How many mainland residents does it take to equal one estate? #Second Life

“I’ve seen it written many times by residents of Second Life that estates are the land-profit center for Linden Lab, and the loss of estates while mainland is growing is a bad thing for the health of the grid. I’m not convinced. But I am open to seeing numbers that show me where I am missing the point. Here is how I see it: Volume is what is key. Better to have a lot of low paying customers than one higher paying one.”

Todays #FF blog is Pussycat Catnap´s thoughts. Pussycat is a highly intelligent person that has impressed me a lot in the SL forums. At least the Mainland forum as that´s the only one I follow. Her blog is a treasury, packed with invaluable information about virtual worlds. The last posting I read was extremely interesting. The subject is Mainland vs Private islands:

Mainland or private island? Premium accounts vs freebie accounts?  “How many mainland residents does it take to equal one estate?” I read about this first time in a blogpost from Iliveisl with a comment by Pussycat Catnap. So I went to her blog to read more. This is brilliant so don´t miss this: Mainland versus Estate

Im sure Second Life is capable of a promising future. It will just have to adapt and evolve. Times are changing and they who can´t change with it will cease to exist. I hope Second Life will make it.

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6 Comments to “How many mainland residents does it take to equal one estate? #Second Life”

  1. here’s my perspective about the private sims aspect. everyone knows i had 19 sims inSL

    a full sim is $1000 USD to Linden Lab and then, starting the second month, it’s $295 a month – so you could also say it’s $705 set up fee plus $295 a month

    one sim is one core and one gig of RAM (plus access to several other servers for inventory, chat, maps, music, etc)

    i now have an OpenSim server and it is 4 cores and 8 gigs of RAM and that costs $159 a month with no set up fee

    let’s say that the 4 cores and 8 gigs are close to what you’d have if you had four full sl sims

    my server comes with OpenSim support and an SL sim does too

    Linden Lab is way bigger than my host so i assume they get a deeper discount on servers – i know for sure they don’t pay $159 a month for a server

    so . . . on sim on my box would cost me about $40 a month right? plus i have support

    right off the bat, LL makes $705 – not bad for a few minutes worth of work (it took my guy like an hour to set up my OpenSim box for 16 regions)

    so we have $295 a month versus $40 a month and that’s assuming LL pays the same fro a server as my guy does – i bet they pay close to half!

    now LL has a great office building (i’ve been there) in probably the most desirable place in San Fran and they have to pay for that building whereas my guy does this from home

    even so, LL clears at least $250 per month per private estate plus that initial $705

    if my guy can make a living with a tiny user base, i mean really tiny, then LL certainly can too

    even if you think my example is out of my butt (and it is) and you cut down the $250 profit to $125, that’s some good money of of one person because it’s only one person that owns a private sim

    there’s a lot less of a headache to collect my $295 from my automatic Amex payment than from 14 people paying tiers at different times of the month

    and if i don’t pay, they shut my sim off. but if only 2 people pay on the mainland, they keep that server on

    what would you rather collect on? one guy giving you $3000 a month or 300 people giving you $10 a month? i agree that getting a dollar from a million people is easier to do than a million from one person, but logistically, it’s a lot easier to handle the one check than the million transactions!

    my two cents =)

  2. “Volume is what is key. Better to have a lot of low paying customers than one higher paying one.”

    it takes a lot more employees to deal with a zillion low paying people who all expect to have full 24 hour a day live chat support

    i guarantee that you Mera could take care of one person paying you $1000 a month easier than you could deal with 1000 paying you one dollar a month =)

  3. @Ener: quote: “right off the bat, LL makes $705 – not bad for a few minutes worth of work (it took my guy like an hour to set up my OpenSim box for 16 regions)”
    *giggles*! GOD! 1 hour? It took me almost 3 years! Gosh I just lost my techie reputation did I? :O) I started my struggle with connecting my own sim to another grid early 2009 and this year i (almost) succeded. Though I still suffer from major loopback :}

    Regarding LL and SL, of course they cant have either, only big or small customers. They need a healthy mix :) But they certainly need more ppl to sign up for premium and they cant depend on a few huge costumers, that´s too risky….

    *xxxxxxx* :))

  4. The support costs for those mainlanders is nearly nothing – almost all automated and they seem to only need a small handful of live chatters per several -thousand- mainlanders. But for the estate folks; they get phone numbers and other support. Much more expensive to support them, and handhold the relationship of dealing with them. The $1000 set up fee – within 2-3 months, a mainland sim pays past it. But its only a 1 time fee.

    As for the difficulties of supporting one high end customer versus 1000 low end. Walk into Tiffany’s or Christy’s auction house, and consider their overhead per customer. Then walk into 7-eleven and consider theirs.
    – If you still think it costs more for 7-eleven to manage its customers… I dunno, you’re not on the same planet as me. :)

    There’s still a different problem in my original logic vis-a-vis the stipend, but I’m coming around to seeing a potential reason why that might not be a factor, and preparing thoughts on a part 2 or update.

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