Very interesting and exciting news from Linden Lab.

Island setup fee will be reduced from US$1695 to US$1000, excluding VAT on 16/17th Apr 2008. Island monthly maintenance fee will still remain at US$295.

Openspace will be reduced from US$415 to US$250. Openspace monthly maintenance fee will still remain at US$75. Openspace is 65536 sqm, as big as Island, but has only 3750 prims.

Why did they reduce price? I believe they want to stimulate the economy to grow faster (European player will be back since $1000+VAT is less than US$1695) and to ward off any competitor so that they have bigger market share in the virtual world. Why do you think web hosting companies has ZERO setup fee? It’s because of too much competition. Well, may be we will see ZERO setup fee in the future.

Why not reduce monthly maintenance fee? Setup fee is one time cost, maintenance fee is recurring. Since they increase the maintenance fee from US$195 to US$295, it would make them look stupid if they choose to reduce maintenance fee instead of setup fee.

What do you think?

As promised in yesterdays post, here are the fine details for the price reduction and how this affects those that have purchased recently. Before getting into that, I’m going to repeat my final comment on that previous post.

Several have asked if this is in some sort of panic move in response to poor sales. This is absolutely not the case, in fact sales of islands have been very consistent through Q1; we sell between 100-110 islands per week plus a fair number of Openspace regions.

Technology and service costs vary over time and we as a business have to respond to that in sensible ways. In addition, we have to continually assess our business model and make changes where we need to. By and large we have worked hard to keep prices static for long periods, and when we have had cause to increase prices in the past, we allowed grandfathered monthly fees to continue because we value the time and energy those people had put in. Nearly 18 months on and that grandfathered pricing is still in place for many island owners.

This was the right time to reduce the setup price of an island. As any business would, we will review the effects of these changes over the next period and make adjustments or leave them unchanged according to how it goes. If we are able to make savings, then we feel that passing those on to our customers is a good thing.

We believe we are on course for an April 16th/17th launch of the new Land Store, so that will be the day that the price change goes live. If for some reason we have to push that back a week, then the new island prices will move back too. Regardless of what happens with the Island price change, the Mainland auction start price will drop on April 16th.

When the new Land Store launches, setup fees will be:

  • Normal Islands: USD$1000 setup
  • Normal Openspaces: USD$250 setup
  • Educational Islands: USD$700 setup
  • Educational Openspaces: USD$175 setup

These prices exclude VAT.

The monthly maintenance fees for Q2 will not change from their current levels.

For anyone that has bought a normal island in the seven days prior to Mondays announcement, including any awaiting delivery now (so any orders placed in April PST), you will be offered a choice between:

  • Your order cancelled with a complete refund of the amount paid, allowing you to re-order when the price drops if you wish to, or:
  • Keep your order and get a free Openspace region with it. The Openspace would have no setup fee and no monthly fees for a period of 6 months after which normal monthly fees will apply.

For those that purchased a normal island between 11th and 31st March 2008 you will be offered a free Openspace, with no setup fee and no monthly fee for a period of 3 months after which normal monthly fees will apply.

If you have had an Openspace region delivered on the 1st April 2008 or later, you may cancel that order for a full refund.

If any of the above offers affect you, please let us know your preferred option before 16th April by contacting the Concierge team.

An further FAQ article will be added to the Knowledge Base shortly.

If you’re a prospective or existing island owner and have any questions or concerns, please direct them to the Concierge team via the support portal.

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