performance?

Well, the good news is, Jack has finally come clean and admitted (as we already knew), that the problem is not restricted to OpenSpace sims (although it could perhaps most keenly be felt on them at times), but is endemic to the entire grid – hence Babbage Linden and others in the Linden camp leading discussions on the manner in which such problems should best be handled, which have been on-going since before Jack created the OpenSpace debacle.

But while it is good that Jack has finally admitted the technical issues are more widespread than he has previously admitted (remember, in his words, this was an OpenSpace issue), and has admitted that LL still have a long way to go before they can address the resource use issue effectively (such as Q2 2009), his comments must be taken as a final, tacit admission that the change in sim status and accompanying tier hike for OS sims had next to nothing to do with these issues, and has always been a clawback manoeuvre.

Furthermore, his posting does little to meet his promise that the technical limits to be applied to Homesteads would be disclosed “well ahead” of January 5th 2009.

Sorry, Jack, a post that says, “we’ll let you know some time in Q1 or Q2 how the resource limits will be applied” isn’t any form of disclosure or discussion, however you try and dress it up.

Indeed, the timeline Jack has revealed in his posting is interesting. Could it be that LL’s strategy is – and always has been – to actually to elminate “Homestead” sims completely over time, while simultaneously milking them as much as possible for tier? Isn’t it rather curious that the new “scripting limits” are due to come into force percisely at the time Homesteads are due for a further $30 USD a month tier hike (to $125 USD a month – something one cannot ever see as being credible or sustainable)?

If we take this latest posting from Jack and put it with the others he has made on the OS situation, then his waffle can really be parred down to three simple paragraphs:

“OK. We have this technical issue affecting the whole grid, and we’ve really, really, drastically undersold the OpenSpace product. Therefore, we’re going to use the former as an excuse to claw back what we see as losses on the latter. However, to dress this up, we’re going to appear to give you a whole new product in the process, although in reality, it’ll be offering you a lot less at significantly more per month. And to cover the fact that we’re using a grid-wide issue as an excuse for doing this, we’ll introduce some basic restrictions on the use of these sim which might help a little with the overall issue.

“BUT, because it’s actually going to take us a lot longer to sort out the underlying issue than it is for us to hit you up with tier hikes, we’re going to take your extra $20 USD a month per sim and give absolutely no guarantees these sims will be sustainable after the end of Q2 2009. Indeed, it’s entirely possible that as of the end of Q2, you’ll find these sims are economically unviable, simply because the new script controls we’ve introduced means users on them can no longer rez their favourite scripted objects, and so are all buggering off to full sims.

“At that point, we’ll give you the option of shelling out an additional $30 USD a month on top of your current tier (which we know is completely ludicrous) – or of getting rid of your Homesteads completely – but thanks in the meantime for the extra $XXX income per Homestead you’ve given us.”

I mean, it is bad enough that LL are essentially asking estate owners to take them on trust for the next 6 months while the resource capping is sorted out and implemented; but do they really believe that come July 1st, 2009, people will actually and happily shell out $125 USD a month for something that in all likelihood they cannot use as an income generator, simply because it is so overwhelmingly limited in capabilities (resource use, avatar limits)?

Which brings me to the second part of Jack’s posting – the tacit admission that there is a much wider issue that is having to be addressed by LL – that of grid-wide resource usage.

To repeat: this is not limited to OS sims, but has been a matter of concern for some time.

Make no mistake, resource usage is a major issue within SL. So much so that the discussions on the subject actually pre-date Jack’s original OS sim announcement. And to be honest, something does need to be done – although whether LL’s preferred solution (essentially treating the underpinning resources available on each server in much the same way as prims are meted out) is the best solution is, I gather, arguable.

BUT…given action is required….why bury the annoucement in an OpenSpace sim “follow-up” posting?

Could it again be because LL are aware that such controls – necessary tho they may be – are going to be perceived negatively, and so are trying to gloss over the “bad news”. If so, they are again doing their users a further disservice. Surely the better way of dealing with this issue is to meet it head-on, with full and clear disclosure to all.

But then, as we know from the Tao of Linden – LL’s management insist that transparency in communications is something that is to be encouraged only between employees – it is not something to be extended to we lowly users.

Which is probably why, in amongst all the confusion surrounding the wider implications of Jack’s statements, one cannot help but hear the gun again being cocked as it is aimed towards another Linden foot…

Waiting for the OTHER shoe to drop…

I’ve decided that the first requirement to work at Linden Research is to be able to waffle and obfuscate convincingly.

Katt seems to have gotten the role of “Resident Communications Manager” on the strength that she has this ability down pat; most of her posts are waffling inconsequentialities dressed up as something meaningful.

