The good part starts at 3:40:
If you’ve been following along with SamSyn’s most excellent updates, we’re getting close to testing the “Real Money for Developers” project.
In short, what this project does is take the “Virtual Currency” out of Digital Goods sales in There. Note I said “digital Goods”, since that’s what developer sales are – sales of things you created which just happen to be in digital form – as opposed to “virtual goods”.
For things that you sell this way there are no more issues about T$ exchange rates, T$ buybacks, etc. You (the developer) put your things up for sale for Real Money, people pay Real Money, and you get Real Money for them.
I’m not quite sure this has ever been done before in a Social Virtual World before (if so, I’d love to hear about it).
For There, this is both very exciting, and very scary.
It’s exciting because:
- Developers can now get real money for their work. Hard cash. In your pocket (well, ok, your PayPal account).
- Developers now own even more of the transaction between them and their customer. In fact, in PayPal parlance, There is now a “Secondary Receiver” since we just get a portion of the sale.
- Developers have more incentive to bring themselves customers in There (because they’re being paid in Real Money, perhaps using other channels like their Facebook and Twitter feeds.
And, frankly, it’s exciting because it sweeps aside the whole “T$ BuyBack”/”3rd Party Resellers” issue. If you, as a developer, want to make real US $ for your goods, then you’re free to offer them that way.
(On top of all the other issues with “T$ BuyBack”/”3rd party resellers” we’ve discussed before, there’s the issue that since There was previously wildly unprofitable, every T$ was, in essence, subsidized by it’s investors, and, when you sold that T$ on the 3rd party market, a small part of that was subsidized also. Ugh).
It’s scary because:
- Depending on how many people opt to buy and sell this way, it could cause a significant drop in There’s revenue (because people aren’t purchasing Therebucks to purchase the items). Of course, we will still get a cut of the sale, but it’s not the same as us getting the whole Therebuck purchase revenue.
- This is a whole new level of responsibility for Developers, and people purchasing items from them. Since There’s not in the middle any more, Developers will have to take more responsibility for disputes, and keeping their customers happy. Fortunately, it will never be a matter of “I want to return this because it didn’t fit”, “I want to return this because I’m allergic to the fabric”, or “I just bought this to wear to the Oscars, and even though Lindsay spilled cocktail sauce all over it at an after-party, I want to return it”, but there could be issues which are new and unexpected. That being said, I’m sure they will step up to the plate, and have fun with it.
Let me go ahead and try to answer some questions ahead of time:
Q. Why are you making us (the Developer and Buyer) use PayPal?
A. That’s easy. Because PayPal is the only payment provider that provides a reduced transaction rate for digital goods (micropayments). You can read about it here (click on the “Pricing” tab).
Q. Why are you making us (the Developer) pay the PayPal Fees?
A. The biggest reason (apart from the usual litany of us being “Evil”, “Money Grubbing”, “Capitalist Pigs”, “Greedy”, and “Not caring about anyone”) is that it cost us (There) significant money to develop this feature, and the end result will we will make less off each sale than we did before. Bearing all that in mind, it doesn’t seem unfair that we’re asking the developer to foot the PayPal fees. I’m sure 99% of the people paying those fees will disagree, and maybe that will change some day if the program is wildly successful.
Q. When will you allow be to sell T$ to third party resellers?
A. For all the reasons we’ve discussed before, we’re sorry, but you can’t do that. It’s against the Terms of Service, and can result in you never having to worry about T$ again.
Q. What fees will you charge?
A. Our fees don’t change. The only difference (to There) is that we get the money when the sale is made, rather than “in advance” when the buyer purchases the Therebucks to eventually buy the item. Weird, huh?
Q. Will Developers have to pay income tax on money they earn?
A. We don’t know, and, even if we did, we wouldn’t tell you. It’s up to you to work with your financial or tax consultant to figure that out.
Q. Will you send developers a 1099?
A. No. The developer is the Primary recipient in this transaction, it’s up to them to tend their own finances. After all they’e a merchant now :-).
Q. Shouldn’t There pay my income taxes for me on any Developer sales I happen to make?
A. Ummm. No.
Those are all the questions I can think of.
I really, really, really hope people will focus on how to make this work best for Developers and Customers, and how we can drive more sales to Developers so they’ll make more stuff, and in turn make more money, so they’ll make more stuff…
In many ways, this feature is 110% for them, and although it’s been a long time coming, we’re really happy to offer it and see it go to work.
So let’s put it to work!
