First Land Server Math

Many people rightfully wonder where all the first land is. Why, if the Lindens promise first land for a subsidized cheap cost of only L$512, as part of the $9.95 US premium subscription, do they not make good on their promise? It's almost impossible to find land now, and only the most hardy searchers banding together in First Land search groups are able to be on the ready for the abandoned parcels and new parcels that go out.

There's several simple reasons for this:

1. Servers are in short supply, the Lindens do not have an endless, rapid, immediate sourcing of them such as to immediately put out first-land servers. I don't understand how this happens in the modern world, but it is not just server purchases; it's the storage and placement of them in facilities called colos where the issues of electricity, rental, etc. are also at stake.

2. LL is concerned, as many residents are, that first-land is increasingly being snapped up by people using scanners or land-bots or people making endless alts to farm new land. This is inevitably what happens in any socialist system when something is not valued at what the market (people with their real valuation) says it is valued at.

3. If LL has its hand on its scarce servers, they have 3 options: a) make a fixed price of a large amount of money and have higher tier b) make even more money, but gamble that sometimes they may not make as much and then have lower tier; c) give something away for free. They don't opt for c) as much as the socialists would like!

Let's say the Lindens get a batch of 50 servers. What will they do? What would YOU do if you have a BUSINESS TO RUN and had to cover your expenses of staff, rent on your office, etc. You might like to be a socialist hippie type and a friend to mankind, giving away your server space -- but who pays you to do that? Not even Pierre Omidyar, the maker of ebay who is a great philanthropist and has sunk a lot of his own money into SL and funds many RL causes -- but even he can't subsidize your entertainment for each month -- he doesn't pay your cable bill or your restaurant check, so his ability to go on paying your monthly fees in Second Life is limited, now that the early phase is over.

So what can these Lindens, desperate to cover costs and make a profit, do with their servers, once they obtain them from suppliers? Each server could be programmed one of three ways, let's say, and that is staff time that must also be factored in. Here are the options:

a) Sell that server to fill the constant private island orders that have 2-3 week wait now and many angry customers in the queue. These are customers paying $1695 US for an island, and $295 for tier each month, and simply put, they just constitute a voice LL is more likely to heed now than those asking for free handouts of land. They are the corporations, universities, and land barons. Lest anyone think it is "the land barons that hold back all the land," they might just as well re-direct their wrath at Linden Lab itself. It is LL that makes the political decision to put out a server for *this* and not *that*.

b) Sell that server on the auction, with an opening bid of $1000, where it will today garner bids of anywhere from $1500-$4000 depending on type, rating, location. Ever after, they collect $195 from one land baron, or, as he chops it up and sells it, eventually let's say $400 in monthly tier (16 residents times 4096 m2 parcels per sim, $25 monthly tier).

c) *Give away for free* that sim for NO US CASH PURCHASE, i.e. for $0.0. The 512 is part of the 65,536 m2 server that the Lindens *could have* gotten $1500-1695 and higher island tier of $295. The differential between the minimal $400 US in tier that the Lindens get off the newbie server that month; the $1696 plus $295 tier they get from islands; the $3400 and $195 tier they get from an auction is all we need to know here. Far from "harming their bottom line" when Lindens don't put out more free land for newbies, in fact the Lindens are *protecting their bottom line* -- and that's why it's happening.

So instead of making first land for YOU and letting you have it for a mere $512 in fake Lindens that are sunk and not cashed out, and then getting a mere $5 in tier from you, instead, they favour the other 2 types of servers. Yes, they put it out FOR FREE because the $512 that comes with the subscription price goes into what is called a "money sink," i.e. Linden dollars not recouped and exchanged for US dollars. The premium $9.95 is what any land owner pays, so any full sim owner is also paying the $9.95 on top of his $195 US tier for a full sim.

To be sure, if the Lindens can give away a sim, then collect let's say 120 x $5.00 (the portion of the $9.95 that goes toward monthly tier), they putatively have $600 per sim. But in fact, most sims don't say with 120 people on them; people sell the land for as much as $12,000, and move out. Those $12,000 then can be cashed out for about $44 US on the land market, so you see what is happening: Linden Lab is effectively handing everyone a free item that they can resell and get a cash grant of $44 US. It's just the kind of socialism that no system can survive -- it is simply too much of a drain on resources and labour.