Jack Linden also seems to have the ability to wear the “emperor’s new clothes” equally well, as his latest post on OpenSpace sims ably demonstrates.

Aside from the 3rd paragraph (“For Openspaces that bill from the 1st to the 4th January, you will be charged as usual at the current level. From the 5th January onwards, Homesteads will bill at the new rate of $95 per month”) and another single line in paragraph 4 (“Please be advised that any conversion requests filed after 22nd December may not be completed ahead of January 5th”), this positing actually doesn’t contain anything remotely newsworthy or which hasn’t been previously stated.

Most tellingly, it still fails to mention what the undefined resource caps (beyond avatar limits) are liable to be – what’s more, it doesn’t even make a single mention of them and how they may affect “Homestead” usage.

Now granted, while there is a resource issue that is affecting SL as a whole, and it might be said that no firm announcement on the subject can be made until those directly involved in the decision-making (Babbage Linden, etc.), have come to a final decision – leave us not forget that the re-definition of OpenSpace sims, together with the price hike were originally dressed-up as being “necessary” to alleviate this resource issue and “restore” grid stability.

Ergo, Jack Linden’s post is an alleged “update” on the situation. As such, one would at least expect some mention of the resource issue and what it potentially means for those currently owning OpenSpace sims in order for them to better assess whether it is in fact worthwhile keeping said sims on beyond January 5th, or simply raising a ticket to get rid of them now.

We have just two weeks to go before the switchover – and a good proportion of those two weeks are taken up but seasonal holidays, leaving Jack and his cohorts precious little time to fulfil their promises of full disclosure of Homestead sim performance levels “well ahead” of January 5th. Certainly, there is little time for Linden Lab to “bring Residents into the dialog [about the OpenSpace switchover] earlier” as promised by Mark Kingdon over a month ago.

Mind you, Kingdon’s and Jack’s keenness to engage with users over the subject was demonstrated in the forums at the time the policy change was announced (one reply posted by Kingdon himself and three or so from Jack), and the fact that this latest blog posts is both closed to comments and has no corresponding discussion thread in the forums certainly speaks volumes about LL’s willingness to “bring Residents into the dialog”.

And even Jack’s utter failure to mention anything about potential caps on “Homesteads” suggests one of two things. Either a) the resource issue is now irrelevant as far as OpenSpace sim issues are concerned now that the tier hike has been determined; or b) he simply expects people to take Linden Lab on trust.

Unfortunately, trust is a commodity in short supply when it comes to user / LL relations, and one is left feeling that we’re all waiting for the other shoe to drop in this matter….

I’m amazed….

…that there are people willing to accept this ploy.

It’s probably fair to say LL have played somewhat fast and loose and got precisely what they wanted. Forget the hype over the original 66% tier hike – that was never going to happen in one bite, and they knew it.

So, bravo, Mark et al! You’ve achieved what you set out to do, and what I suspect you wanted to do from the start – introduced yet another tier level, a “new” form of sim, & got residents to readily accept it. In doing so, not only have you managed to portray yourselves as “listening” and “responding” – you’ve actually got people congratulating you on the “new policy”!

It’s been a very clever game plan. No doubt this outcome is more-or-less what you wanted from the outset. However, you knew that if Jack simply annouced this in his blog entry of October 28th, the backlash would be huge, and you’d have been left with nowhere to turn or alternatives to offer….

So instead, you cleverly got people’s blood up by overstating the intended price-hike on existing OS sims. Rather than 15%, you went for an improbable 66% – and then you left it up to residents to suggest what you were hoping they would – the introduction of an additional sim type with reduced capabilities.

No wonder Jack so quickly leapt on this during his “impromptu” Conceierge meeting a couple of days after the 28th October announcement.

Thus, by clever baiting and slight-of-hand, you lured people into a backlash against non-existent massive hikes in tier rates, leaving you free to play things out for a week or so before putting forward your intended changes by way of a “compromise” in the knowledge that people would a) come to you in thanks, b) go away believing they had “won” over the issue.

BUT – the “victory” may yet be pyrrhic. OpenLife is maturing and is gaining backing (and not just from disaffected SL users). The pricing policy over there for both “Mainland” and “private clusters” is attractive and is set to allow any increases that might be required in the future without hitting people in the pocket. Yes, it has got some way to go before it can offer all the positive aspects of SL – but they are coming. What is important is that you’ve already caused a lot of talent from SL to make the cross over and start work there.

You may yet find that, as OpenLife (in particular and its sister open source grids in general) continue to rapidly mature, you have through these games, opened the floodgates and will be unable to stem the flow of users out of SL – and with growing competition, can you be so sure the influx of “new blood” you hope the Big Spaceship deal will bring, will compensate?

