I understand that virtual worlds are a new thing, and that companies need to experiment with business models and pricing structures to see what fits the market best.
And I’m totally in favor of lowering prices, simplifying pricing structures, or providing more options for customers.
But I don’t understand where Kitely is going with its announced set of pricing changes.
Maybe I’m not really understanding this well, but it seems that Kitely is eliminating the free plan, getting rid of plans where visitors pay for their own access, and expanding the flat-rate pricing options.
The problem is that Kitely started out with the assumption that the current virtual world pricing system is fundamentally unfair. People who enjoy a virtual world typically don’t have to pay anything to visit it, while region owners pay the same amount regardless of whether their region is used only a little bit each month, or a lot. Kitely’s original pricing structure was an attempt to set things right. Just having a region cost almost nothing, while everyone paid for the time they spent in-world.
This was a simple and fair system, but, in practice, didn’t work particularly well. People would rather pay for land and content than time. Customers would rather pay extra than have to deal with keeping track of how many minutes they use — something long distance telephone companies learned a long time ago, and mobile carriers are still catching on to.
Some people liked the system, however. It’s great for creators building warehouses for goods that they sell elsewhere. It’s great for schools and other groups that use their virtual regions intermittently. And it’s great for museums and other organizations that want to be able to put up a low-cost region, and let visitors pay for their own access.
But everyone else wants to pay a flat price, get a region, and then not have to worry about how much time they spend in world, or how many people visit their build.
So a little over a year ago, Kitely added flat-rate regions, starting at $40 a month for 100,000 prims.
It was a reasonable price for high-performance regions. But it added a new layer of complexity for both visitors and land owners. For land owners, they could now choose between having just one free region that other people would pay to access, renting on-demand regions and paying for just their own usage, renting on-demand regions and paying for other people to access them as well, or renting flat-rate regions that everyone could access at no additional cost to anyone.
And visitors had to figure out if the region they wanted to visit was one of those that charged visitors for their time, or a region where the owner paid for the time out of their own pocket, or a flat-rate region. With the advent of hypergrid access next year, the situation would be getting only more complicated.
I don’t see how Kitely’s proposed new pricing structure makes things easier.
I’m not the only one.
Renee Miller — known as Ener Hax in-world — has been using Kitely to host her 16-region Enclave Harbour build, a science resource meant to be used in conjunction with educational workbooks. She also has a few other builds up on Kitely, that anyone can visit at no charge. She pays $35 a month, which allows her unlimited time to spend in-world, and gives her 20 regions — 16 for the Enclave Harbor, and four others to play with.
But she’s confused about what will happen under the new pricing structure, especially if she decides to open Enclave Harbour to visitors.
Would she have to pony up for the $100-a-month fixed rate plan for the 16 regions? Pay for the time that visitors spend in world? Or require visitors to get their own $19.95 “Premium” subscriptions before they can visit?
“I know enough about the publishing world to know that we won’t sell enough workbooks to cover people’s minutes or the $100 plan,” she said. “So with Kitely’s new model, we may completely abandon them.”
Clash of models
The way I see it, is that Kitely is trying to simultaneously embrace two different business models with one product.
Perhaps it’s time to simply switch over completely to flat-rate pricing, or set up two separate grids — one flat-rate, one time-based.
Or, taking this idea a step further, go all the way and become a hosting company.
Kitely already runs like a hosting company in many ways, rather than like a traditional commercial social grid. Most commercial grids, for example, have a certain percentage of land area owned by the grid itself, for welcome and meeting areas, freebie malls, residential areas with free or low-cost land plots, and open landscape. Most commercial grids also have dedicated staff working on community development, events, and outreach.
Lately, Kitely residents have been getting together and building a welcome area, creating a mentors’ group, and otherwise developing a community, but it’s taken a couple of years to get to this point. On most other grids, community-building is the first owner of business for the founders.
Even Kitely’s home page looks more like that of a hosting company than a grid. Grid websites typically feature attractive images of people enjoying in-world amenities and announcements for upcoming events, while urging visitors to sign up for a free account and visit the grid. Kitely’s home page calls on visitors to get their “own virtual worlds,” with a choice of pricing options.
If you didn’t know that what Kitely calls “worlds” are actually regions on a grid, you might, in fact, get the impression that Kitely was a hosting company and a not a grid.
Zetamex embraces the cloud
Meanwhile, speaking of hosting companies, another one is embracing the cloud — Zetamex. Which uses “Build your own worlds” as a tagline, but, in this case, Zetamex actually means worlds — the company offers white-label hosting for commercial grids.
Starting next year, Zetamex plans to expand its use of the cloud, offering always-on setups starting at $20 a month for four regions, 30,000 prims and up to 50 simultaneous users.
Prices go up to $80 a month for 16 regions and 120,000 prims — more prims and a lower price than the equivalent from Kitely. Plus, the regions are never suspended when empty, meaning that visitors can teleport in without having to wait for the regions to boot up.
“We been planning this for a long time, and we been testing our butts off on this technology and we are happy to say that the beginning of the year we are finally going to bring affordable cloud hosting to every grid that wants it and everyone who wants it,” said Zetamex CEO Timothy Rogers in an announcement yesterday.
One reason that Zetamex is able to keep prices so low is that it uses traditional, low-cost dedicated servers in conjunction with the cloud to get the biggest bang for the buck. This required the company to look beyond Amazon, Rogers explained.
“We are now with a few different providers that have insanely reasonable cloud servers and pricing, and setups that make since,” he said. “A year ago, cloud hosting was a bit crazy, but now other companies are making it make more sense for always-on usage.”