Linden Lab to raise Xstreet fees, loses vendors, products
by Tateru Nino 
Nov 20th 2009 at 5:00PM
Filed under: Business models, Culture, Economy, News items, Opinion, Second Life, Virtual worlds
This week, Linden Lab announced that it was going to start charging listing fees and minimum commissions on its Second Life Xstreet Web-shopping adjunct in the near future. Within hours, vendors took down thousands of products, many abandoning the service entirely in favor of alternative services.
It's unclear just how many vendors have abandoned the Xstreet SL system, but it apparently was enough to temporarily overload the Web-sites of third-party sites such as Slapt.
Linden Lab indicates that the move was espoused by vendors and customers during three Commerce office hours sessions, which is interesting, because from going through the transcripts, the discussions give the appearance that the changes to Xstreet were pre-arranged.
The majority of the vendors who are still listing products on Xstreet SL have increased the price of freebies to at least four Linden Dollars (to cover the new minimum sales-commissions and listing fees) and appear to be trimming all but their top-selling content.
Anything remaining as a free product will have a listing fee applied to it, and be shunted off to a category where it will not appear in search results. New monthly listing fees are being applied, and the cheapest items are to have minimum commissions. Basic profit appears to be the motivation here – we've not seen any other more plausible explanation to-date. If the move is intended to boost Xstreet's bottom line, we don't think the remaining content will make up enough of a difference.
With hundreds of vendors and thousands of products going dark over the move, it seems like the shopping experience is either moving back in-world, or going out to third-parties. Thus far, according to Linden Lab's figures, Xstreet SL has failed to capture more than a tiny fraction of overall Second Life commerce and, given the state of Xstreet's search facilities at present and the limited integration between Xstreet and Second Life, shopping for items in-world still seems to be the more engaging experience overall.
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Reader Comments (Page 1 of 2)
Archipelagos said on 5:07PM 11-20-2009
There's an interesting BBC article online about Second Life and it's apparent downturn from media/online darling. Good read, if a little depressing.
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Nalates said on 5:13PM 11-20-2009
None of the process has helped LL with their PR problem. New World Notes is covering some of that issue. The 'myth' that LL does not listen to residents is alive and well and this has done nothing but make it appear more the case.
I'll be removing my free items and looking at 3rd party systems.
It would be great to see what the poll numbers are for the poll LL sent to XStreet merchants.
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Freeballer said on 5:17PM 11-20-2009
it was a cheap and dirty move for people not trying to make a huge profit margin, starting out, or open source. I took all my items off slx, they were all basically 10L$ but I will not offset the costs to others nor pay extra fees ontop of selling fees. Its sickening it came to this and unfortunately was not a surprise (to me at least). I hope to see many "3rd" party sites crop up in the mess than linden itself is responsible for.. and I hope for the sake of people and communities i know online that linden can bounce back from this the most absurd of blunders.
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SpyderBite said on 5:19PM 11-20-2009
My Fiance is a very large merchant in SL. She designs clothing, shapes, maternity goods, etc. We make a decent chunk of change each month from SL. Around $2500-$3000 USD depending on the month.
She'll be fine, but is not happy about the change because many people use the Exchange as a sort of Search Engine which is more refined than the in-game Search function. People would search for a product, find it on the web, then teleport directly to the store to purchase the item. So, its really just going to be the small merchants that are snuffed out of existance with this change. But, I'm sure some of the larger volume merchants aren't happy either with having to shell out more from their bottom line.
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Xugu Madison said on 5:24PM 11-20-2009
> because from going through the transcripts, the discussions give the appearance that the changes to Xstreet were pre-arranged.
Yeah, I was beginning to think we were rather taking the blame for something that didn't wasn't actually what we suggested. An alternative site for freebies was a major point I was trying to make, for example...
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TigroSpottystripes Katsu said on 5:46PM 11-20-2009
Tat, could you do a review of third-party alternatives please?
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Nightbird Glineux said on 11:02PM 11-20-2009
Yes, please!
