July 03, 2008

Visit the Rezzable sims as long as they are still there

Two days ago, RightAsRain Rimbaud of UK based Rezzable announced something that should have sent shock waves through the SL blogs, but surprisingly has only been picked up by one major blog so far: paid admission to the Black Swan sim.

With immediate effect, you have to buy (and wear) a device for 199 L$ in order to visit Black Swan. The device allows permanent access to the sim - if you don't wear it, sentry drones hovering around Black Swan will eject you. RightAsRain said paid admission in Black Swan is a test run and might be implemented in other Rezzable sims, and in fact the drones hovering above the sims are a familiar sight for visitors of sims like Surfline.

The 199 L$ are not a large sum of money for me, and certainly money well spent to see the truly magnificent creations of Black Swan. For Surfline, on the other hand, while being one of my favorite places, I would not spend the money. And also not for Crimson Shadow which - apart from being a stunning build - is predominantly a shop.

What strikes me as odd - and concerns me to a degree - is that this move on behalf of Rezzable has DESPERATION written all over it.

I still remember the early days of Rezzable. Beautiful sims started to appear, and its creators hid under a veil of secrecy. Residents speculated about the purpose, while enjoying the barely-seen-before wonders. Slowly, the veil got lifted, but still there was no apparent business model recognizable. The most likely explanation was that they were building an impressive showcase in order to acquire corporate clients for custom built sims. Well, maybe I have lived under an SL rock, but no corporate account brought in-world by Rezzable comes to mind. In fact, RightAsRain Rimaud even explicitly named L'Oreal as a corporate account that pulled out from sponsoring Rezzable.

Yes, after a certain time, we saw a little commerce going on on Rezzable sims. Some clothing on Surfline and Crimson Shadow, or the availability to purchase statues and miniatures of exhibits. Certainly nothing to sustain Rezzable as a company. And now the admittance fee to Black Swan. So let's do the math. Rezzable has at least 25 sims. Even after the reduced pricing of late, this will amount to some 7500 US$ on island tier alone. Per month. Throw in staff and office locations in RL, to end up with a very significant monthly cost - and no apparent business model to generate revenue.

Enter the admittance fee. Traffic in SL is an issue on its own, so let's just speculate. I think it is safe to assume that Black Swan attracts 100 visitors a day, which makes 700 per week or 2800 for the month (let's disregard repeat visitors for the moment). Those 2800 visitors multiplied by 199 L$ for the admission fee leaves Rezzable with a comfortable 1500 US$ revenue, enough to pay the tier of 6 sims. But there is a flaw in the calculation. Several flaws indeed. Flaw number one is repeat visitors. I personally was probably 10 times or more on Black Swan, and a lot of my friends visited multiple times as well. For the sake of this example let's assume 10% repeat visitors. Then there is a lot of people who can simply not afford the 199 L$ admittance. Half a year ago, I would have thought it over several times before spending that money. So let's assume 1/3 of people who CAN'T pay the fee. And certainly a number of people who have the standpoint that sims in SL should be free and therefore refuse to pay the cover charge. Let's assume another third of those. That leaves us with 30 paying new visitors a day or 450 US$ a month - which barely covers the tier for 2 sims. If however my assumption of 100 visitors a day was wrong, and it would only be 50, then the admission fee would exactly cover the tier for the Black Swan sim itself. Nothing I would call a sustainable business model.

My personal interpretation of this move is: desperation. Maybe their venture capital has run out, and the corporate contracts they were working on pulled the plug. Yet they have a lot of monthly cost, so some of that needs to get covered no matter what. An admission fee is one option for that, and even though I personally think it is the wrong answer, I wish them luck with it. SL would be less beautiful without the Rezzable sims.

In the end it boils down to the question whether SL can be profitable at all. Yes, we all know about profitable SL enterprises. My own company, Babel Translations, is very profitable - but only within the SL economy itself. Others, like escorts or clothing designers, generate RL profits - but only as 1- or 2-men shows. I personally think that SL can not be profitable if you have a company behind it, with RL wages and other RL costs. I wish Rezzable would prove me wrong, I really do. But I doubt it. So my advice is to go and visit all the Rezzable sims, as long as they are still there. Because the sims will be the first that gets shut down should the money run out.

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