Virtual World, Real Money

BusinessWeek's cover story for May 1st has to do with a little place called Second Life. BusinessWeek Online has several stories related to their exploration on online living. My Virtual Life is a first-time exploration of Second Life, with some examination of the property and financial aspects of the gameworld. It's Not All Fun and Games explores the serious side of virtual businesses, as they interview Ashne Chung (notable real estate baron) in a piece called Virtual Land, Real Money. Ed Castronova has his say in a more general article on virtual economies. Finally, for an outside perspective, the obligatory Terra Nova discussion is always useful.

Comments

Re:And yet, oddly enough

[Lordfly]

They're growing, which is why they aren't making money. They're adding about a programmer every week or two, not to mention a ton of part-time liasons (in-world helpers) and support staff.

If they stopped expanding their payroll they'd be in the black very quickly.

Re:I hereby

[Hogwash McFly]

The guy in question

Re:This is downright scary.

[Lordfly]

I guess. After coming home from work or university, I can grab a beer, sit down, listen to some Beethoven, and build a virtual house. Then I can plop the house into a box and sell it, and put it in a virtual "shop". Eventually somebody enjoys the house enough that they buy it. Over time, the house pays me handsomely for the time "invested" in me "working" on the house. Which is silly, because I built the house for fun in the first place.

Some folks watch TV, I doodle around in a collaboritive building environment. To each their own. :)

It's not what it's made out to be

[jasonhamilton]

SL isn't nearly as great as it's made out to be in the media. Even their best example - Anche Chung was banned from SL and their forums the other day. Moderators were then unleashed to remove any thread about her ban.

The only people making income are the land barons who buy up huge sims (servers) then sell off the land. It's a lot of work to cut it up and sell - and the profits are small unless you do this large scale. To get that kind of scale you'll need 10's of thousands of dollars invested. There is already a land glut and the profits are hard to come by even with a lot of money to invest. Because of the land glut, the market is facing inflation. We're seeing over $300 second life dollars per $1 USD.

If you want to try your hand at developing land to run things like casinos, malls, etc. You will have to upgrade your account to a paid version. You then need to find some land to buy. The monthly fee on a fairly modest 16,000m plot of land is $75. The initial cost for that amount of land is around $300 - $400. Much of the main land has no rules besides "PG" and "R" rated areas. So people build horrible objects and structures. The more prims an object takes up, the more lag the area gets. Anyway, people have issues selling clothing, skins, etc. because there is no way to prevent others from stealing them directly from the local client's graphics cache or directly from video memory. People steal then resell other's work.

You also have to watch out for gotchas in the game. They have rules such as a user needing to belong to a group that owns the land, in order to set "Home" to that location. The problem is, if your land is owned by a group, and you sell the land, all members in that group get an EQUAL cut of the selling price of the land. This is not something they mention to you when you click SELL. So if you're selling a $500 USD plot of land and you get $4 back, you'll not be too happy. Calling SL's tech support will yeld such gems as "If you were planning on making a mistake, you should have called us up before you made the mistake and we'd be happy to help you"

I don't want to rant on too much about it - I haven't even gotten started on the negitives ... but there are some positives to SL. But the hype is about making money - something that is extremely difficult. Most are lucky to even break even.