IMVU Economic Frenzy is a laughable non-event

For those of you that aren’t involved in IMVU in any way, skip this post, I’m about to ramble on about things that probably won’t make any sense to you. However, if you’re a fan of economics and/or human nature, you may just find something of interest. You see, IMVU (the 3D Chat community that I create virtual products for as a sideline business) is currently in the process of raising the base pricing of it’s virtual goods. Their reasoning follows, as stated by the CEO in a blog post:

We are raising prices for virtual goods today. I want to explain why we are raising prices.

  1. To increase growth for IMVU and Creators.   Higher prices means more credits for you and us.
  2. To make pricing more fair.  It is harder and more complex to create rooms and furniture products, so we want to ensure the reward for creating those products is higher.

How do we know that IMVU members will accept the higher prices?  Because we did pricing tests with IMVU members, and these tests showed that demand for goods in the catalog will stay the same at these prices.

In the forums, a staff member broke it down for us this way:

1) Base price for rooms will increase to 500 credits, if the current price is less than 500.
2) Base price for furniture items will increase to 350 credits, if the current price is less than 350.
3) Base price for all other items will increase by 10%.
4) Creator profit for the first direct IMVU Inc. derivation will increase automatically by the same percentage as the base price increase for that product – as long as it is derivable.
5) Profits for other items in the derivation chain will stay the same, and Creators can adjust them to suit their needs as necessary -but only if the item has not been derived from.
6) Creator profit for items that are non-derivable will not change automatically even if they are direct derivations of IMVU Inc products.

We cannot instantly change all the prices in the catalog, but they will all change within the next 2 days starting now

The laughable (and very predictable) thing is the community reaction. There are currently 58 pages of forum post replies to the announcement, and the posts just keep coming. Outrage, threats to strike, threats to leave the site for good, and a variety of other angry responses go on, page after page. I’ve seen maybe 3 members post realistic and non emotional replies (not counting moderators).

Welcome to 2010, folks. The US economy is, and has been in the toilet for some time now. Gasoline prices soar daily, food prices are astronomical, and heating your home this winter is going to be much more of a drag on your wallet. Why this increase to IMVU base pricing is a surprise to anyone is beyond me.

Personally, I think there are a few different reasons for this, none of which would be popular with the people trying to scratch together a few dollars from their virtual goods catalog income.

  1. The infamous “credit sink” that a lot of members have been wanting. Be very careful what you ask for, because you’ll get the full blown out of proportion version when dealing with online companies.
  2. The completely out of hand saturation of IMVU products in the catalog. Much like anyone with a computer pre-loaded with an HTML editing software thinking they’re web designers… every member of IMVU that’s downloaded the Chat software now has the same software necessary to create their very own virtual goods – artistic talent be damned! Raising the base pricing makes it a little more difficult for new “creators” to build a catalog on a whim, it’s going to take more of an investment than that now. (This is the bottom line that’s generating all the angry responses.)
  3. Creators that undercut pricing to compete are going to find this whole “developing” gig a little less attractive now, and may even be forced to find a different marketing strategy.

Overall, I think IMVU is trying to minimize the number of creators adding products to the catalog. Increasing the cost of creating will no doubt decrease the number of new items submitted, and hopefully increase the quality of the products that do get submitted. Let’s hope so, there’s so much garbage in there now, shoppers really have to dig to find quality products.

Why am I not upset? I’ve always valued the work I put into creating products for IMVU, and have priced my items accordingly. Business is business, and as a creative professional, I’ve made sure to include a healthy profit on my items to compensate for my time and what I consider to be a reasonable amount of artistic talent. Truth be told, I’m considering raising my prices once the dust settles from this latest “catalog maintenance”.

Why would I raise my prices? First of all, because my items are well worth it, and second of all because I hope to prove that people will in fact pay for quality. My cost of living’s gone up, so economics being what it is… there ya have it. 😉

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3 Responses to “IMVU Economic Frenzy is a laughable non-event”
  1. Koye Barry says:

    And this is why I like you so much, Ginger… your brain still works.

