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The Incredible Money-Making Potential of Second Life

Jun 2nd 2011 at 7:02 PM

Developed by Linden Lab and launched in June 23, 2003, Second Life is an online virtual world where free client programs enable users, called Residents, to interact with each other in the world through their virtual representations called Avatars. Users use their avatars to explore the world; meet other Residents; participate in individual and group activities; socialize; and create and trade virtual property, goods, and services with each other. As of 2011, Second Life has over 20 million registered user accounts.

In this virtual world, users lead lives that are surprisingly comparable or near in depth to their real lives. For instance, a woman who is a cashier in real life may create a Second Life avatar who is a 19-year-old fashion model. Properly handled, that avatar can earn $100,000 Linden dollars (the virtual world’s currency) per photo shoot, put half of it in a Second Life bank, then spend the other half shopping in a virtual store to buy virtual art at virtual auctions so she could decorate her virtual penthouse apartment. She could invite other avatars to a party in her favorite virtual nightclub. And the store, the penthouse, and the nightclub are all run by other avatars. These avatars make money from sales, rent, or cover charges.

These aspects are shared in other virtual worlds. But what makes Second Life particularly innovative is that you can make real money from your avatar’s business, and making real money is actually encouraged! Through a system called LindeX, you can exchange your Linden dollars to real money that you can deposit in your real-world bank account. It also works the other way around. If your avatar runs out of cash in Second Life, you can charge the US dollar equivalent for a certain number of Linden dollars from your credit card.

Second Life has essentially penetrated the line between virtual and real world commerce. People are making real money albeit in small amounts (268 Linden dollars to 1 US dollar) through their avatar’s activities. Indeed, they can work as land developers, real estate agents, executive directors, bouncers, bartenders, and virtually any occupation that exists in the real world.

Can you make a large amount of money in Second Life? Well, the issue still remains to be seen. According to Fortune magazine’s David Kirkpatrick, Linden Lab announced that 17,000 Second Life residents have positive cash flows with over 450 people generating a monthly income exceeding $1,000. Yes, it is a small amount but the phenomenon is startling nonetheless. We may be seeing the onset of an entire virtual economy that not only reflects but also ties into the economy of the real world.

Big companies like IBM are starting to get involved in Second Life. IBM employees have created their avatars, and these avatars attend virtual meeting in a Second Life virtual IBM conference room where they can conduct actual IBM business there with other avatars. Per se, it is not a money-making venture but it has made a new type of commerce: building presences for real world companies in real worlds. Other companies like Reuters, Sony-BMG, and Toyota have built virtual storefronts, billboards, or news tickers in Second Life. Some fronts may just be mere marketing tools while others actually sell virtual products to avatars.

Experts theorize that it is only a matter of time before actual sales will take place in Second Life. In other words, your avatar can go inside a virtual Sony store, purchase a TV that is priced in Linden dollars, then wait for the real TV to arrive via a courier on your doorstep.

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