Sadly, this article is not an isolated incident. When we had to close There the first time (because, you know, it had been losing money for 10 years), I got threats like this, plus more run-of-the-mill threats (“If you don’t re-open There I’m going to go bomb your office”).
Here are some screenshots of SamSyn’s new “World Chat” feature.
While “World Chats” are by no means anything new, it will be new to There. We think it’s going to be a great way for people to:
- Find Each Other in World
- Find Activities in World
- Get help in the World
- Keep each other “Company” in World
I was always inspired by Glitch’s “Global Chat” because it was pretty consistently a fun, eclectic, and civil place to hang out. I’m sure There’s will be all those things, and more.
In the images below, the various links to Activities you see are AU-TO-MATIC : The system inserts those as various events/activities happen/occur in world. You can click on the links to be teleported to the event, or learn more about it.
SamSyn is currently testing this in QA, coming soon to a release near you!
(Disclaimer: I didn’t take this picture. It was taken at an event and I was busy celebrating)
Income (this period) from all AvMans
TB Sales: $17,745 (avg $21.71/purchase, $591.5/day)
Gross Income: $30,085
Peer Review Stats (all time) on all AvMans
Total Submissions: 5341
Total Reviews: 49210 (including 26416 from prior years)
Total Approvals: 2882
Total Cancels: 2394
Total Rejections : 6
SamSyn is almost done with “Global Chat”, which is exactly what it sounds like. It will also include the ability for the System to add events to the chat for things like “Such and Such Event starting in…”, and “Race starting in … in 10 minutes”.
Also, you don’t have to participate in Global Chat at all, if you don’t want to.
Of course it will also include the ability to mute/ignore people who insist on using it to show “LOOK AT ME I CAN TYPE SWARE WORDS ARENT U IMPRESSED?”.
Co-Host Decorating Privileges
We’ll also be rolling out the ability to designated co-hosts to always have decorating rights, instead of “just for events”. This is something folks have been asking for, especially in connection with “Landmarkish” areas in the world. For example, There could pay the rent on a Landmark, but leave it to a more aesthetically talented person to maintain it.
Developer Price Changes
In the near future, we will be making submission fees $1000TB across the board for all types of items. In 99.9% of the cases this is a price reduction – in many cases a significant price reduction. In a few odd cases, it seems to be a price increase, but this is frankly for some items that seemed to be aberrantly priced anyway.
Next up is the “Real Money” system for Developers.
Of course, we’re also going to see if these “How do I find people in the World” changes help people…Find things to do in World. If they do, we can then experiment with advertising again, with the hope new members will “stick”, and generate more revenue than the cost of acquiring them (which is what has happened with every other kind of advertising we’ve tried before).
If those things don’t work, we have more things to try, of course :-).
Event, Hood, and Decorating Changes
Based on your suggestions, the following changes are either in, or upcoming:
- “Empty” spots which are truly empty will no longer have a “Populated” icon at all.
- SamSyn is testing a new filter (actually exposing an existing filter) to filter out empty events in the various events pages. This will be controlled by the browser, not the event owner (duh)
- SamSyn is going to work on making it possible for ‘hoods to have permanent co-decorators. This could lead to There owning hoods in some landmarks or important areas and allowing designated members to “maintain” them (decorate, hold events, etc). Currently, a hood co-host can decorate a hood, but the decorations only last for the event, which is suboptimal for this purpose.
- Bruce is working on a script to automatically add Hoods and Zones to the maps – a previously manual process. We of course may need to tweak the “automatic-ness” of this process, but it will be better, and more accurate than the current situation.
We are also looking into Lowering Prices, perhaps on Hood Rental, or Developer Submission Fees. We’re making sure we don’t shoot ourselves in the foot this this one, but lowering fees and subsequently cratering revenue.
Deleting inactive 2D Avatars
We have started sending our warning emails to people who registered 2D Avatars, never subscribed, and have not logged in for many, many months. We’ll be sending out warnings at 30 days, 2 weeks, 1 week, and after we delete the avatars.
Keep in mind that many of these avatars have, frankly, Fake email addresses, and won’t get the mail. We’re not quite sure how we’re expected to warn those folks :-).
Unclaimed Legacy Avatars will NOT be impacted. They will remain encased in Carbonite.
Of course, if there’s some hole in this process, we have lots of time to change it. What we don’t want to do is give people a license to “Park” Avatar names, especially the “Good Ones” forever, which is what some people have done.
By the way, congratulations to Bruce, who wrote the Avatar deletion script. He accomplished something which the Old There never got around to doing for 10 years. Of course, he and SamSyn got There to run “in the Cloud”, which the old There said “Couldn’t be done”.
