Forum Link: Original Post

Town Hall with Philip Linden
Topic: Land Auctions and Private Island Changes

Jeska Linden: Hey everyone, we'll start in just a few minutes! :)
Jeska Linden: :)
Jesse Linden: hiya
Philip Linden: Hey everyone!
Jeska Linden: Welcome to the Town Hall with Philip Linden. Philip is here to discuss the newly announced land pricing changes.
Philip Linden: OK, I guess I'll assume the position up here ;)
Philip Linden: I've gotta get in-world at times other than this.
Jeska Linden: First some guidelines for the discussion. We will be focusing this Town Hall on questions about the new land pricing changes, please don't submit your technical support or other off-topic questions, as they will be skipped over.
Philip Linden: OK so thanks for the short notice meeting.
Philip Linden: Let me restate and elaborate on Robin's mail...
Philip Linden: and add stuff that came up in discussions with you guys, etc, in between now and then.
Philip Linden: And after that I can just take questions and talk.
Philip Linden: OK... so:
Philip Linden: Islands will cost $1250, increased from $980 before.
Philip Linden: Same monthly payments of $195.
Philip Linden: This is because they cost us more to set up and manage, and because they have better capabilities and should logically cost more.
Philip Linden: Also, we will stop trying to guess at the number of sims to put online in mainland auctions...
Philip Linden: instead we will switch to a system where there is lots of land online,
Philip Linden: and the first bid on a parcel triggers a 48 hour auction.
Philip Linden: This will allow people to pick a plot of land,
Philip Linden: make a first bid above a minimum to start the auction,
Philip Linden: and then compete at auction as appropriate.
Philip Linden: The minimum bid to start an auction will be based on a price of $1000 for the privately owned land in the sim.
Philip Linden: If there is Linden land like roads or other civic structures.
Philip Linden: The price will adjust for that.
Philip Linden: So if you are buying in a sim with 10% linden land, for example,
Philip Linden: the mimimum price would be $1000 for the other 90%.
Philip Linden: We will still make roads and do all the other planning and design work on new land.
Philip Linden: No changes there.
Philip Linden: We will still deploy first land sims.
Philip Linden: as before.
Philip Linden: No tiger I mean that the private land will sell for a total of $1000.
Philip Linden: regardless of how much linden land there is.
Philip Linden: So if folks don't want linden land, I suppose they won't bid and we'll put less.
Philip Linden: This is because we are trying to cover minimum cost of the machine.
Jeska Linden: Please hold your questions until Philip is done and then send them in an IM to me
Philip Linden: We can go ahead and do that if folks really want to,
Philip Linden: in thinking about this.
Philip Linden: there were only 40 different people that bought land at auctions.
Philip Linden: but I wanted to give some stats that may be helpful
Philip Linden: In the last month,
Philip Linden: A few people have asked about still parcelling land to smaller sizes.
Philip Linden: This is compared to 2,700 people that bought land in world.
Philip Linden: So this is a 65 to 1 ration.
Philip Linden: most people are buying in-world.
Philip Linden: There are currently about 3,900 plots of land of 1 acre of below for sale in the world.
Philip Linden: So again much larger inventory than the auctions.
Philip Linden: But if folks want us to parcel to smaller sizes,
Philip Linden: we can look at doing that.
Philip Linden: I'm just pointing out that as SL grows,
Philip Linden: the auctions really won't be where people buy land.
Philip Linden: In any case.
Philip Linden: Since the new land will be a much smaller fraction than resale land.
Philip Linden: Let's just get into the questions so we can talk... Jeska?
Jeska Linden: Questions can be sent to me (Jeska Linden) in the form of an IM. Questions will be answered in the order they appear on my screen.
Jeska Linden: I'd also like to ask those who have joined us here in Borrowdale to please hold down the noise
Jeska Linden: First question -
Jeska Linden: StoneSelf Karuna: After doing the math, the break even price for buying land now and reselling looks to be between L$ 5 / square meter and L$ 6/ square meter. Was this LL's intent?
Philip Linden: the resale price seems to be generally driven by the auction closing price, which has been right around $1000/sim lately.
Philip Linden: so this shouldn't really affect the likely resale price.
Philip Linden: The minimum is roughly at current closing prices.
Jeska Linden: Pituca Chang: Are the future mainland sims still going to have Gov Linden protected land, and infrastructure?
Philip Linden: Yes the mainland will still have infrstructure, just as before.
Philip Linden: We think we are doing a good job there.
Jeska Linden: Bri Koolhaas: why's the web page already showing $1250 for islands ?
Philip Linden: I don't know which page you mean.
Philip Linden: the changes will be effective July 15.
Philip Linden: OK we'll fix if wrong.