4. Concerned about speculators and bots, not motivated to sell their servers for nothing, and needing the 70 percent coverage of their bottom line that the tier-payers' rent to LL constitutes each year, Lindens do not create first land. what they do is free up abandoned land to "first land" when it appears, which is fairly often.

5. It's not true there is "no land". There's just *no cheap land*. Anyone is free to take their first 512 free tier (tier is separate from land; what's confusing is that "512 m2" tier is both the credit you put on land and the land itself of 512 m2 you buy with that credit). Many people are buying first land for $8500 or more. They are all over SL, and polls indicate that many people also find first land legitimately as newbies and sell it.

It's likely given the problems plaguing this system, which plague all such socialist systems that lead to people not valuing property and feeling they can steal it, essentially, and exploit it, that the Lindens will end the program. Let's hope so!

It' s misleading to keep telling people they can get their 40 acres and a mule for free. They can't. They will have to pay for them. They have 512 in the $9.95 premium to start with -- they will have to give up one restaurant meal to buy their first land for $30 US or they will have to ditch premium and give up one latte and pay US $1.50 or more for a newbie rental.

Comments

[Khamon]

The First Land program was created when there was truly a scarcity of land for sale anywhere on the map and litte hope that a viable resident-resident land market was forthcoming in the near future.

We have a viable resident-resident land market now with buy and rental opportunities scattered all over the tiny grid that's about to be greatly expanded.

The propoganda *is* misleading and as unnecessary as continuing the First Land program. Like any government givaway program, it's doing more harm than good after having lived out it's usefulness.

As you say, most people who find SL can afford a few dollars a month and a one time ~$40 fee to "purchase" some land in either arena. Those that can't will simply have to be tourists.

Heed the advice LL: terminate First Land and clarify the website.

[Khamon]

Oh and you forgot to mention that catering to customers using server types 1 and 2 effectively "runs off" the little people expecting a handout. That may or may not be intentional; but it's an interesting aside.

[Prokofy Neva]

yes, it's terribly when they cynically -- or heedlessly -- drive people away by offering first land but not really offering the *land*. It's not quite a legally-determined "bait and switch" because they don't *say* you will find it.

When people conditioned to games come into a world, they do expect some kind of welcome package -- something a little more robust than the cherry bed in the library .

As we've seen, the Lindens are capable of dropping landmarks into every new account in a flash; they can drop resident-created skins in a flash -- they can drop pretty much anything they need.

I think they should get rid of the stale library and create the library as ad spaces, which it is now anyway for people like Nylon. Then let people who want to give freebies to newbies consciously buy ad space in their library -- and rotate it often. Like classifieds, this will be a great source of revenue for LL, and newbies will feel like they have something more fun than a dead parrot, a TV that doesn't work, and a beach ball stupidly put on all permissions so that it is easy prey to all griefers wishing to find a ready-made device for self-replication.

[Erbo Evans]

In RL, I work for a company that sells supercomputing clusters, similar to the arrays of servers that LL needs to run the Grid. So I can speak with a certain amount of authority on the problems of supplying servers in this quantity.

In order to ship a cluster to one of our customers, we have to order in all the parts for each server (chassis, motherboards, CPUs, RAM, disk drives, and so forth) from suppliers, assemble the servers here, run "burn-in" tests on them (and fix any that break down in the process, possibly requiring that we send the defective parts back to the suppliers and get new ones), install those servers in racks, along with network switches and any other required components, install OS images on them and whatever else the customer requires, test the completed clusters, and then ship them out, usually via FedEx. The process can take several weeks even if all goes well, and I can't imagine it would take that much less time for LL, even if they order servers without an OS image from a larger supplier than we are. (And even if they order "naked" servers, they'll still have to install the OS on them themselves. They'd have to install their sim-server code on each system, in any event.)

