Further Thoughts on Desperation Isle Estates

UPDATE (12/14/2010): We have found the remaining sims a new home!

I’ve been very quiet the past couple of weeks, but now that I’ve personally contacted all affected residents and vendors (and now that it’s actually sort of made the news), I just wanted to officially confirm and explain what’s going on with Desperation Isle Estates.

We are indeed shutting down our public meeting place and mall, New Desperation Isle, and we are exiting the business of managing multi-tenant residential sims. The detailed announcement I delivered to our residents is viewable on our estate blog. I don’t want to repeat what I’ve already said on the blog, but I did want to discuss a few specific things related to the decisions we made, and on Second Life as a whole.

Linden Lab’s Role

I tried to be very careful in constructing my official announcements, because I didn’t want to sound like I was saying, “Boo hoo, Linden Lab made it too hard for me to make money.” Success anywhere (in Second Life or the real one) means work, both to achieve and maintain. Linden Lab did in fact make quite a number of decisions that affected our mall, skybox store, and estate business, but those changes weren’t individual killing blows- they were just speed bumps that would require a lot more time, effort, and money than we’re willing to invest right now to overcome. A number of judgments Linden Lab has made, I might have done myself if I were in their position.

The only policy change Linden Lab made that I absolutely disagree with was the granting of reduced monthly tier to a small number of the very largest estates on the grid. Anyone who doesn’t see this decision as an openly hostile move against all new or small/medium estates on the grid is at risk of Kool-aid-induced diabetes. It is not the same as offering bulk discounts on new sim purchases (it cannot be compared to the Wal-Mart or Best Buy model), and doesn’t make business sense in the short term. Linden Lab realized they were leaving money on the table by allowing grandfathered tier to carry across sim transfers- and they fixed that- but then they secretly blessed a few favored estates with lower maintenance costs even though they would have sold just as many sims had they kept the original tier for themselves. Linden Lab is subsidising the estates who get these breaks and leaving the rest to fend for themselves (apparently most Atlas participants don’t even get this discount). And even this move makes sense in a very clinical, calculating way. I’ve discussed my theories about why I think they’ve done this extensively in other threads, and I believe Linden Lab’s own actions and statements throughout the past year have corroborated my beliefs.

We recently sold two of our islands, with residents, to a fellow estate for almost no money. I wanted to move these two specific sims because each one had a tenant with builds that occupied nearly a fourth of the island that I just couldn’t bear to see go up in smoke. I did try to find homes for all of the other sims- even offering them for free to anyone who promised to take care of the builds and tenants, but anyone looking for islands right now wants unpopulated “blanks” that they can parcel and shape to their desire. I will be deleting the remaining six sims when the time comes. This will be my $21,240USD-a-year protest against Linden Lab’s secret tier breaks. They won’t get the (full price!) tier from my sims anymore.

Anyway, the tier breaks alone were hardly enough to push us out of the multi-tenant sim business. I’ll address that more in a moment.

Success in Second Life is Still an Option

Even though we’ve chosen to leave this particular part of the land market, I still believe it’s possible to run a viable, successful business there. It’s just a lot more work now than it was in the past- and you have to fight on all fronts.

• If you compete on price alone, you will fail. Someone will always be able to underbid you, whether they have grandfathered tier, sweetheart discounts, or they’re just that hungry.
• If you compete on search placement or classifieds alone, you will fail. Everyone wants top placement and only the person who works hardest (perhaps employing shady means) will get there.
• If you compete on marketing alone, you will fail. You can slap banner ads on every SL-related site on the Internet and someone else will be doing that AND optimizing their Google placement AND taking advantage of pricey Linden Lab marketing opportunities, and who knows what else.
• If you compete on customer service alone, you will fail. Someone is always going to be better-staffed and in-world more than you are.
• If you compete on theme or uniqueness alone, you will fail. There is definite value in having a “themed estate.” It worked for us, and has worked for many of our peers. But if you are successful in your niche, you can and will be copied.
• If you compete on name recognition or “SLebrity” status alone, you will fail. The cachet that comes with notability is limited; you deliver a poor service or experience and that tarnishes your brand. You only have fifteen minutes; use them wisely.

If you compete competently in most or all of the above areas you will succeed. If you fail in any of these areas (except for maybe the last one?) you’d better count your blessings that you’re still in business at all.

Game Over

I used to enjoy all of the challenges I just detailed above. I call Second Life a game, and THAT was my game. I obsessed over my placement on the PMLF chart (and was bummed when they removed the economic stats page) and relished my “Business Owner Level 2” LindEx trading status. I actually developed a passion for real-life Economics as a result of analyzing and discussing the fluctuation of the L$ with fellow forumgoers and now daydream about having a chance to do college over again to study it.

