Linden Lab Reduces Prices
Published April 7th, 2008In a recent post on the official blog, Linden Lab has announced they will be lowering the initial purchase fees of both mainland and island regions in Second Life. This announcement comes shortly after the price drop for Open Sim spaces, allowing residents who already own at least one island to purchase open space sims in bunches of one rather than four. While fees have drastically dropped for both Mainland and Island’s, but it’s important to remember that how these two types of regions are purchased is rather different.
Previously island’s went for a flat fee of $1,695 USD a month, and mainland regions start in auction at $1,250 USD but could often go for as much as $2,000 USD by the time the auction was over. The fees have now been reduced to $750 USD as the starting point for mainland auctions and $1,000 USD for islands. This represents a 60% and 58% drop in price respectively, since Linden Lab first introduced Class 5 servers and then raised maintenance prices by 50% in the fall of 2006.
Monthly maintenance fees will remain at $195 USD a month for mainland sims and $295 a month for islands (With a few grandfathered islands at $195 a month).
(Note the data for May 2007 is missing)
In these charts we can see a definite increase in island and land purchases in the first quarter of 2007. Even as Linden Lab dumps mainland regions onto the user base (And the land value drops from 12L per m2 down to 6L per m2), the debut of the new Class 5 servers, even at a higher price point seems to have been a success. As spring turns to summer though, we do see a lull in island purchases, while land sales continue to go strong, even as Linden Lab reins in how many regions they are creating.
In the fall of 2007, region production is several tampered, it is a mere fraction of its spring and summer numbers, but island sales stay relatively flat. This spring we can see the number of regions going up for auction starting to pick up again, and a sudden spike in island purchases as the new Open Space Sim policy is announced.
Linden Lab doesn’t seem to be able to get a break these days, people complained about when they raised prices and they complain about when they lower them. But looking at the data tell us an interesting tale of the somewhat fickle nature of Second Life’s user base. Though it seems demand is always there, sometimes the Lab struggles to keep up with it, and sometimes the Lab out paces demand.
It will be interesting to see how this latest change plays out, we’ve already seen a spike from the new Open Space Sim policy, can we expect a spike akin to the debut of Class 5 sims? And what of hardware costs, has anyone done a detailed cost analysis of the Class 5 servers as they were in the fall of 2006 and now?
Date acquired over the months from the Second Life economic statistics.
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