Elf Clan Social Network

There is an ancient Chinese curse:
"May you live in interesting times."

Lately we are seeing "interesting times" at Linden Lab. Thought we'd take a look at a few of them.


During a time when years-old showstopper bugs are still around... when lag is bad enough to stop an elephant... when the asset servers are sputtering and textures are still-- after almost 7 years-- loading at a snail pace (or not loading at all)... Linden Lab still finds time to work on new toys.

Voice morphing is the newest gimmick from LL. In itself, it probably falls into the category of other toys-- it's interesting but not essential. But this toy is a little different in one significant way:

Linden Lab is charging L$750 a month for it.

Yes, instead of this being a new feature that might actually benefit the grid (and try to get people to stay on the grid)... Linden Lab is introducing the first of what I expect to be a long line of "for-pay features". Yes folks, this one is totally for the profit.

L$750 a month (the equivalent of about US$3.oo). That's not exactly cheap. Now the question is this: what exactly are they going to do with that L$750? Are they going to sink it and remove those L$750 from the market? Or are they going to try to sell those L$750 on the Lindex... a system that is already flooded with excess L$? (Some claim largely due to Linden Lab already flooding the Lindex with their own sales).

An interesting question. Which brings us to the second item of interest...


Yesterday the Lindex hiked from L$260 per US$1 to L$269 per US$1.

Now to most people, they would think, "Yaaaay! More L$ for less money!" And they'd be right. However, there is a very dark side to that. You see, while the customer is getting more for their buck... the merchants and land owners aren't. They're having to accept less US$ in payment for their services. The downside there is that it's primarily the merchants and landowners that pay for Second Life.

Would you like YOUR paycheck to drop by 3.5%?

The cautionary thing about this is that there is no one and nothing in place to stop the L$ from devaluing even further. Is this current devaluation a temporary market glitch... or a long term trend of general economic collapse? While we try not to be pessimistic in such things, the honest truth is there is no way of telling. The way Linden Lab has been running things the last two years... any indication of failure could be THE indication.


The last two years on Second Life have been a nightmare for its customers. That Linden Lab seems totally unaware of that fact is just astounding. Look at the things we have had to deal with over that period:

* OpenSpace / Homestead sim bait-and-switch ludicrous price hike that destroyed over 5,200 sims
* Release of an incredibly bad Viewer 2
* Change in TOS regarding third-party viewers that prevents us from backing up our own builds
* Mono-based lag that drags sims to a standstill
* Stop-dead, extensive lag every time someone ports in or out
* Stacking sims 8 to a server-- when sims are already lagging each other to excessive levels.
* Total failure to control CopyBot intrusion on SL-- resulting in the theft of tens of thousands of merchant creations-- and subsequent failure to handle CopyBot abusers as the criminals they are
* Two (count them, two) Federal Class-Action lawsuits against Linden Lab in two different areas of improper business
* XstreetSL policy changes and attack upon XSL merchants and freebie listings
* Continuing critical-level and showstopper bugs

... and that's just the tip of the iceberg. All of this has resulted in zero and even negative growth figures for Second Life. These things are not promising.

Now they're charging for features? What are these people thinking? One can only suck so much in "taxes" out of the people... until there is no more to give. Then it becomes revolt time. Linden Lab could stand to learn the lessons of history.

Several acquaintances have commented the last few months that Second Life is becoming "less fun"... some that it's not fun at all. Merchant friends have told me they don't even "do" SL any more... they just sell stuff and spend their free time elsewhere.

When it gets to that point... Linden Lab is in trouble. They've been running the company in a very poor manner, with a self-focused management method that is leaving their customers cold. All indicators are that this is a trend that is increasing... not improving.

Yes, I do believe Second Life has become an environment of "interesting times". Whether it survives those times or not is anyone's guess.


Views: 23

Comment by Zauber Paracelsus on June 17, 2010 at 10:36am
I had heard that the value had slipped further than 269 to almost 300
Comment by Koni Lanzius on June 17, 2010 at 11:24am
Don't forget the F rating with the Better Business Bureau that suddenly vanished after you blogged about it.
yea, I'd say SL is much less fun than it used to be due to lag. Ya can't shop, ya cant surf, ya cant do much of anything if you are in most sims. It's become a miserable experience!
It's astounding that they are turning a blind eye to all of this.
Comment by Wayfinder Wishbringer on June 17, 2010 at 2:43pm
JD: "And I don't buy Avatar as an excuse - didn't notice any change in the LindeX, lag or log-ins during its release."

LOL yeah, that "Avatar" claim is one of those, "Oh... and how do you prove that exactly?" I didn't notice any sudden population or concurrency jumps following the release of Avatar. If anything... they have declined (and I watch such pretty closely).

I mean what... people go see Avatar and suddenly they magically start thinking "Second Life"? How does Linden Lab make that connection?