But it’s time for me to get off the competitive SL treadmill and onto a real one. (I’ve gained an embarrassing amount of weight ever since Second Life usurped Exercise in my evening activities five years ago.) I love Second Life for what it once was and what it yet can be. I love it for the people I’ve met and the experiences I’ve had. I may have a grudge over the tier breaks thing, but I could never hate the company who helped me meet so many great people.

The Future of Desperation Isle Estates

For anyone wondering whether our continuing single-tenant sim business might turn out to be as ephemeral as our multi-tenant business, you just need to understand how different those businesses really are. If I lose a customer on a single tenant sim and can’t rent the sim before tier is due, I can delete the island from the grid without affecting anyone but me and The Lab. It’s not like a full-prim, full-tier sim with 20 parcels on it, where you start hemorrhaging money if the sim is any less than 70-80% full.

Also, the amount of work required to keep my customers happy is significantly reduced. A single-tenant sim customer never has to complain that their neighbor has banlines or that someones new rabbit farm is lagging the entire sim. They also have more control over the island and only ever contact me if they’re moving out or if one of Linden Lab’s egregiously frequent maintenance restarts results in a sim boot hang. We can basically maintain this business indefinitely, for as long as we have customers and as long as Linden Lab doesn’t raise our rent beyond what those customers can afford.

Connections

Over the past few days, I have received so many beautiful notecards and IMs from customers and friends, thanking me for giving them a place to live and play and sell. I’ve told a couple of people already that as the stress of maintaining the businesses mounted in the past couple of years, I grew to see myself as just “the landlord” and had kind of become oblivious to all the wonderful times people were having in this community that I built. I will never regret what we had there. I only wish that each day were a few hours longer so I could have the time necessary to keep our little village viable in the years to come. I will miss it, and I will miss the people who called it home. The one bright spot in all of this is that from now on, when I log onto Second Life more often than not it’s going to be for pleasure, not work.

Island Moves and Profile Picks

Considering how congested the grid has become, it's no wonder that some estate owners choose to take advantage of Linden Lab's undocumented policy of moving entire estates for free if they are surrounded by other islands or reservations in such a way that expansion is impossible. Unfortunately, while you may not be paying $150 USD per island to relocate your estate if you choose to do this, the move does come at a cost: After the move, any profile picks entries that residents may have had to parcels on your islands will be invalidated- to an extent. What follows is a summary of exactly what breaks and what doesn't, and the potential impact on any businesses that might be located on your islands.

Two Kinds of Profiles
First off, you must understand that at this time, Second Life maintains two profiles for every resident. There is the old-style "Full Profile" that you see when you use Search > Places, and then the newer "HTML Profile" that's used when you use the Search > All feature or conduct Second Life searches from the web. (Here is the HTML profile for the famous builder, Light Waves.)

HTML Profiles only contain information from the 2nd Life and Picks tabs of the Full Profile, and are indexed by Linden Lab's search appliances and factored into search rankings in Search > All and web-based searches. Full Profiles contain a lot more information and changes in them are reflected immediately in Search > People results, whereas it can sometimes take days before the changes are reflected in Search > All.

To business owners, the primary effect of HTML profiles is that any Picks entries that payment-info-on-file residents have to their businesses help boost their rankings in Search > All results, even more than Traffic.

I should also note that in a similar manner to resident profiles, places in Second Life have two listings: The Search > Places listing and the HTML listing. The HTML listing works just the same for places as the HTML profile does for residents.

What Breaks
You will see different results, depending on which search method you use to look at someone's profile:

• If you use Search > Places to view a person's profile and look at their Picks tab, the picks to moved locations that were created before the island move will appear to be intact (they won't say "no parcel" like stale picks often do), however when you attempt to teleport to them, you'll be greeted with the following error: "Could not teleport. Unable to find teleport destination. The destination may be temporarily unavailable or no longer exists. Please try again in a few minutes."
• If you use Search > All to find the person's profile, and instead of clicking the picks link on the HTML page, you click View Full Profile and look the the Picks tab, you will have the same problem.

What Still Works

• If you use Search > All to find the person's profile, and you click the picks link on the HTML page, you will actually be taken to the HTML listing for the place in question. You will successfully be able to teleport from the HTML listing.
• Search rankings are not immediately affected. The island move does not cause Second Life to generate a new HTML listing for parcels on the moved island. As evidence of this, see the following:
  
  The roleplaying location, Space Colony Necronom VI is located on an estate which was recently relocated. Here is the HTML Picks link from a resident's profile that was created before the island move:
  
  http://world.secondlife.com/place/7e3ae773-065e-3ddc-6026-9eee462eb4ea
  
  And here is the link from another resident who added the place to her Picks after the move:
  
  http://world.secondlife.com/place/7e3ae773-065e-3ddc-6026-9eee462eb4ea
  
  The links are identical, and take you to the same page. This means that Search > All is oblivious to island moves, which is a good thing.
  

