Make real money in Second Life’s virtual world


What is Second Life?

Second Life is a virtual environment in which avatars — visual representations of users or “residents” — can interact. If you’re familiar with The Sims, it’s superficially similar, since it’s less a game with goals than a venue for socializing. However, Second Life is radically different in one important way: The entire world — attractions, objects, events — is created and owned by the residents.

Haven’t I heard this thing also called Linden? What is Linden?

You may have seen Second Life referred to as SL or, occasionally, Linden. The company developing and hosting SL is Linden Lab — God, nature and government to Second Life, as its residents note (some with dismay, about which more in a minute).

Why should I care?

Because where there’s ownership, there’s potential for commerce. For starters.

Why would anyone spend time in Second Life?

Why does anyone have hobbies? World of Warcraft has been compared to golf as a work-bonding event, and plenty of Net users over the years have participated in newsgroups, chats and discussion boards. In that context, Second Life is something of a diversion (since avatars, belongings and real estate can be endlessly upgraded, adorned and personalized), as well as a venue for cultural events such as talks and concerts.

And don’t underestimate the pull for many people of simply gathering. As we mentioned, SL is a bit like The Sims, in that the point of the exercise is simply to create and interact; there’s no game and no goal. The Sims titles are, of course, some of the most successful of all time.

Irony alert: Second Life launched in 2003, not long after the release of The Sims Online — a MMORPG (massively multiplayer online role-playing game) version of the popular title. Most observers perceived SL to be at a competitive disadvantage, as The Sims had a remarkable lead in name recognition. So what happened? Three things: barrier to entry (though there is a free trial version of The Sims Online; monthly membership is CDN$12), open-ended play and (again) ownership of virtual creations.

And so Linden Dollars are the play money in this play world?

They’re certainly the currency within Second Life, but Linden Dollars (L$) can be bought and sold — for “first-world” currency — at several online exchanges. In other words, not only can you spend U.S. dollars to buy Linden dollars (in case there was something you wanted to purchase for use inside SL), if you earn Linden dollars you can cash them in for U.S. dollars. The exchange rate fluctuates around the region of L$300 to $1; at the end of the first week in January 2007, the Linden currency market (the Lindex) closed at 269.8. Rates are to some extent moderated and adjusted by Linden Labs, though SL’s terms of service stipulate that the currency can’t be redeemable for value from Linden Lab itself.

So it’s just talk, walk and consume?

No. Second Life has hosted several cultural events (concerts, talks, debates). It has a number of gaming areas. And an Indiana university economics professor has been awarded a $282,000 MacArthur Foundation grant to develop and study a Shakespeare-themed area in the world. The Reuters news service has opened up an SL bureau documenting business, technical and cultural developments within the world. Two million people do this?! That’s what Linden Lab says, though as of early 2007 journalists, such as Clay Shirky, were giving that number increased scrutiny. According to Linden’s own information, as of last week, there were 2,371,468 uniquely named avatars with the right to log into the system, trade currency and so forth. More than a third, or 844,310, had logged in within the last 60 days, and 225,954 had logged within the last seven days.

Second Life participants are, by the way, required to be 18 or older. A second version, Teen Second Life, is restricted to residents aged 13-17.

Seriously, there’s money in this?

A surprising amount. Though one can participate on SL indefinitely with a free account and without spending any money on goodies within the game. Linden Lab posts weekly SL economic stats on its home page. Analyzing those numbers, writer/analyst Tristan Louis suggests that the 35% to 40% of SL residents who logged into the system during a recent 60-day period spent an average of $59 to $71 per week — that’s real-world U.S. dollars — in Second Life. Louis estimates that per-day spending in Second Life is just north of $135,000, and it’s rising.

Who’s making that money?

Linden offers premium accounts, which provide for property and a small Linden Dollar stipend, and leases land for development. Owning a patch of terrain (land or sea; some of SL’s most impressive constructs are underwater) gives regular residents a place to keep their stuff as well as a place for SL friends to check in, leave messages and so forth. There are charges for uploading items or material and for placing in-world classifieds.

The fancy commerce, however, is based on in-world sales of goods, services, games and so forth. Many users spend money to upgrade their avatar’s wardrobe, buy unusual objects and develop their (un)real estate. Would-be retailers can even build their own stores or even rent mall space for their offerings.

Second Life now even has its first “paper millionaire.” Ailin Graef (known in SL as Anshe Chung) is believed to have accumulated the equivalent of over $1.2 million on the site. Graef and her avatar are both real estate developers.

Are there problems? Security issues?

Rapid growth — Linden claims that new signups are growing the world by around 38% each month — has led to both server instability (last month’s launch party for In The Grid, an online magazine reporting on and in SL, was postponed due to server problems) and interest from the usual malware contingent. Nights and weekends tend to be busy, and users with slower machines may find the experience to be much less than pleasant.

In November, hackers developed a program that places spinning gold rings throughout SL. Pretty, but in fact a form of “grey goo” that slowed down the servers and prevented residents from logging on. The attack was defanged within the day, but concerns remain that SL has the potential to be a rough neighborhood. (The possibilities for sheer weirdness have not escaped troublemakers, either; it’s not uncommon for Second Life events to be disrupted by griefers.)

On the client side, Second Life requires its own software, and that software requires that certain ports (443/TCP, 12035/UDP, 12036/UDP and 13000-13050/UDP) be opened on your firewall.

More broadly, Second Life is treading new intellectual property ground, which has raised issues of ownership, copyright and even personality rights. Lawyer Mark Bragg has been suing Linden Lab for nearly two years over a questionable land deal. Lawrence Lessig’s recently released new edition of Code uses Second Life activity to illustrate various thorny IP issues.

A recent griefing incident at an SL event held by Ailin Graef/Anshe Chung led to Graef’s real-life legal representatives making copyright violation claims against journalists covering the attack. And a hack called CopyBot struck at the heart of the economic system, allowing users to duplicate any SL goods without paying creators for them.

Some SL residents chafe at the amount of control Linden Lab retains over Second Life. Substantial changes to the environment are often unilaterally imposed, and

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Jim Love, Chief Content Officer, IT World Canada

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