Nadine Neddings said on 1:56AM 11-21-2009
I'll third that request! Though probably a "review" would be hard to do without coming across as biased for one or another. Maybe an interview with the creators of each of the third-party marketplaces?
I had never heard of slapt.me before this article, and I'm certain most SL residents haven't heard of anything beyond SLX and OnRez.
Moe Greene said on 5:50PM 11-20-2009
For five years now I have heard pretty much everything LL does as being evil, coldhearted or bad for business. While I will agree that they do make some bad business decisions, most of this whining is by the same people who somehow believe Second Life is their own little playground and profits be damned.
The extent of the hypocrisy is typically equal to the level of ignorance when it comes to knowledge of how real business works. This isn't meant as a flame but it gets tiring to see the same whining everytime LL comes out with a policy change.
If you can't cover their listing fee and commission then you really shouldn't be in business. And enough with tugging at the heartstrings over freebies. If you can't find freebies in-world, you shouldn't be playing.
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Nerolus said on 6:09PM 11-20-2009
Covering the listing fee isn't a problem for most. Had it been this way in the first place - I'm sure people wouldn't uproar as much as they are now. It's the plain fact that LL hasn't explained the reasoning behind charging more. Their greedyness in this situation is frustrating. Nobody WANTS to have to pay more to list their items, they should not need to either.
Nightbird Glineux said on 10:25PM 11-20-2009
"knowledge of how real business works"
If you are so knowledgeable about business, then you simply CANNOT be surprised that the reaction of vendors to the rate increases at Xstreet is to move their businesses to stores with lower overhead. Rather, it would look to you to be the obvious thing to do.
If you think instead that businesses should just stay put and take it, please explain why that makes any sense at all.
Jay said on 2:32AM 11-21-2009
Nah, it's not the same people you are hearing over the past 5 years, most people only allow the lab to rape them once or twice before leaving.
What you are hearing is another generation of people who are just losing that honeymoon feeling for time and seeing how the Lindens love to screw you over before draining your wallet.
Yeah Right said on 11:15AM 11-21-2009
Moe, are you for real? Linden Lab profits plenty from land tier payments. From me, included. That more than made up for the few freebies I had listed. Those were intended for newbies who didn't have money yet. Big freakin' deal.
This makes Linden Lab look like greedy, greasy heels. Hurting for profit? RIGHT.
ChromeBallz said on 5:23PM 11-21-2009
Real business works by attracting and keeping customers, not turning them off and away.
Nerolus said on 6:04PM 11-20-2009
I'll be upping the costs of my things listed on xStreetSL and posting a big red notice at the top of the description for each item explaining how the item can be purchased in-world for a certain percentage off due to the unnecessary inflation of the costs to list an item on the website. They need to give a REALLY good explanation of why they're doing this, or else shame on them for squeezing lindens from their valued residents for no reason. They already make a ton of money to cover their costs and then some from tier alone. Not to mention classifieds, current/past commission from xStreetSL, etc.
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Jacek Antonelli said on 7:11PM 11-20-2009
Be aware that "inflating prices on Xstreet SL compared to in-world or other e-commerce sites" is not allowed on Xstreet. In other words, selling items in-world for less than you do on Xstreet can result in your Xstreet listing being removed.
https://www.xstreetsl.com/modules.php?name=Content&pa=showpage&pid=22
Nerolus said on 7:22PM 11-20-2009
Well, then I guess so be it. Otherwise I'd probably just remove my listings anyways.
:(
Annyka Bekkers said on 9:06PM 11-20-2009
@ Jacek.
That's a bizarre rule. I wonder what the reasoning behind that is? How is it considered anti-competitive to raise your prices?
krullcat said on 6:38PM 11-20-2009
Interesting, I believe LL has been studying the EBay fees
and listings model and have applied some of those
methodologies to XStreet.
XStreet, the new virtual EBay.
Hmmmmm, gives pause for thought.
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Johann Encke said on 8:19PM 11-24-2009
I second the call for a review of third party alternatives to XStreet, including Apez.bix, Slapt.me, metaLIFE Marketplace, Metaverse Exchange, SLshopper, Vitty, Textures R Us, and whatever else you can dig up.
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