Slashdot Mirror
Virtual Real Estate Boom Draws Real Dollars
An anonymous reader writes "According to a USAToday story, Second Life from Linden Labs is seeing a boom in virtual land trading. The article quotes a player as saying: 'My vision is to buy real estate in Second Life with one or two other investors and make it available to new players as a business', and it seems that 'Large swathes of undeveloped online property, some bearing an uncanny resemblance to a palm-studded West Coast beachfront idyll, are selling for up to $550 an acre.' Second Life uses OpenGL and Ogg-Vorbis running on a Linux grid." S!: We've previously covered Second Life on several occasions over at Slashdot Games.
I ask my fellow /.-ers, why? Why waste your money on "virtual real estate"? Are we all really this stupid?....
Or is this spam gone wrong?
My MythTV HowTo
They might as well post to Slashdot.
If this thing really takes off (reading up on it now), and if it's not been done yet, the Black Sun (as in the coolest online hangout in 'Snow Crash') might be a cool idea...
Are there any 'safeguards' against company insiders giving themselves land? What if a game change 'devalues' certain land (by blocking the view, for instance). I can see lots of potential for RL legal proceedings based on this.
buy low, sell high, get out before the crash.
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I've been playing Second Life since shortly before the 1.2 release shipped, (last December), so I've been there for the whole land crunch/boom process. This newspaper article, like most, only scratches the surface... it vaguely describes the scenario, but gives no history and no clear understanding.
Second Life completely changed its economic system in 1.2. In the 1.1 and prior days, object creation and maintenance cost in-game money. Objects are made of 'primitives' or 'prims': spheres, rectangles, cones, toruses (torii??) and probably 1 or two more. For a long time, every object you created cost you 10 Linden Dollars to 'rez', or create. When you destroyed the object, you were refunded your money. Further, if you wanted to create permanent objects, you were taxed a maintenance fee on a daily basis, which you did not get back. Your weekly stipend was roughly $500, so it was critical to come up with goods and services to sell if you wanted to maintain any kind of large permanent structure in SL. This meant that everything was very secretive and hardly ANYTHING was for free, because giving away anything damaged your own ability to build things. Land was very cheap, often the minimum price of $1/square meter, simply because few people could afford to fill much space... only a few very successful people and groups could build really large structures. There was also a 'height tax'... an object high above the ground cost more than an object near the ground. This also discouraged large structures and tended to keep everyone low and small. (heck, at one time there was even a 'teleport tax'.... you had to pay to be teleported somewhere instead of flying. Abolished long before I got there.)
The entire economic model shifted when 1.2 came out. Suddenly, object creation was free. There was no maintenance on anything you built. Instead, you were allocated a certain number of prims to put on land...each land parcel is able to support a certain number of prims. (A starting player is allowed to buy 512m2, which will support about 115 prims: they can buy more land if they want to pay more each month.) The second really large change was that you could own as much land as you wanted, as long as you were willing to pay for it in RL $. You mostly still had to buy it with in-game currency, but you paid for the right to own extra land in real dollars. As an example, someone who wants to own 4,096m2, which is a pretty comfortable size, will have to pay around $25/mo to support it.
So, suddenly, land was very desirable, and almost instantly scarce. Apparently, Linden Labs also went back through their records, figured out every dollar of object tax that had ever been paid by residents, and refunded it. So a whole lot of Linden Dollars were injected into the system all at once. To make things worse, a whole new class of parasite arose, whose sole purpose was land speculation. They drove land prices into the stratosphere. At the same time, a new service, Gaming Open Market, was launched, which allows trading RL $ for L$. This meant that people who really wanted to own property or otherwise do something could throw a lot of real-life money at it. At about this same time, word seemed to get into the mass market about Second Life, and with the population explosion, speculation, and Gaming Open Market, prices went to really crazy levels. I believe some of the speculators, as well as a number of the early players who suddenly had large wads of virtual cash, made thousands of real dollars. In the case of the speculators, I despise them for doing this, because they provided nothing of benefit in exchange. They DETRACTED from the Second Life world, made it much harder for new people to get started, simply to line their own pockets. I think it's great when people get rich foom MAKING things, and am perfectly content with the tax refund, but I consider the speculators to be nothing more than by-the-rules thieves.
SL has grown WILDLY over the last four or five months. There continues to b