Capitalism 2.0

Are Second Life “Businesses” Worth Anything? Willing to Prove It?

[Comments Closed]

After writing a highly controversial analysis of the Second Life economy, asserting that it resembles a ponzi pyramid scheme in structure, I received any number of testimonials from apparently profitable Second Life business operators.

This started me thinking. Perhaps media hype aside, these virtual ventures really do have quantifiable value, a claim which can be tested. Second Life ventures should be measurable by widely accepted, standard methods, if they are indeed legitimate. This is a critical issue. The media is trumpeting the virtues of Second Life, with the passive and sometimes more active support of the game’s maker, Linden Research (Privately held, “Linden Labs”, “LL”). A brief sampling of news links from the official Second Life website operated by LL in support of Second Life include:

• Second Life: It's not a game Fortune's David Kirkpatrick reports on why IBM's Sam Palmisano and other tech leaders think Second Life could be a gold mine.
• I got my job through Second Life Looking for work? Your best bet may be an interview in virtual reality. Fortune's Katie Benner explores the cutting edge of corporate recruitment.
• Starting a Second Life Business Find out what entrepreneurial opportunities the virtual world of Second Life has to offer.

SecondLife: Revolutionary Virtual Market or Ponzi Scheme?

[Comments reopened.  Deutsche Bemerkungen begrüßt.]

Follow up article on the Linden dollar is here.

In 2005 I began working as a venture consultant for some entrepreneurs and investors trying to develop a fairly ambitious “real-money-trading” (RMT) business idea. My work resulted in my collection of a large amount of RMT market data for most of the popular massively multiplayer games and virtual worlds. Although the new venture was never pursued due to my analysis of the true RMT market, one game caught our particular interest: SecondLife, operated by Linden Research Inc. (privately held, San Francisco CA).

Unlike the makers of nearly all other online games, the operators of SecondLife not only allow and encourage the exchange of game currency for real money, but they actually facilitate it. As early as 2005 I began noticing a rumbling in interest-focused blogs about the exploding market that was SecondLife. Touted as a pioneering future Metaverse on the industry’s most informed blog, TerraNova, an array of journalists, academics, and company executives have claimed that SecondLife boasts an economy complete with in-game banks, multiple currency exchanges, a floating currency exchange rate, and a burgeoning in-game commerce and business base.