In terms of sheer space...a typical server rack is about the size of a refrigerator, and contains 42 "units" of space, each of which can hold one server. (Some of that space will be taken up by network switches and so forth, too, which means less space for actual servers.) At four sims per server, assuming dual-CPU dual-core servers, that's a theoretical maximum of 168 sims per rack; the actual number will be less because of the space required for other hardware. (And LL uses servers for other purposes besides sims, too...the asset server is one big cluster, from what I understand.) This will improve as LL is able to get servers with quad-core CPUs; Intel is shipping those now and AMD will be shipping them before the end of the year, but LL probably doesn't have any (or not many) yet. They don't have an infinite amount of space in their colocation facilities; that's probably one of the biggest resource constraints they face.

Getting power to all those servers is not a trivial proposition; even we have a tough time sometimes being able to power large clusters, or large quantities of clusters, simultaneously. (The necessary power-distribution hardware also takes up space in those racks.) Equally important, all those servers must be cooled; you need sufficient air-conditioning capacity to offset the heat thrown off by all those systems, or you'll start seeing servers fail prematurely. These factors can be dealt with, but that does require additional resources.

Small wonder that Philip himself is looking for a guru to help manage all of this...

[Mako Mabellon]

I think that either I'm missing something or your logic is wrong; the subsidised first land is very, very cheap, but it is not in any sense "free". Think about it like this: you pay Linden Labs $9.95 for tier and L$512, then exchange the L$512 for some first land. Therefore, you have effectively paid Linden Labs the portion of your US$ tier payment that is returned as L$ for the land.

Of course, that's not to say the current first land setup works; it probably doesn't. I *think* the actual profit people reselling First Land make is $9.95 (the monthly fee) less than you calculated, though - remember, tier is useless if you don't own any land, and if you put the money back into land, have you really made a profit in any meaningful sense?

[Desmond Shang]

It's interesting how we can do tight analyses on the forums, yet I rarely find that people typically function as 'smart' shoppers.

In particular, on the mainland. Almost everyone knows the story of someone who has, say, 4096m of tier, is using 3000m or so of it, and then sells off their property at huge loss to 'get out' - often due to a social situation.

Or even more commonly, land is kept, tier is paid for months and months, un-used but still being billed until the owner finally gets tired of World of Warcraft.

Yes, there is satisfaction in knowing that your world is waiting for you, but at an incredibly high cost. Easier to sell all your land, repurchase somewhere else and spend an hour setting your things back out.

So in that perspective, here's my point. For every sim full of mainland land owners, there is often far *more* than a sim being paid for. Many people are stuck in bad situations, such as having 6000m of their 8192m tier but no more land they want is available.

The Company sells not only land, but 'option for land'. It's a big business. Anyone who has unused tier, or reserved a grid square knows exactly what I'm talking about. I'm guessing they make an additional significant percentage (ten?) from this sort of thing, even taking into consideration the group land bonuses offered.

I personally imagine it as an invisble continent (90% transparent terrain sparkling over a starlit void sea) - a huge, fantastic place full of unsubstantiated dreams. Dozens upon dozens of sims, and fully funded, of course. I'm into it for 80 USD a month myself presently, via void reservations - I'd love to at least plant a small flag on that most intangible of shores.

[Prokofy Neva]

Desmond, this problem of unused land/tier is just as big as the land-for-sale problem. Their tier system makes for it, of course.

For example, I have like 8192 m2 of unused tier now. I could go out and buy something ridiculously expensive to "use it up," or I could carry it over yet another month. Why? Because it only costs me $24 US. Of course all these "onlies" add up for us and them.

But what's the alternative? Drop $450 US just to make use of the $24 payment? Or wait until an 8192 m2 can be found for less?

You can't shed unused tier once you've bought the bulk rate at $97.50 for the next half tier (not $125 on the first pass).

You could divide up among alts, but then you'll be paying more per square meter. I've done this sometimes -- it's a hassle as their due dates start falling differently.

[Allana Dion]

>"I think they should get rid of the stale library and create the library as ad spaces, which it is now anyway for people like Nylon. Then let people who want to give freebies to newbies consciously buy ad space in their library -- and rotate it often. Like classifieds, this will be a great source of revenue for LL, and newbies will feel like they have something more fun than a dead parrot, a TV that doesn't work, and a beach ball stupidly put on all permissions so that it is easy prey to all griefers wishing to find a ready-made device for self-replication."

I realize it's slightly off topic but this is actually a really good idea.

[Khamon Fate]

I agree with Allana, this is a very good idea.