    I’ve opted to just stay out of the IMVU forums as there’s rarely anything that resembles honest, non-emotional debate anymore. And the few voices of reason or serious inquiry end up drowned out in the hysterical din of those who just won’t accept change – or more specifically, accept the fact that IMVU will do WHATEVER IMVU wants to do and cares less what anyone thinks about it, despite the surveys and questionares they send out.

    When I first joined IMVU and began developing, our customers paid more for our products then than they do now. For example, I have an island room in my catalog, with no poses and no serious animations with a price tag of over 7k that sold well until certain devs began bringing in cheaper room meshes with more goodies in them. I can’t lower the price of that island room to make it more competitive because the mesh itself was about 5k to derive from and well out of the competitive price range as well.

    A lot of my Old Timer dev friends are sitting on older, higher priced products like that. But back in the day, when credits cost more to buy, and less to sell, those high priced products sold just fine. And a lot of my Old Timer friends still made Master Developer status despite the highter pricing and smaller community size.

    A couple or so years back, IMVU decided to tack on an extra 10% profit for themselves on the front end of product pricing, while also adjusting some backend pricing at the same time. Folks had a cow then too. But devs continued to submit products, customers continued to buy, and IMVU continued to grow.

    Bottom line is, if people want it, people will pay for it.

    I agree that the catalog is full of so much garbage that it’s become more of a treasure hunt than a shopping excursion. Just because you own a graphics paint program doesn’t mean you should use it. But three years ago, Matt’s “vision” was for everyone to become a creator, everyone buying from and selling to each other. Everyine spending their earned credits right back in IMVU. And since most folks won’t earn enough to support their own spending needs, most folks would still have to buy credits. IMVU’s next goal was for most of those credits to be purchased at full price from IMVU (1000 credits/$1) and they set out to simplify that process by adding in international money exchange systems besides PayPal, allowing credit purchases via cell phone, and the ever popular with the kiddies – prepaid IMVU credits cards from Wal-Mart and other stores. IMVU is right on target with these goals. And they continue to make life hard for the resellers.

    But Matt’s vision is also responsible for why our incomes have dropped and why the catalog contains a great number of Hot Mess products. Somewhere along the line, IMVU apparently has decided that while 7 million products looks good to investors, 3.5 million crappy products doesn’t look good to consumers. Making it more expensive to submit a crappy product when you aren’t earning much from your crappy catalog in the first place, is a good first step towards minimizing the amount of future crap submitted.

    There are still a great many issues in need of addressing in IMVU – some of them infinitely more serious than this subject – but this move is a step in a somewhat better direction for creators – meshers and texture folks. It still ain’t perfect, but it’s something.

    I just wish there was an easier way to raise our product prices (or make other minor adjustments like turn on bundability or fix the product name) without having to put each one back into PR.

    Mostly, though, we all need to get a grip and get over thinking that our opinions really matter in the great IMVU universe.

    • Ginger says:

      I knew you’d “get it”, Koye! Thanks so much for your reply, it’s so refreshing to hear a down-to-earth reaction to a business decision that IMVU’s made. I’m certainly no IMVU cheerleader, but I can read between the lines. As I said, business is business.

      You make a great point about the adjustments that we sometimes need to make for our products. Every little change shouldn’t require products to go back through PR, but having seen some of the stunts people pull – I can’t really argue that it’s not a necessary step for IMVU to take. The fact that these products remain available for sale in the catalog while going through PR yet again is a redeeming factor.

      I’ve always been one to think outside the box for marketing. Limiting availability through pricing is not an uncommon tactic though, so I’m still surprised at the lack of recognition by a majority of the Creator Community. To state it very simply, if your stuff is good, you’ll earn enough to continue creating.

      I’m hoping that IMVU shoppers take note of the higher prices, and decide to demand a higher quality product for the higher prices they’re being forced to pay. I was never a fan of undercut pricing as a marketing strategy, so overall, I’m feeling vindicated in a way (but I’m trying to keep that quiet lol).

  2. buy anything on imvu with this method says:

    Well, I thought that would be the only flaw because the other graphics were amazing.
    txt is nice, included by the creator of the brushes, and tells you where to place
    this brush set. IMVU grew its revenue primarily by increasing the
    sale of virtual currency to its members, who use that
    currency to purchase virtual goods ranging from clothing for their avatars to furniture for their rooms.

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