Another factor is the price of goods in other worlds. SL goods are cheap by comparison. By some estimates goods are priced 5 to 10 times higher outside SL. I went looking for examples.

One site selling 3D models is Renderosity. An avatar for Poser sells for US$5 to $10 and often includes clothes, hair, shoes,  etc. In L$ that is L$1,250 to L$2,500. That is the price range mesh bodies and their default clothing in SL. Another is hats… in SL those go for about US$1. In Renderosity about US$7.

She leads in the cold of winter

CG Trader is another 3D model market. There, helicopter models go for US$10 to $300. In SL helicopters go for an average (of 10 on first page of results) of L$ 1,883 or US$7.50.

Each place I look, I find SL prices are lower and often MUCH lower. So, this is a good indication that prices may be higher for Sansar goods.

The market sets prices. There is a cost to make and sell things. Buyers are willing pay what they think is a reasonable price for items. The efficiency of the free market is that as long as buyers are willing to pay more than the cost of producing a good, it is available, someone will make it. This works well until someone creates a monopoly or government sets prices controls.

An example is OPEC (Organization of Oil Exporting Countries) trying to control oil prices. The price of gasoline is not very elastic. People have to have gas so they pay whatever the price and there is little they can do to change how much they use, at least in an overall national consumption view. So, OPEC countries reduce production to push the price of crude up and that drives up the cost of gasoline.

A pound of MM’s goes for US$19-28 depending on where you buy them. Knowing that, would you pay $60 to $90 for the same bag? No. If you can find the goods for the usual price, you buy. Otherwise you don’t buy and Mars, Inc. loses sales. But oil prices jumped by 300% and gas sales dropped by only a modest percentage. Only when America developed new fracking technologies and began producing oil did OPEC open the faucets to drive prices down and put frackers out of business. This is a historic cycle that the US and Saudi Arabia have repeated a number of times. It well shows the dynamics of inelastic goods.

I think there is a good amount of elasticity in the price of SL goods. Therefore I think pricing will be a matter of the percentage of people coming into Sansar from Second Life and other worlds. Those coming from SL will be conditioned to lower prices. Those coming from other worlds will be used to higher prices. Those new to Virtual Worlds be unpredictable. So, we can only speculate on what the customer base of Sansar users will be willing to pay.

Marketing classes present a number of ways to figure out what to charge for services and products. Usually somewhere toward the end of the class they get to the concept of: ‘what the market will bear’. If people are willing to pay US$50,000 for a new car and you can build your similar product for $10,000, what should you charge for it? The market will obviously bear $50k. Ultimately the buyers will set the price. But, if you sell yours for $12k, people will wonder why yours is so cheap. What’s wrong with it? The point being that not only do we have to deal with production and materials costs, but the psychology of our buyers.

At this point we are all making our judgment calls on what marketing will be like in Sansar. The advantage of a free market is we are all free to do what we think will work best for us.