Jeska Linden: Travis Lambert: I'm concerned that the "enhanced feature set for private islands versus the mainland" being touted will make features being requested for the mainland, such as delegatable parcel tools designed to *prevent* grief less of a dev priority...
Jeska Linden: ...Is this a valid concern and why/why not?
Philip Linden: Nope we will not do less on the mainland features.
Philip Linden: But there are certain things that make sense only on an estate,
Philip Linden: like total limits of flyover, for example.
Jeska Linden: Please keep the chat down here in Borrowdale.
Philip Linden: And those things should cost more because they are of benefit to the owner but not the whole community.
Jeska Linden: Brampton too ;)
Jeska Linden: Catherine Cotton: Arn't you afraid of price fixing by the land barons who can afford 1k -1250. Just passing that cost onto those who can least afford it?
Philip Linden: We will put enough land online at a fixed minimum so that whoever wants land can get it.
Philip Linden: I suspect that this will allow more people to buy from auctions, not less.
Philip Linden: I can check but I doubt that many sims have sold for less than $1000 at auction.
Jeska Linden: Nolan Nash: Is it correct to assume that all reclaimed land will now be fed into the first land system, and not to the auction, and that the auctions will only be for full sims
Philip Linden: We can still sell parcels, so not all reclaimed will go to auction.
Jeska Linden: Olmy Seraph: Hardware costs continue to decrease across the market. How can you use increased costs of servers as a justification for this price increase?
Philip Linden: we buy faster machines - we get the best hardware we can for about $1000.
Philip Linden: Last year that was P4's.
Philip Linden: Right now it is dual core opterons.
Philip Linden: We buy the best we can get for $1000, so that newer sims can run faster
Jeska Linden: milady Guillaume: around the world, there are parcels marked as "land rush" what will become of them?
Philip Linden: We've never heard of that. Can you send me an email with where they are?
Philip Linden: Not intentional.
Jeska Linden: Darque Angel: I'm not understanding this at all really seems as though if you don't have a pile of LL or RL $'s its going to cause less people to own land ? And or force them to buy at high
Philip Linden: I do not think that this will increase prices, especially on the mainland.
Philip Linden: as I said before... .
Philip Linden: we try to pass on costs.
Philip Linden: for the islands we guessed low... they are more expensive to setup and maintain.
Philip Linden: hence the price increase.
Jeska Linden: Angel Cinquetti: 2. How about limiting the amount of land 1 person can own ? It is a big issue for the economy as well as morale when 1 person holds all the land.
Philip Linden: I can't imagine what amount would balance large projects with protecting land for all. So I don't think that would work.
Philip Linden: There WILL be lindenland same as before.
Jeska Linden: Dnate Mars: Since the new mainland will only be sold for USD, how will Linden Labs control inflation of the L$?
Philip Linden: The amount that we get in L$ for land is very small compared to stipends and the overall money supply.
Philip Linden: So I think it will have little effect.
Philip Linden: MTD in June there is only about L$1M in land auction sales.
Philip Linden: The money supply is close to L$300M.
Philip Linden: Noone in SL controls more than 1/2 the land by a LONG shot.
Jeska Linden: Jeri Zuma: Can we bid with Linden dollars?
Philip Linden: Again... we were selling so little land at auction for L$ that is seems simpler to eliminate it.
Jeska Linden: Please submit questions to me, they won't be answered if you shout them out.
Jeska Linden: Iyeyasu Muromachi: two questions, is the price quoted L$ or USD, and how dose that wourk out for someone who only wants a quarter sim lets asay?
Philip Linden: We may make some smaller parcels, if we can, and prices will be in $US.
Jeska Linden: Trader1 Whiplash: What do you see as the impact on Privately Held Lands? paticularly large Tracts?
Philip Linden: I doubt there will be much impact, since I don't expect mainland prices to change.
Philip Linden: As I explained, the minimum will be roughly equal to the current closing price,
Philip Linden: so there is likely to be little change in price.
Jeska Linden: Newfie Pendragon: Will there be any controls or steps taken to prevent the sale of land from degenerating into a monopoly/near-monopoly controlled environment?
Philip Linden: As it stands today, there isn't any monopoly I can see....
Philip Linden: the few folks who are buying and reselling land aren't holding it,
Philip Linden: and unless I am missing something there is no barrier to competition.
Philip Linden: Anyone can compete with them.
Philip Linden: And many new people certainly are.
Philip Linden: This isn't like rockefeller or standard oil,
Philip Linden: as amusing as that may seem to think...
Philip Linden: SL doesn't allow barrier against competition to be erected.
Philip Linden: At least not that I see.
Jeska Linden: Cristiano Midnight: Are there any plans to reduce or restructure the tier fees? They have been the same for a year and a half, with no increase in prims, etc..
Philip Linden: I'd like to see the tier prices be simpler...
Philip Linden: maybe just a flat price per meter.
