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November 1, 2006 4:00 AM PST

'Second Life' land prices get hefty hikes

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Among those who got the early word was Electric Sheep, the biggest third-party "Second Life" developer. Its clients include Major League Baseball, Nissan and Starwood Hotels.

For Electric Sheep and other developers, the advanced warning allowed them to give their own clients the most up-to-date information.

"Let's face it, they're a business, and they have to operate as a business."
--Alice McKeon, "Second Life" resident

"I think the primary reason they did it is that they know we're out proposing and negotiating large projects with 'Second Life,'" said Giff Constable, Electric Sheep's vice president of business development. "We had just had a situation where Linden Lab changed the policy and pricing for custom (avatar) names, and so we had to go to prospects and reset expectations. I would bet that was the primary reason why they notified us."

For its part, Linden Lab said it was chastened by community anger at the early warning to some developers.

"I was taken by surprise when the information leaked to some people who might have tried to take advantage of (it)," said Zdanowski. "Clearly, there is a delicate balance between soliciting feedback from our customers while also not giving them an information advantage--and we will be much more careful in how we approach this in the future."

Meanwhile, opinions appear mixed about how the price change will affect "Second Life" and its existing residents.

On the one hand, most "Second Life" users don't own islands and never will. So those users will not be directly affected. On the other hand, small business owners, or those who rent space on islands--there are many such businesses--may well experience a downside.

At least one "Second Life" landlord has seen enough to say goodbye to his business.

"I'm sure you can appreciate that (the price changes) will have a huge effect on the rental market," wrote Hiro Queso, an owner and landlord of a number of "Second Life" islands. "With great sadness, I hereby give you notice that I will no longer be offering rentals and all (islands) will be cleared" within a month.

Queso--a "Second Life" account name--went on to apologize to his clients for effectively evicting them.

Of course, there are other rental businesses in "Second Life." An owner of one of the busiest said she isn't sure how the price changes will affect her outfit.

Alice McKeon, who runs d'Alliez Island Rentals in "Second Life" and rents 39 islands along with partner Tony Beckett, said she was not surprised Linden Lab raised the price of islands, but thought the fee increase was unexpected.

"Naturally, we will have to (raise prices) to recoup our investment" on new islands, McKeon said. "We'll have to see what supply and demand is (for islands). We will not grow as fast as we have in the past."

She did say she bears Linden Lab no ill will for raising the prices.

"Let's face it, they're a business," McKeon said, "and they have to operate as a business. I'm in their ballpark and either I believe in them and I stay, or I don't believe in them and I leave. And I plan to stay."

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