Second Life — the eConomy?
April 26th, 2006 | by mbhunter |A friend at work told me about this massively multiplayer game he’s become involved in called Second Life.
It’s become such a big deal, it make the cover of Business Week.
It’s a resident-created economy where avatars (the alter egos of the human players) buy and sell things in the world’s currency called “Linden Dollars.” They can buy clothes and jewelry, purchase land, run businesses.
Linden Dollars are purchased with real US dollars. And Linden Dollars can be cashed out for real US dollars.
Business Week reports on some people who are making six figures as residents in Second Life. The article talks about land owners and the inventor of Tringo, an addicting little game developed in Second Life and subsequently licensed in the real world.
The world is totally unreal, but the profits that some people are making are unreal, too!
My friend is hooked on it. He just bought an island for $1,250 and pays taxes of $200/month. This is US dollars — not Linden Dollars. Real money! He’s in negotiations with another resident to build some businesses on the island. I really am pulling for him to get in the black here before it gets harder to make back his money.
I really didn’t understand fully what changes were being made to the game (my friend explained something having to do with “dwell” and something else), but this is a risk with profit-making websites for which you pay for membership. You’re really not the one in control — the owner of the website is, and he or she can change the rules at any time.
That, and the entire virtual-reality world really blurs a lot of lines. There are casinos and other gambling places within the virtual world, but are you really gambling if you’re not wagering real money? In other words, do you pay money and take out a different amount of money, count it as a profit or loss, and how you manage to do that within Second Life doesn’t matter? Further, can Second Life be used to launder money? If one resident buys a bunch of Linden Dollars, and just hands then over to another resident, and the second resident cashes in his Linden Dollars for US Dollars, who’s any the wiser?
Any other comments? For real? 
5 Responses to “Second Life — the eConomy?”
By Tim MMF on Apr 26, 2006 | Reply
I think that was the second time BusinessWeek did an article on SecondLife. Or maybe a different mag did the first article I read? Anyway, it’s kind of a cool world. I play SecondLife. It’s not quick or easy to make money on it. Nor is it easy to build stuff! I haven’t tried scripting yet because I don’t know how to program but that seems like an easier way to make money.
Great post.
By mbhunter on Apr 27, 2006 | Reply
I hear that script writers can do quite well financially in the game. The friend that I mention in the post is a computer programmer.
By Cap on Apr 28, 2006 | Reply
woah. I’ve read about Second Life many times, but I thought it was just another massive multiplayer online game.. never realizing they are allowing people to retain rights to stuff created in the game. Most MMO retains the intellectual property rights to the game world items and creations, though that doesn’t stop people from selling their accounts, items, etc. I play Guild Wars and according to eBay, my character and its items are worth couple hundreds of dollars.
Course, if the game company catches someone who tries to sell in-game stuff they promptly ban accounts.
The fact that second life allows and associates real money with the in-game economy makes it very interesting and very dangerous too, IMO. Certain people will definitely come out ahead too, as mentioned. Whenever you insert value & utility into some online game, and you mix in real money… things always get hairy. It’ll be interesting to see where Second Life goes, because I honestly don’t know how they’re going to police all the usual scams and frauds found in the online world.
By Rich on May 9, 2006 | Reply
I don’t agree that you can use SL to launder money. That claim is BS. In order to buy Linden dollars, you need a credit-card or some such mechanism to pay for them. And in order to get a card, you would need to deposit your to-be-laundered into the accoount first. Essentially, you have laundered it already! You don’t need SL at that point.