Philip Linden: But that is REALLY hard coding work.
Philip Linden: So I am more into fixing bugs.
Philip Linden: But yes I think long term that is the way to go... simpler flatter billing.
Philip Linden: Also I think the discount levels at the large sizes are too high.
Philip Linden: There has been lots of good discussion of that in forums, etc.
Jeska Linden: Lordfly Digeridoo: Just to clarify... where are First Land plots going to be at? In Sims by themselves, or still liberally sprinkled about the virtual landscape?
Philip Linden: both... some in their own sims, some scattered.
Jeska Linden: Prokofy Neva: Why are you making a decision like this which will likely impact the land market considerably without discussing it first with residents particularly land dealers?
Philip Linden: comic relief ;)
Philip Linden: The pricing increase on islands wasn't something really worth discussing,
Philip Linden: because it is just a cost issue.
Philip Linden: We need to cover costs.
Philip Linden: If that means people buy less islands, I'm OK with that.
Philip Linden: We've gotta run the business so that we can afford to write new code.
Philip Linden: As to the mainland auction stuff,
Philip Linden: we have had lots of discussions and listened and thought about that lots.
Philip Linden: I think the community is well represented in the direction.
Philip Linden: I guess if everyone hates the idea, we'll change it.
Philip Linden: But I don't get that from feedback so far.
Jeska Linden: Beugul Burleigh: will basic users be able to buy land sometime in the near future?
Philip Linden: I assume you mean a $4.95/month price for just a tiny plot of land or something?
Philip Linden: We can think about that.... I don't feel like it would be much in demand.
Jeska Linden: Nathan Stewart: does ll have any intention of providing more steps in the land tiers, like 6k, 12, 24k, 48k etc this could encourage people to buy slightly larger pieces of land who couldnt afford the next big step up...
Philip Linden: As I said I'd like to see a simpler tier system...
Jeska Linden: ..As we've seen with spittonie closing down the cost of private islands for leasure is just not feasable, especialy now with the increased cost, is there any plants to provide a cheaper private sim in exchange for reduced/no dwell and also it being pg
Philip Linden: I'd be more in favor of a totally smooth per meter system than more tiers.
Jeska Linden: Schwanson Schlegel: Is there going to be a replacement $L sink for the auctions that were for $L ?
Philip Linden: No plans for a cheaper sim, no.
Jeska Linden: Pituca Chang: Will there still be PG sims in the future?
Philip Linden: If we see problems with the economy, we will add sinks or reduce sources.
Philip Linden: Yes there will be PG sims.
Jeska Linden: Anshe Chung: What is the purpose of auctions if there is unlimited supply of land?
Philip Linden: auctions allow fair resolution when two people want land in the same place.
Philip Linden: Like imagine you want to buy the sim just north of you or something.
Philip Linden: How do we decide who gets it? Auction is a fair way.
Jeska Linden: Lex Neva: If I understand you right, you're setting the new auction start price to the old average close price. Won't this mean that the new close prices will only go higher, raising land prices for everyone?
Philip Linden: We will put on more land, so that will probably counter higher close prices.
Philip Linden: Again.... let me say that guessing at demand (as we've been doing)
Philip Linden: and rationing off a set of sims is I think really dumb.
Philip Linden: we can't estimate demand simply from new users,
Philip Linden: so prices move around way too much.
Philip Linden: This way there will always be land to buy at the minimum.
Philip Linden: So the demand will drive pricing rather than our supply.
Philip Linden: Well I don't have 10,000 sims just yet.
Philip Linden: But we'll keep enough online and accessible so that
Philip Linden: there are always sims with no bids on them.
Jeska Linden: Cutter Rubio: Was the intent of the $1250 estate price to drive people to the mainland. It seems that since mainland land can be resold, and they go around $1K, they are a better deal than estates now.
Philip Linden: Mainland versus islands should be a balanced choice I think.
Jeska Linden: Satchmo Prototype: Does this allow LL to fill the void (dead spots between sims) and start building a much larger world in general?
Philip Linden: we are filling voids with older machines when we can.
Philip Linden: no changes there.
Jeska Linden: KZ Pasteur: Q: Even if there's enough land for anyone who wants to buy to afford it, it's still $1000. Will SL improve agreement/contract tools, so that the risk is lowered when joining groups to buy land?
Philip Linden: yes we want to improve group mechanisms for owning land.... agree they are bad.
Jeska Linden: WoccaWocca Kuhr: Could you provide a reason why you think that selling mainland plots by the sim instead of in smaller peices is good for the community as a whole and not exclusively beneficial to large land resellers?
Philip Linden: I think that selling mainland sims is simply easier in larger pieces...
Philip Linden: if you all really want us to spend content team on small parcels,
Philip Linden: we can.
Philip Linden: But as I said it effects almost noone, from the statistics.
