I signed up for a Second Life account a few years ago, but I rarely used it. It really wasn’t that fun for me. Later, I learned that simply being in Second Life wasn’t the fun part; it was creating and building that was interesting. However, building anything lasting required a premium account ($9.95 per month), which “entitles” you to buy 512m2 of land via the in-world economy. So last December, I bought some land.
It was quite a steal, as far as in-world land goes. I paid L$8500 (approx. $34) for a 1536m2 plot at the edge of a sloping green hill region, overlooking a “protected” beach region. (Protected means nobody can actually buy the land, it simply remains empty.) The view was excellent. The seller had literally just put the land up for sale, and I had just happened to find it via the land sale search when he did. This is the sort of land that could easily go for double that.
I started working away, building objects and sometimes buying others. At first I just was doing random things with the land, but I later decided to build the Finnix Information Center. (More information about that is available in this Finnix blog post.)
At one point, the land immediately south of my land went up for sale, at L$10000 ($40) for 1024m2. I bought it, not knowing what I’d do with it, but it was still a good deal. I set it for sale at L$30000 ($120) in case anyone really, really wanted it, but in the meantime, I just used the area for various projects. But about 2 months later, someone bought it! I made a quick buck.
Keep those numbers in mind: L$30000 for 1024m2. That was fairly typical of the area. Just like in real life, in-world land is driven by mostly aesthetic factors. Is the area cluttered? Do the neighbors have big fences butting up against your property? Good neighborhood? What’s the terrain like? Grass or rocky? This area was one of the best areas you could get. It was on a small slope, and had an unobstructed easterly view of a protected region on the beach. The only way you could do better was to find land directly on the beach.
Well, one day, Linden Labs decided to un-protect that region and sell it off to developers. Literally overnight, a strip mall moved in next door and blocked my view of the beach. At this point, I had started losing interest in Second Life again, so having “just another plot of land” wasn’t worth me maintaining. As a great leader once said, “It’s been swell, but the swelling’s gone down.”
Eventually, I dismantled the Finnix Information Center. I wanted to sell the land, so I started looking at other land for sale in the area, and it was pretty dismal. I ended up selling 1024m2 of the 1536m2 directly to a neighbor (it filled in the square of her land, making it 4096m2) for L$4000 ($16). For the other 512m2, I put it up for L$2500.
It sat there for months.
I logged in tonight, saw that it had not been sold, and then thought, “Wait a minute. I’m paying $10 per month to try to sell this land for $10!” I went on land sale search, saw that the cheapest 512m2 plot was L$800, and set mine to L$786 ($3.14). It was sold within 3 minutes. By a guy who immediately put it up for sale for L$940 ($3.76).
So that’s it. I bought 1536m2 for L$8500 and sold it for L$4786. That’s pretty dismal, considering at its height, I sold the equivalent of 1536m2 for L$45000. Now, part of it is the economy, both real-life and in-world. I’ve noticed that items like clothing seem to sell for about the same types of prices they sold for a year ago, but the in-world land market seems to have collapsed. Here’s my working guess: That 1536m2 plot of land may only cost L$5000, which is $20 of your real-world money, but it then costs $18 per month in the form of land use fees. ($10 per month is basic premium access with 512m2 of land use rights, but everything above that amount of land costs extra monthly fees. An extra 1024m2 is an extra $8 per month.)
So it costs a decent chunk of change just to continue owning land. $18 may not have been much a year ago, but you may be tighter for money now. However, items like clothing don’t have to live anywhere. They’re either on you, or stored in your inventory. So you don’t need to own land to buy and use clothing, so you don’t need a premium membership. Therefore, the price of in-world clothing has remained pretty stable, while the price of land has crashed.
It’s funny how closely the in-world land market is mimicking the real-world housing market. Fly around Second Life and you’ll see a LOT of land available, most of it very cheap. But just like how I can’t buy a house in the real world now – even though I’d love to and it’s a buyer’s market – there’s not a lot of interest in in-world land ownership because of how much it cost to keep that land. And just like how there are many foreclosed homes in the real world, there is a lot of abandoned land in-world. Land is usually abandoned when a user stops paying for their account without first selling off their land. Eventually Linden Labs will take this land and sell it at auction, much like a real-world bank.
That’s Second Life economics on a macro scale. As for my personal situation, I blame the strip mall.
Anyway, I went into my account and set it back to the Free account type. I’m still playing with building in-world, but these days I’m on OSGrid. It’s a Second-Life compatible grid that uses OpenSimulator, and the land is free, since you’re running your own OpenSim server. Come on by! The region name is “Undef Lagoon” on OSGrid.