Linden sees further drop in real estate prices
By Adam Reuters
SECOND LIFE, Feb 9 (Reuters) - Second Life real estate prices have climbed to undesirably high levels and land speculators could suffer when more land is created, Linden Lab Chief Financial Officer John Zdanowski said on Friday.
The average price of a square meter of land, which has risen from L$6.67 to L$12.30 in January, is “higher than I think anyone would like to see it,” he said.
After steep increases in November and December, real estate prices plunged late last month when Linden Lab abruptly added 40 new regions to the market — a day dubbed “Black Thursday” by some landowners who lost money due to the unexpected surge in supply.
“With a recent release of more than 40 regions of mainland, the addition of a new mainland continent and doubling of the daily release of new mainland regions I would hope that we will satisfy the seemingly insatiable demand and stabilize the mainland auction market to a more sustainable price,” he said in a blog post.
For Linden Lab to add more land it has to bring more computer servers online, a process that can take up to six weeks.
Month-to-date figures for February were not available but Zdanowski told Reuter in an interview via instant message that pricing has returned to normal as the company finally catches up to a two-month backlog following a surge in demand in November.
“When demand spiked beyond our supply, land buyers developed a technical innovation to get an advantage in the market … whether it was bots or people though, the land prices would have spiked because demand outstripped supply,” he added. “Unlike in the real world though, we can rapidly put up more land when we need to, so speculators should be a little careful.”
He declined to say whether Linden Lab was considering an outright ban on “landbots” used by speculators to automatically buy up land, often making it difficult for other residents to enter the real estate market.
“I think if there was enough supply, the impact of the land bots would be minimized. It’s like a lot of things in Second Life. Less regulation is better,” he said. “For the most part, I think the bot problem is fixed.”
The total land size of Second Life — the mainland plus 3932 islands — was 360.8 square kilometers at the end of January (compared with about 60 square km for the island of Manhattan in the real world). Linden Lab has announced it is also preparing to release another entire continent.
