Thursday, May 18, 2006

Making Money in Second Life

A host of articles about Second Life and the real business opportunities it presents.

My Virtual Life:

"We can and should view synthetic worlds as essentially unregulated playgrounds for economic organization," notes Edward Castronova, an associate professor in telecommunications at Indiana University at Bloomington and author of the 2005 book Synthetic Worlds: The Business and Culture of Online Games.

That's the mission of a secretive Palo Alto (Calif.) startup, Seriosity, backed by venture firm Alloy Ventures Inc. Seriosity is exploring whether routine real-world responsibilities might be assigned to a custom online game. Workers having fun, after all, likely will be more productive. "We want to use the power of these games to transform information work," says Seriosity CEO Byron B. Reeves, a Stanford professor of communications.

There's no denying the explosion of media, products, and services produced by users of these virtual worlds. IGE Ltd., an independent online gaming services firm, estimates that players spent about $1 billion in real money last year on virtual goods and services at all these games combined, and predicts that could rise to $1.5 billion this year. One brave (or crazy) player in the online game Project Entropia last fall paid $100,000 in real money for a virtual space station, from which he hopes to earn money charging other players rent and taxes. In January inside Second Life alone, people spent nearly $5 million in some 4.2 million transactions buying or selling clothes, buildings, and the like."

From CNN Money:

"Anshe Chung buys up Second Life land, paying Linden Lab roughly $200 a month for each 16-acre plot, plus a one-time fee of $1,250. Then she develops the land, using Photoshop to add rivers, mountains, and forests. Sometimes she hires subcontractors to improve the acreage by designing or building houses. Then she sells or rents to other Second Lifers, who pay good money to inhabit her creations. As in the real world, prices vary by location. But often someone will pay Anshe $100 up front to buy a one-acre plot, plus $20 a month in land tax. In a case like that, Anshe makes $112 in her first year. She's done more than 10,000 various real estate deals. "I'm like Wal-Mart," she says. "The margins are small, but the volume isn't."

Second Life is still an emerging nation, and Anshe believes it's rife with moneymaking opportunities."

Wired "Making Money in Second Life":

One they've perfected their look, Second Life immigrants who want to build virtual homes often purchase or rent land from entrepreneurs like Tony De Louise, from Long Island, New York, who gave up the meatspace rat race to become an online landlord. "I've worked two to three jobs most of my life," said De Louise. Now, "instead of coming home at 10:30 at night, I'm home and can help my wife put our new baby to bed."

De Louise and business partner Alice McKeon own d'Alliez Island Rentals, and now lease land on a chain of in-world islands they own. They pay Linden Labs $1,250 for each island, plus a $195 monthly maintenance fee. Renters in turn pay from $15 to $75 for average-size land parcels."

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