Jeska Linden: Ghoti Nyak: I see more of an opportunity for sniping. Now everyone who wants a sim on mainland can go looking for the 'cool sims' only to have a flag go up, and the land barons decend in the auctions.
Philip Linden: I'm not seeing how that will increase sniping.
Philip Linden: If anything the purchase time can be more driven by you,
Philip Linden: meaning that I guess you could wait until what you thought was a better time to make an initial offer and start the auction.
Jeska Linden: Adam Zaius: Question: Are there still plans for LL to allow people to 'host their own sims' in the long term?
Philip Linden: I think someone mentioned this earlier...
Philip Linden: and it fits into Adam's question...
Philip Linden: in the longer term we probably don't affect things much...
Philip Linden: I think it is likely the sims will be deployed by you guys more directly.
Philip Linden: We can't continue the rate of growth we are by running all the servers.
Philip Linden: SL will be more like the internet long term,
Philip Linden: and LL will probably server as a kind of central host/coordinator.
Jeska Linden: Josh Panther: What new Features -if any are expected to be added to private Estates?
Philip Linden: There isn't anything specific in the 1.7 plan for estates, off the top of my head.
Jeska Linden: ngel Cinquetti: To revisit an earlier question just a bit. The application for an island page already has price set to $1250. Does this mean as long As you Apply before July 15th ? Or is it going to be based on the SEt up date ?
Philip Linden: I'm not sure... check the page for updates.
Philip Linden: Current price is good for orders through the 14th.
Philip Linden: New price will be on orders after the 15th.
Philip Linden: Sorry for the confusion on that.
Jeska Linden: Cutter Rubio: Can you elaborate on how islands are more expensive to setup and maintain? Other than initial setup and upgrades, which all sims have, what does LL do to estates to justify the cost?
Philip Linden: Mostly time logging in and setting land, filling out estate info,
Philip Linden: and the fact that they are effectively 'on order' so sometimes they trigger a new sim order, etc.
Jeska Linden: Shjak Monde: In the Future will there be a way to sale not only the Land but the Improvements placed on that Land?
Philip Linden: You can already sell objects on land, as of this version. Right?
Jeska Linden: Khamon Fate: Is LL going to impose stricter penalties on people who bid for land then don't purchase it?
Philip Linden: Khamon I don't know. Email me if you want a better answer to that one. I will check.
Jeska Linden: Frans Charming: will it be known at forehand if the sim is a telehub sim?
Philip Linden: Yes we will try to put the hubs in first like we do now.
Jeska Linden: Ariel Dayton: that could have the effect over time of narrowing the profit margin on the redistribution of land to a point where no one will want to be bothered, sl planning to go public anytime soon?
Philip Linden: we will always be careful about not talking about land plans except to all, I agree.
Philip Linden: Profit margins on land sales are small now,
Philip Linden: but there is also not so much competition yet.
Philip Linden: I suspect that land will be developed in more and more interesting ways for resale.
Jeska Linden: Ms Kitty: Are they going to keep the 10% bonus on group tier?
Philip Linden: right now the bonus is staying.
Philip Linden: I don't think it does exactly what it is supposed to,
Philip Linden: but in principle it is great to have an incentive to work on group projects.
Philip Linden: so no changes right now.
Jeska Linden: Doc Nielsen: What will happen to released land (this has not yet been discussed)?
Philip Linden: as before released land will go to auction or first land.
Jeska Linden: Doc Nielsen: What will happen to released land (this has not yet been discussed)?
Philip Linden: I've gotta go in a couple minutes.
Jeska Linden: sorry
Jeska Linden: LordJason Kiesler: Is there a chance that we will ever be able to order custom hardware, For example lets say someone wants the power of 2 sims in one?
Philip Linden: two more questions.
Philip Linden: we are working on that... faster hardware.
Philip Linden: The trick is to do it in a way that is scalable,
Philip Linden: so that we can order the right number of servers of different speeds, etc.
Jeska Linden: Tiger Crossing: Any plans for multi-sim auctions? Say, a block of four around a new volcano? :)
Philip Linden: I'd like there to be multi-sim auctions,
Philip Linden: and we are going to work on that.
Philip Linden: But not yet because we need to write some code for it.
Philip Linden: OK all.
Philip Linden: I will log back in later on tonight.
Philip Linden: Probably at about 7:30SLT.
Philip Linden: And I'll be able to talk now.
Philip Linden: talk more then, I mean.
Philip Linden: so if anyone wants to come by then... I'll start here.
Philip Linden: thanks for coming.
Philip Linden: And please send me email with more thoughts....
Philip Linden: Thanks!
Jeska Linden: Thanks for coming out everyone, if we didn't have time for your question, please feel free to post it in the Hotline to Linden in the forums -- the transcript from this Town Hall will be posted in the forums shortly.

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