We continue to work on:
- Global Chat experiments
- “Real Money” transactions for developers.
Things we’re NOT working on.
We’re NOT working on:
- Events in PAZs. We looked at this many times over the years, and it won’t work. The biggest problem is the fact that a PAZ can be picked up at any time, which includes just before the event, during the event, etc. Also, since you can drop a PAZ in (for example) a thoroughfare, and have a private event in it, you can, effectively block the thoroughfare. On top of that there are many other technical infrastructure problems which would make this difficult and a questionable use of time.
Besides doing what I can for (or against :-)) There.com, one of the other things I’ve done is create a Foundation which provides access to robotic telescopes, for free, to students. We’ve had varying numbers of instruments on-line in New Mexico and Australia over the years, and have delivered as many as 10,000 hours of time to students in a year.
Our most exciting project has been the construction of an advanced 1-Meter telescope which will be, again, for student and University use. Now, a 1-meter telescope isn’t very big, but this one will be special because it will employ active optics to improve the instruments resolution. It’s a very cool project, where we get to play with optics, cameras that are cooled to far, far, below zero, and interesting mirror materials like SiO2 (silicon carbide).
It’s been a long project, and we’re not done yet, but the man who runs the foundation took a great picture of a supernova in a galaxy far, far, far away, shown above. Keep in mind this picture was taken with as-yet-imperfect optics.
You can read about the supernova’s discovery here.
This isn’t just pretty pictures – the Foundation has also contributed images and data to scientists studying these events. While many of our students have made contributions to various research projects, this is the first time the Foundation’s had time to do so.
By the way, M65 is 35 million Light Years away, which means this star exploded 35 million years ago, and we’re just seeing it now. Think about that. Oh, and if there were any planets around that star, they’re toast, or probably very tiny particles of toast – that star is 2.05747493 × 10^20 miles away and we can still see it, so it was a pretty big explosion.
In case you’re interested, here’s a picture of one of our observatories and the partially-completed 1M:
Here’s some follow up to some comments and questions from my last post:
SamSyn has tested a change which will make the “Hotspot” not show up when no one is in a location or event on the map. It seems to work nicely.
However, he did note that when “Zephyr” appears as a Hot Spot, no one was there, but found that people had built something high up in Zephyr, so they showed up as Hot Spot, but, of course, when you went there, no one was there. Not sure what we can do about that, other the the usual suggestion of “Nuke it from orbit. It’s the only way to be sure”.
Filtering Zero-Attendee events
We agreed we can do this. There will be some issue that when the filter is used, Events where the host hasn’t shown up won’t appear, but we view that as a feature, not a problem.
I asked SamSyn to gather some data on where rental income comes from. Here’s a slightly edited version of the response:
RENTALS: (next due between 2013-01-01 and 2013-12-31) 92 days of data found
Total Rentals: 812 <– as in 'places currently rented by someone other than us'
Total Income: 26547000 TB ( $14748 ) <– includes lot income, which goes to landlord
Total Income (minus lots): 13615500 TB ( $7564 ) <– our real income from non-PaZ
Total HoodIncome: 7818000 TB ( $4343 )
Total DevIncome: 0 TB ( $0 )
Total LotIncome: 12931500 TB ( $7184 )
Total DevLotIncome: 141000 TB ( $78 )
Total OtherIncome: 5656500 TB ( $3142 ) (There houses and funzones)
* HOOD income of $4343 (to US) is less than LOT income $7184 (to LANDLORD) which means that, on average, hoods are fairly profitable for their landlords. (and if we lowered rates, landlords would be less profitable in absolute, but the same proportionally)
* OTHER income of $3142 includes all thereHouses and funzones, but no PaZes. None of the above reflects PaZ income.
* and again, this is all real income as I removed zones 'owned by us' (where we are just paying ourselves with no net profit)
* I didn't break down the ThereHouses vs FunZones since I am not convinced our zoneTypes are trustworthy to tell the difference (they all started off as type 0 back in the day and only slowly got assigned to real zoneTypes)
So… our most recent month had income of about $10K from subscriptions and $24K from TB sales. Of those TB sales, $4400 went to real estate rent.
So, if we were to lower real estate prices (hoods and lots) by the same fixed percentage, we can estimate its impact on our income.
For example, say we cut the rates in half (hoods and lots so as not to disturb the landlord balance), our hood income would drop to $2200 and we would lose $2200 from our $24K TB sales. (on average, though possibly not in the same month, depending on when people purchased their therebux)
That’s some of the data we use to think through things like this.