OS sims: numbers and questions

I read an interview with Mark Kingdon (aka M Linden – has he mistaken Linden Lab for Britain’s MI6, or has he an innocent love of all things Bond?) with Wagner James Au (known in-world as Hamlet Au) on the OS sim situation that raised some interesting questions – and which lead me to do a little research and some math (which I’ve been able to verify as being reasonably correct thanks to Vint Falken’s excellent work). The interview also lead me to again question where Kingdon actually see the future of Second Life residing….

The relevant quote on the numbers front came early on in James’ piece, quote:

“While Kingdon won’t say what exact percent of the world is now comprised of Openspaces (“That’s not a number we publish”), he acknowledges it’s been a significant portion of SL’s geographic growth.”

Coupled with comments published elsewhere by James on the farago following the original hike announcement, I started thinking about sim numbers, percentages and suchlike.

At a recent Virtual Worlds conference in London, Kingdon and CFO John Zdanowski (or “Z” – another with a Bond fetishist?) intimated that there are around 32,000 sims deployed on the SL grid, of which we know some 5082 are Mainland, and supported figures put the number of Openspace sims at around 13,000.

By my reckoning that makes just under 42% of SL “OpenSpace”, which kind of makes Kingdon’s assertion that “, “this price adjustment affects only a portion of land in Second Life;” something of a stretch.

It also reveals something far more interesting of note:

  • IF the hike went through at 66%, a loss of around 40% of these OpenSpace sims (5200) could be absorbed by LL without significant financial hardship
  • Some 1300 servers would be saved out by LL, ready to be recycled back into the grid, the majority of their original cost already covered
  • SL would suffer a land mass reduction of some 20% in the process (which might be viewed as a good trade-off by LL, given the amount of Mainland lying fallow).

Now, were we to take these figures a little further and adjust them ever so slightly, the trend remains favourable.

For example: if the tier hike is dropped to 30%, LL could still absorb around an 18% loss in used OS sims before feeling the pinch, and see around 600 servers saved out for a more manageable reduction in overall landmass (under 10% lost).

So… could this be the real art of LL’s game?

Will we see that tomorrow’s announcement will offer a “compromise” wherein LL will still up tiers, but at a “reduced” rate of no more than 30%? After all the furore over the original announcement, this could certainly be spun as a demonstration of LL’s “willingness” to “respond” to resident concerns – and yet get what they original set out to achieve: increased revenues from the surviving OS sims while cycling servers back for re-use and in part redressing land use towards the Mainland?

Others have already speculated that LL’s game had always been to bring in the tier hike in at a figure somewhat lower than the original 66%, and thanks to Vint’s research and my suggested figures above, it’s pretty evident that if this is indeed the game plan, it has some pretty positive results for LL all around.

There is something else within Kingdon’s comments during his chat with James that caused eyebrows to rise, quote:

“Somewhat related to that, he spoke to a point mentioned in my GigaOM article about the protest, which described the steady decline of Premium subscribers as a subject of great concern for the company. According to him, my inference there isn’t accurate: “That’s one of the only figures that’s going negative,” he said. “You can’t use that as an indicator of the overall health of the land market… Premium subscriptions are immaterial in our overall business.””

…TILT!!!!….”Premium subscriptions are immaterial in our overall business….”

Now…either Mr. Kingdon received a sharp whack to the back of the head when saying this (and as such should a) be forgiven for such an utterance, and b) needs to avoid people standing behind him when speaking in the future) – or he has not just let the cat out of the bag – he’s also given it a first class plane ticket to a destination of it’s own choosing.

As pointed out by the redoubtable Anne O’Toole, if this really is the case – that Premium Account holders are “immaterial”, then it could be extension be argued that Mainland usage is “immaterial in our overall business”, as one of the “perks” to Premium Accounts is access to Mainland parcels at reduced tier. Similarly, given the higher level of support promoted by LL for Premium Account holders, it could be said that technical support is immaterial to LL (actually, some would likely argue this is very much the case anyway, but you get the picture).

And if Premium account holders are “immaterial in our business”, where does that leave the vast number of “free” account holders…?

One could be generous to Kingdon (as Anne herself is) and point out this is an “innocent” (if massively unfortunate) slip of the tongue that simply needs to be redressed.

But “slips of the tongue” like this are more usually the result of the brain accidentally revealing the real thought processes, rather than just getting “words muddled”.

As such, and taken alongside the recent corporate annoucements I’ve previously mentioned, one can’t help but feel Mr. Kingdon has, in this “slip” again indicated he believes the “enterprise solutions” market is where he wishes to pitch the grid and SL, and the rest of us are little more than deadweight Linden Lab has to lug around.