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Second Life Virtual Property Boom
The Guardian Gamesblog has an interview with Philip Rosedale, Second Life's CEO and Founder. In the wake of last week's virtual property slaying, they discuss the realities of owning something intangible. From the article: "We launched Second Life without out of world trade and after a few months we looked at it and thought, 'We're not doing this right, we're doing this wrong.' We started selling land free and clear, and we sold the title, and we made it extremely clear that we were not the owner of the virtual property. USD$.4m a month is traded directly to world markets in Linden Bucks on Gaming Open Market. That's USD$.4m redeemed, or Linden Bucks turned into US dollars. In May 2005, the total amount traded in-world was USD$1.47 million. There were 1.3 million transactions between 19,500 unique users."
So you give them money for land (Lets say 1 block) and they keep said money and give you this block of data.. then.... they keep your money and..?
This is one huge ass scam type deal, yet totally legal and ingenius. Even if someone goes "No thanks, I'd like to sell you the land back, can I have my money please" they still get the intrest in the long turn and make a profit.
It's like selling magic beans, either way they win..
I like muppets.
When I read about "virtual real estate" I can't help but think of the
character who played Woody Allen's father in Love and Death and his
"valuable piece of land".
What's next? Virtual commodities trading?
Yes, I understand it's primarily for entertaihnment value, but somewhere
in Marketing (insert preferred afterlife here), a large group is laughing
themselves silly.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Ditch the fucking "second life" and work on the first one, that is, the real one. People piss their lives away in their digital... phantasmagorias.
I think we may be missing something here. The power of the notion of land ownership. In some societies, namely China, Japan, the Phillpines, the idea of land ownership is beyond fathoming for many people, who can otherwise afford broadband and computers.
To them, the notion that land "exists" in the virtual world connects to their ideas of self-worth in a very tangible way.
On the flip side, isn't paying for webspace on a server the same thing? You're paying for virtual property on a host, so that others can access that host and enjoy your creation.
If the webhost goes under, files bankruptcy, shuts down tomorrow... do you have any legal basis for a lawsuit? Just because they're not hosting you anymore?
Or they'll pull out their contract, which you agreed to before purchasing the service, which covers their ass in this situation.
What is particularly scary about virtual property in a massive multiplayer is that the good is so completely unlinked to reality that virtually anything could burst the bubble. An executive in the company hosting is accused of embezzlement -- *pow*. The hosting company enters Chapter 11 -- *pow*. A new fad massive multiplayer starts up -- *pow*.
This is why the comparisons against derivatives are misguided. True derivatives are not physical things, but still, an option to buy pork bellies at a certian price in the future will not become worthless without pork bellies themselves becoming worthless. Whereas property on Second Life can become worthless for an infinite set of reasons.
I believe that the idea of objectively valuable virtual property, as explored by Neal Stephenson in Snow Crash (The Street), will someday become a reality. But not until: (1) hosting the massive multiplayer is distributed among organizations that can't go bankrupt; (2)the massive multiplayer is either continuously upgraded or technology independent (perhaps a standard forum that will be interpreted in different ways depending upon the users client; (3) the massive multiplayer somehow guarantees scarcity, at least of more and less desirability property (perhaps by having a hotspot located near the hubs where avatars log on as seen in Snow Crash); (4) accounts are protected by really, really, really good user authentification programs (or else victims of a dictionary attack could lose 20k over night); (5) at least some of the user base is able to access the universe of the massive multiplayer in a thorougly immersive way.
I think it's just a matter of time before these conditions are met, and spending real money on virutal property starts to make sense. But I don't think we are there yet, and those who are looking at virtual property less as a game and more as an investment are playing with tulip bulbs.
Moiche
Like one of the comments posted on the article, I also wondered what happens 10 years down the line when the company goes out of business, or the game is no longer profitable and is shut down?
I guess consumerism has reached it's logical conclusion. How long before companies start selling us our own thoughts and emotions? I guess they already have, in indirect forms (entertainment/media). Meanwhile in the real world, millions of people die every year of starvation and disease.
If the website goes under, and you sue them, and you win, then you're just another unsecured creditor for the bankrupcy court to say "Sorry, bub, better luck next time" to :)
Help poke pirates in the eyepatch, arr.
When I pay my bills online, I am paying for a good or service that exists in the real world
When you buy virtual property you are paying for a real service. The ability for you to use such property (acording to the rules/T&Cs).
While I do not get paid in physical bills, the number which represents how much money I can spend on physical goods increases.
Money is just a representation of a value unit. Real or electronic it only has value because it is rare and is accepted by others in exchange for other goods and services.
Think that money in your bank account really exists? The reserve rate dictates how much actual money the bank must keep. If everybody went to get their money at once, they'd find most of it isn't there.
In the case of so-called "virtual items" there is no tie-in with the real world
The tie-in with the real world is that virtual goods are in demand, considered sufficiently rare, and can be exchanged for money, or other goods and services. Just like money, virtual goods rely on general acceptance and trust.
D6 63 0D 70 89 81 BB 8E 7B 7C 5F 5D 54 EA AB 73
Does the web exist? :)
Is "web developer" not an acceptable job?
Why should a $30,000 government contract that uses Second Life as its development platform be any less real?
SL is not an MMORPG... there are no experience points, mages, fighters or clerics... the skills you need and the skills you gain are very real. Like Photoshop, Poser, and programming.
If you have ever used a game engine like Torque, it's more or less the same, except you have an instant audience who's more than willing to throw money at you for the content you produce.
Hi, how's everything way up there above the rest of humanity!
There actually is a tangible aspect to virtual property...the time and effort used to produce the property. The theory of labor pretty much sees the amount of labor needed to produce a good as the major component of the price. The price of gold is largely determined by the amount of effort it takes to get find and get more gold.
The reason virtual property is a bad investment is that the people who define the virtual world can change the rules and change the time needed to create goods. People in power changing the rules happens all the time in the real world too.
BTW, I doubt you will find any investment tool that does not have legions of people telling stories of how they were burned by their investment.
It's no different to the question "what happens 10 years down the line when this hard disk I paid $150 for dies?" or "what happens 10 years down the line when this car I paid $12,000 for dies?" or pertinently right now, "What happens to my Rover car that I paid $15,000 when it breaks down and I can't get spares because Rover just went bankrupt?"
Virtual property is like anything else that can be traded; its value can increase or decrease relative to something else. It has a set of 'what ifs' attached to it like any piece of real property. Its value can be affected by the segment of the economy it's in (for example, the game developer can't just decide to make infinite land as a way of printing money, because if it's infinite it'll be worthless thanks to the laws of supply and demand).
Personally, I'm not interested - but that doesn't mean that I can't see that other people might find value in property within an online game. They can make up their own minds.
Oolite: Elite-like game. For Mac, Linux and Windows