Sunday, January 08, 2006

A Modest Proposal for the Future of SL Land Development

In the light of Robins announcement of wholesale auctions of 10, 20 and 40 sims in bulk, starting next Monday I just could not help thinking about some endpoint - or at least "next step" - in this development. How could the future roles of Linden Lab and residents look like in the creation process of Second Life?

It is becoming clearer and clearer, that Linden Lab's resources (especially manpower) are strained to the max. The growth of Second Life as a world and the further development of Second Life results in just to many maintenance jobs and development projects for such a small company. The wholesale land auctions are just another sign of that. Linden Lab is simply not equipped with the resources to design, create and distribute new land at the rate Second Life growth needs it. And its not really their core competency either. So they are letting residents do the job, a working model which has proved rather successful in other areas in the past.

But this model (maybe its a bit early to talk about a model before the first testrun even started) still has some flaws or limitations:
  • The auction model - which is perfect for the current single sim auctions - is not really the best one here. Different Linden-prepared sims can currently fetch different prices at the auctions - because they are different and can be cut up and resold at different prices. A block of 40 fully terraformable sims is more or less amorph and the pricing should not be different in structure from private sims.
  • The timeframe open to land developers for implementing their concept for the new terrain (terraforming etc.) is very short. Even a large team will have a hard time realizing something "special" in just one week. 10, 20 or 40 sims is a large terrain.
  • The monetary incentive for groups of residents to put a huge effort in this new land is still relatively low. They can optimize it for a quick sale but the margins realized with each single sim will still be in a range that will barely justify putting more than a few hours work it - if you look at First Life salary levels.
Most important to me is the last point. I would love to see more creative developments for the mainland. And I am sure I will see them - among ugly results of that new process. But professional results will mean a lot of effort. And we are talking about some serious investments here. This is not "for fun" any more (or semi-"for fun" like Bedazzles projects) but can only be done for profit. And this means that - at least in the long run - every hour put into such a development project should yield a ROI similar to a First Life project. The more (possible) profit, the better the results in Second Life.

A "private continent" like this (of the Gigas Group) currently is hard to create and maintain on the mainland and hard to bill for, with added risks for developers and residents renting land her, on private islands.

So, why not give residents a larger piece of the cake - and an incentive for putting more work into making Second Life a much more attractive "place to be" - making the cake bigger this way? And that would not be too hard. LL would just have to extend the current operating model for private sims a bit and combine it with some features currently only working on the main land.

The Proposal:
In essence I would like to make it possible to transfer more "ownership rights" and a part of the revenue stream related to land to residents or groups:
  • Linden Lab sells - or auctions - large blocks of sims to residents or groups. I will call these (groups) of residents "land developers". After the land is in the hands of these developers, a "development time" begins.
  • The development time for sims is limited - but not to just one week. A max development time is OK but it should be somewhere in the range of two or three months at least. During the development time only members of a designated group have access to the land and only a reduced tier has to be paid. As soon as the land is opened up to the public or the first parcel is sold, development time ends (and full tier payments are due).
  • At the end of the development time the new area appears on the map either connect to the mainland or as a (large) island. Some projects will benefit from such a connection while other work better as an island. At that time parcels on these sims can be sold like any mainland parcel. A right click on the land and some mouse clicks should put any parcel in the land listings or in the hands of a buyer.A resident that buys such land owns it like he would own any parcel on the mainland currently.
But - and that's a very big "but":
  • The tier, that this resident pays for owning the land, goes to the original developer(s) - minus a small commission to Linden Lab for handling and bookkeeping!
  • In return, the developer(s) will have to pay a monthly fee to Linden Lab. This fee is comparable to the current rent you pay for a private island.
The profit for the developers would be the difference between that monthly rent and the tier payments from the residents owning parcels on this land. Assuming for example, that the rent for a whole im would still be 195$, the sim is cut into 16 plots of 4096, with tier payments of 25$ each, this difference would be 205$ a month (16 * 25$ - 195$).

But, of course, developers would have the option to change the monthly tier payments for land on "their" sims. They could make this land cheaper to own or more expensive than current mainland. Its a free market, or should be!

The result
Implementing this proposal would result more or less in a kind of franchise model, where residents or "resident corporations" develop and maintain parts of Second Life - and would get a chunk of LLs revenue stream. It would be a true win-win in my opinion:
  • Most of the effort involved with "creating new land" would be on the developers side. Linden Lab can focus on developing the platform and maintaining the grid.
  • The developer's ROI would be based on selling the land and in addition they would have a sustainable revenue stream from residents owning parcels on their land.
  • This would provide enough motivation to put much more effort into the development and creation of truly innovative landscapes and community concepts.
  • More variety would be available to residents looking for land.
  • Competition between groups of developers would lead to innovation and would ensure reasonable prices for buying and owning land.

Currently it is cheaper for residents to own land in a zoned residential community then to live on the mainland (Anshe's Pinewater sim depicted here). With "resident-developed" sims a premium price would be justifiable, if land here could be sold as easily as mainland, IMHO.

Some aspects of this proposal could be realized with the currently already practiced model of renting private sims. But selling/renting land currently is much too clumsy on non-mainland sims and involves a lot of risks on both sides (buyer/renter and seller/landlord). Combining some aspects of private sims with others of mainland sims would lead to much more streamlined processes and new opportunities for SL entrepreneurs.

Edit: I just saw the transcript of an inworld meeting, where Gwyneth Llewelyn reported some new new functionalites for inworld tools. If this came true it would be a perfect complement to the proposal outlined here.

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