April March Numbers
Income (this period) from all AvMans
TB Sales: $22,379 (avg $19.47/purchase, $745.96/day)
Gross Income: $35,739
As you can see, these numbers aren’t as strong as we’d like. Let’s look at the trial numbers:
TOTAL (since we started, mid-Feb)
NumTrials Attempted: 247
NumTrials Accepted: 245
NumTrials Rejected: 2 (too many uses of same PayPal acct)
NumTrials that converted to subscription: 50 (20.4081632653061 %)
NumTrials that still have a subscription: 40 (16.3265306122449 %)
MARCH (current status of those begun in March)
NumTrials Attempted: 183
NumTrials Accepted: 182
NumTrials Rejected: 1
NumTrials that converted to subscription: 31 (17.032967032967 %)
NumTrials that still have a subscription: 30 (16.4835164835165 %)
FEBRUARY (current status of those begun in Partial month)
NumTrials Attempted: 62
NumTrials Accepted: 61
NumTrials Rejected: 1
NumTrials that converted to subscription: 19 (31.1475409836066 %) <– friendly testers, novelty, or good 60 day trend.
NumTrials that still have a subscription: 10 (16.3934426229508 %) <– this has been pretty constant
So, our trial conversion rate has stayed at 16% for a 3-month "trend", "trend" being used lightly. This is a really good number, conversion wise.
The good news is that the trial system is working.
Conversion and Retention
The problem we (or any other Virtual World, or any other Game, or Product, for that matter) face is conversion, and retention. As you can see, our Conversion rate is actually good for an online product. The problem is retention – will the converted member stay and spend money?
Keep in mind that There has been looking at retention since it opened, and has tried all kinds of things over the years, including:
- Welcome Walkway.
- Adding activities (paint ball, card games, etc) to landing areas.
- Activity-specific advertising and destinations
- Varying sign-on and progress “Gifts” including T$, clothing, etc
While some of these efforts (especially the Greeters) have been successful, none of these have been really successful.
Now, to get this out of the way, making There Free is not the answer. Converting a Free member to a Free member who doesn’t spend money isn’t “Success”. Sure, it might make the World fuller, but that means we spend more money on infrastructure, without a corresponding increase in revenue. And, no, opening There to minors also won’t work, because besides having lots of friendly members who don’t spend money (we have proof of this), we have the additional Customer Service costs and, yes, the D-R-A-M-A.
What we do know is that people who show up with friends, or meet friends, tend to stay. The problem is, if people are off in the World in their Neighborhoods, or Paintball or Racing Zones, the World will look “empty” to the arriving member, or the members who can’t find people. We know the world’s not empty by the CCU numbers, but we also know that people are having problems finding other people.
Again, this is a place where we’ve tried all kinds of things: Map Icons, Current Event Listings, etc, etc. For whatever reason, none have been successful.
So we’re going to try something new. It won’t be very hard to do, and it’s a time-honored tool: Global Chat. World of Warcraft used to have it, Glitch had it (one of it’s best features, I think), and numerous other worlds have had it. It’s a way for people to communicate and have loose sense of presence and community without being in the same place.
Of course, we’ll augment the global chat experience with the ability to post a teleport link (“Come join me here“), links to products in the store or auctions, etc.
And, of course, we’ll provide easy ways to ignore people, especially inevitable potty mouth who defines their existence by talking like a sailor (not that sailor talk is bad, but, seriously, ALL THE TIME?).
Retention is something we have to solve before spending on advertising. I’m sure you all see that if we spend $5000/month in ads, but we get $200/month in revenue from “new members”, we’re not coming out ahead.
Also, we’ve had suggestions that “Lowering the Rent/Price/… of X will triple the world’s population”. Keep in mind, we heard that a lot before (I remember when someone told us the Key To Success was Space PAZ’s – once we did those, millions of members and Aliens would flock to There).
I’m sure we all remember the suggestions that “If you just lowered the price of paintball refills, you’d be indunated with Paintballers and rolling in money”. Well, we got 1 out of 3 there :-).
We’re doing a little analysis of the contribution of various types of rental to see if it’s worth trying. I think we all agree that cutting our income by 50% or 25% to see if that will help hood ownership would be a very risky proposition.
All that being said, here are our next projects:
- Real Money for Developer Sales (not T$ Buybacks
- Global Chat
- Avatar Deletion Script (this is to reclaim the ’000s of Avatar names claimed, and sat on, who’ve never subscribed. Of course we’ll warn you before we delete an Avatar/Name, but we’re not going to let you camp on it).
- Dedicated destinations from the Welcome Walkway for Paintball, Racing, etc
That’s about it!