What This Means to Businesses
Profile Picks can influence your business in a number of ways, some more subtle than others:

• Your search rankings will not immediately be affected. You will have some time to get some new residents to update their Picks before the change begins to make an effect on Search > All results. (Picks do not factor into Search > Places results.)
• Residents who use Search > All exclusively will not see a difference. If you stick to the HTML profiles when browsing people's picks, you won't even know that anything changed.
• Residents who use Search > People or who click View Full Profile from an HTML Profile might think that your business no longer exists. The misleading wording of the error message they get if they attempt to follow a pick to your place could prompt some folks to go elsewhere. Remember that Picks are a great, free "soft advertising" campaign. People might discover your business through other folks' picks, and may not have ever heard about it otherwise.
  
• Residents who discover their own picks are broken will likely remove the malfunctioning pick from their profile, but might forget to add a new one after the move. This may have a gradual negative impact on your Search > All rankings if no one new adds picks to your place.

Advice for Estate Owners
While the effect of island moves on profile picks is mitigated by the fact that HTML profiles still work, it can affect traffic at the businesses on your islands, and the effects might be slow and gradual as residents weed out broken links from their profiles. If other businesses rent land on your islands, you should warn them about the consequences so they can notify their info groups and friends to update their profiles after the move.

I have been in contact with Linden Lab about this topic, and it sounds like they will be documenting this problem as a known side-effect of an island move- but don't expect a fix any time soon.

The Reservation System: Then and Now

In September of last year, Linden Lab discontinued the ability for residents to order island "reservations." Until that time, it was possible for people who planned to buy an island in the future but weren't ready to do it right away to reserve a spot on the grid for 90 days for a (usually) low fee. The reservation program was at times controversial, because some residents used it for extortion, intentionally bidding on reservations that surrounded existing estates, thereby blocking the estate's expansion until the estate owner paid the reservation holder to sell the reservation. Many of us assumed that when the reservation program ended, all those thousands of reservations currently cluttering up the grid would finally expire, alleviating the expansion headaches of established estate owners.

Unfortunately, six months after the reservation program ended (and three months after all those existing reservations should have expired), this is what you see when you look in the Land Store today (hint: yellow = reserved):

Considering that the Land Store map is grossly out-of-date (it only shows three of my 12 islands, and one of them is in its old location), some of us assumed that maybe all that yellow was just vestiges of long-expired reservations- but we were wrong. Residents are still being extorted by reservation holders, and new sim orders are still being denied due to existing reservations.

It's important to note that a single reserved spot on the grid effectively blocks expansion into any of the cells immediately surrounding it, both adjacent and diagonal, so all those thousands of yellow cells on the grid are actually preventing expansion into many more thousands of cells than it would appear just by glancing on the map.


So what's going on?
Well, despite the fact that all mention of reservations has been wiped from the Second Life Knowledge Base, the reservations program is still alive and well (and making Linden Lab a lot of money). I spoke with someone on the Concierge team today and learned that some of the reservations that show up on the map are indeed expired, and will not be honored if an estate owner wishes to expand in their direction. However, the majority of reservations still registered in the Land Store are actively being maintained by paying residents. You see, once you have a reservation, it's yours as long as you keep renewing your reservation fee every three months. The existing (valid) reservations will only expire once the holder decides to let the "subscription" lapse.

What can estate owners do about it?
First off, if you are an estate owner and someone who owns a reservation near you offers to sell the reservation to you, don't feel compelled to take the offer unless you consider it reasonable. If they're offering the reservation at extortion-level prices, you should Abuse Report the individual and include any IMs or other correspondence with the person in your report. It's one thing to decide you no longer want to keep the reservation and offer to give it up, but another to use it to intentionally extract cash out of established residents.

If you wish to expand and there are reservation slots or built islands that might block your way (remember, reservations block diagonals now, too), contact Concierge or add a note to your support ticket about the reservation in question and ask them to confirm whether it's still valid. They will allow you to expand if the reservation holder's no longer paying for it.

If you determine that all the reservations surrounding you are, in fact, active and valid, you have the option of moving your entire estate- and lucky for you, if your estate is surrounded in such a way that expansion is impossible, Linden Lab will waive the $150 USD per-island move fee and relocate your entire estate somewhere that you'll have more breathing room for free. It's not documented in the Knowledge Base, but it's true, and has been done several times already. The $150 fee is not so much a profit center as it is a disincentive to moving islands around arbitrarily. They want to limit the amount of busywork they have to do on island moves, so they charge a fee to ensure you only move your islands when you really need to. It would be silly for them to charge $150 per island to a resident with 10 islands (who's paying Linden Lab as much as $35,400 a year on island fees), because if that resident simply decided "well, I don't want to pay $1,500 to move, so I guess I just won't buy any more islands," that would hurt Linden Lab in the long run.

So, next time you're in the Land Store and groaning over how hard it is to find anyplace to plant an island, know that you're not completely out of options.