JD: "Buy is currently at 286 and it's been 269 - 273 for the past 2 years... "

Yes. One the Seller side, Sell is currently 275. It has been right at 258-260 for that same period of time (and yes folks, that is a discrepancy that I've pointed out to numerous folks in the past... how is Buy 286 and Sell 275? Someone sure seems to be skimming off the top. Don't buy LL propaganda trying to explain that-- it doesn't add up).

So this week, L$ went from selling for 260 / US$1 (I know because I just cashed mine out last week... thank goodness)... to 275 / US$1. That is a merchant / landholder profit decrease of 5.76%. Would anyone like to guess what a 5.76% decrease is going to do in overall prices and economy in Second Life?

I can tell you what such things do: When sim fees jumped from US$195 to US$295 a month... SL rent and merchandise prices pretty much doubled. The big merchants on SL are in business-- real business. When their profits decrease by over 5%... they will pass that loss on to their customers, like any business. The result will be devaluation of the L$ and inflation of end prices.

When I first posted this blog earlier today, the L$ was at 269. Now it's at 275. Great news for L$ buyers. Bad news for merchants and landholders... and they're the ones keeping Second Life online.

It will be interesting to see what Linden Lab does to handle this. What we are looking at here folks... is the potential beginning of a Second Life recession.
Comment by Wayfinder Wishbringer on June 17, 2010 at 2:52pm
(Alternate viewpoint: Some may argue that with L$ so cheap, people will buy more L$ and spend more... which is good for the merchants. But.. in order for that to happen, the L$ will have to stop devaluing, and the people will have to buy at least 5.76% more across the board for merchants to just break even. Whether that happens or not is anyone's guess.)
Comment by Mean Golem on June 17, 2010 at 3:42pm
It could just be me or where I go but i've been on the ambrea rp sims for a while now and really havent experienced much lag and there are quite alot of people around and combat running rampant nearly 24/7. I sort of wonder why that is. But if I go anywhere else its more or less lag city. Confuses me quite a bit on that issue.

I suppose the $L issue isnt a big deal if your not a vendor so I don't feel the pain at all at this point. Although i've been considering getting back into the biz and amybe open up a shop with my new roster of weapons and armaments. If anything just to relate some.
Comment by Wayfinder Wishbringer on June 17, 2010 at 4:50pm
It helps non-merchants to understand better if we put it in terms folks can relate to.

Let's say a merchant has 100,000 L$ to sell. I know that seems like a lot... but to an active merchant it's quite common (some merchants sell 1 million L$ or more at a time).

At 260 / $1... the merchant would get approximately US$384 for that sale.

At 275 / $1... the merchant would only get US$363. That's a drop in income for that person of 5.67%.

That may not seem alarming unless we consider reality. The reality is this:

No matter who we are on Second Life, no matter what we do, we are affected by merchant sales.

For example in the case of Elf Clan: a sizable chunk of our sim fees are paid by merchants renting booths around sandbox. They get their rent fees from sales. Thus in a very direct way, our sims depend on merchant sales.

There is really no such thing as a "freebie" account on SL. While it may cost that user nothing... someone is paying for that account somewhere. In most cases, that someone is merchants or land barons.

Reality: there are many merchants who make either their entire living... or a sizable chunk of supplementary income from Second Life. A 5.67% decrease in L$ value is a 5.67% decrease in their living wages. What effect is that going to have on the Second Life economy overall?

So while we may not immediately sympathize with merchants, and some may think "Wooohooo! More L$ for my US$!"... in the end, we're all going to pay for it.
Comment by Mean Golem on June 17, 2010 at 5:41pm
Clear as crystal when put like the.

so what about the lag differences from 1 cluster of sims having a peak of activity and little to no lag vs sims having little activity and tons and tons of lag?
Comment by Mean Golem on June 17, 2010 at 5:42pm
rather, how and why is that going on. for example, in ambrea everyone is wearing a combat system/hud type thing and scripts are going off all the time with the fighting. yet i go to say elvenmyst and not alot is really going on but it feels like im in a quicksand pit. (sometime not all the time. it seems to spike and drop alot in elvenmyst)
Comment by Balpien Hammerer on June 17, 2010 at 6:24pm
The way the big networked merchants handle this is that they make day to day adjustments of their wares. If the cashout rate declines, they adjust all their vendors to increase product prices by that amount.

The tough part are the big estate holders who have people paying them in Lindens. They *have* to cash out regularly because LL does not accept payment for SIM tiers in L$. So, either the estate holders raise their parcel tier rates or they start eating into cash reserves hoping for the market delvaluation to settle down. What I find interesting is that LL usually keeps the lindex tightly flat by offering lindens at a rate to discourage the speculation. Theye stopped doing that about a month ago. THink about it.
Comment by Zauber Paracelsus on June 17, 2010 at 6:26pm
Some sim owners take payments for their parcels in USD through paypal. I used to think it was strange, until I learned that they couldn't pay in L$ and had to convert it all to USD with a 3.5% fee on the top.


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