Virtual World Business And Development Information

Archive for January, 2007

eBay Bans Virtual Merchandise Part II

Posted by SIM on January 31, 2007

Virtual Goods No Longer For Sale On eBay
January 31, 2007

Online auction house eBay has begun delisting sales of virtual goods and items, a move that could threaten a bustling internet economy.

Hani Durzy, a representative for eBay, told technology blog Slashdot that the move was in line with the company’s policy that “the seller must be the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner.”

Sales of items and characters on popular massive multiplayer online games like World of Warcraft or Everquest have become an unusual but vibrant business on the internet in the last five years.

Players of the games were able to make real-world money by building up skills for characters, acquiring items, and then selling those characters and items to players with less time to spend on the game.

The value of this economy has been estimated to be between $250 million and $800 million US a year, according to experts.

The decision by eBay to delist the items came over concerns about the legal ramifications of the ownership of items created in an online world, but does not affect sales of items in the virtual world Second Life.

The decision opens the market to other sites such as IGE that specialize in the trading of items and goods obtained through the games.

Indiana University Prof. Edward Castronova told technology site C-Net that the move signals a desire to stay out of a legal battle.

“eBay is a big, well-funded company,” he said. “If they turn their back on this market, they sense it’s not worth fighting (the people who run the games) to keep this going.”

Castronova first made headlines in 2002 when he said the per-capita gross national product of Everquest’s Norrath world would make it the 77th richest nation in the world if it were a country.



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Next avatar on Second Life: the Swedish taxman

Posted by SIM on January 31, 2007

STOCKHOLM (AFP) – Swedes earning tax-free money on Internet games such as World of Warcraft and Second Life may have to think again after Swedish authorities said they were planning a clampdown.

“We’re not interested in ordinary gamers, 99 percent of them play for the sake of playing,” Dag Hardysson, head of the Internet trade division of the Swedish tax authority, told AFP.

“Most people play and keep their money on their game account, but if they move it out of the virtual world into the real world, then we’re interested in them.”

He cited as an example a player in World of Warcraft who advances to a higher level and earns a virtual weapon which he then sells to another player for real money.

“That should be taxed as income, because he has worked for it in the real world,” Hardysson said.

Another example was a fashion designer in Second Life who sells clothes in both the real and virtual worlds.

Hardysson said that while tax authorities were keeping a close eye on developments in the gaming world, he did not expect players to actually have to pay taxes for another two to three years.

“So far there are only a few people in Sweden who are earning big bucks this way,” he said.

But, he stressed, “this market is going to grow. We’re following developments and we’ll see what happens.”

Tax authorities still need to resolve the technical issues involved in controlling players, he added.

Second Life is an animated world where real people use proxies, called avatars, to “live” alternate identities in a virtual community, complete with homes, colleges, museums, shopping, dance clubs and even “avatar sex.”

Enterprising young gamers have earned livings playing games such as Warcraft by selling online booty to those willing to pay to advance quickly through the different levels.

Thousands of people also reportedly supplement real-world incomes with cash earned in Second Life, where a woman recently claimed to have become a millionaire by selling virtual real estate through her avatar.


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Electric Sheep Co.

Posted by SIM on January 29, 2007

Digital Dealmakers: Sibley Verbeck
By Daisy Whitney
January 29, 2007

The player: Sibley Verbeck, CEO of Electric Sheep Co.

The play: Electric Sheep Co. creates content for online virtual worlds. Electric Sheep inked a deal with Showtime last week to craft the virtual world for its “The L Word” show using the virtual-world technology known as Second Life. The site launched last week on Showtime’s Web site and includes, for instance, a neighborhood cafe that serves as the hangout for “The L Word” characters and which will host virtual-world events such as speed dating. Electric Sheep also worked with MTV last year to create a virtual world for “Laguna Beach” in one of the first examples of a network debuting an online virtual experience for a show.

The pitch: A virtual world is a new communications medium, Mr. Verbeck said. “You feel like you are in the same place with another human being when you are logged into a virtual world.” Users can create avatars for themselves and then interact in the online world.

Pros: An online world is an immersive experience that can deepen a viewer’s loyalty to a show, and also allows for interactive advertising and sponsorship opportunities.


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Second Education

Posted by SIM on January 27, 2007

Virtual world classrooms of Second Life know no bounds
Roberto Rocha
January 27, 2007

MONTREAL — Montreal’s Lasalle College just opened a new campus, made almost entirely of glass, where students can levitate to class.

Yes, you read that right. Their students fly.

In the virtual world known as Second Life, people aren’t bound by the laws of physics, but it’s as close as it gets to the real thing for students taking online courses from their homes.

“You can interact visually with the teachers,” said Jean-Francois Comeau, a business development manager at Lasalle, “and with the students too. This has never been possible in web seminars.”

Granted, those students and teachers are represented by cartoon-like characters, who may look nothing like the real person controlling it from a computer. It hardly matters to the downtown trade school. With this new e-learning platform, Lasalle became the first Canadian school to offer courses in Second Life’s make-believe universe.

Second Life, for those out of the loop, is a computer program that allows people to live a fantasy existence as an animated character called an avatar. People all over the planet interact in this world, some buying “land,” building homes and running businesses that sell avatar enhancements.

It has almost three million registered users, according to Linden Lab, the San Francisco company that created the program.

Part of its appeal is the freedom users have to build items with a 3D design tool and keep intellectual property rights for their creations.

For Lasalle, which will offer interior design and fashion marketing courses, the benefits are clear.

“Imagine doing a design course in a 3D world. We can have our students design a house that the other students can see,” Comeau said.

Lasalle’s online courses were normally done through a web seminar program, which beams slideshows, video and the instructor’s voice through the Internet to a student’s computer. But the interaction with the teacher was limited, Comeau said, and non-existent with other students.

“Now, the students can meet at the lobby and talk about their projects,” he said.

Right now Second Lifers can only communicate by typing instant messages, but Linden Lab is working on adding real-time voice technology, which Lasalle hopes to exploit when its first virtual classes start in September.

And while Second Life is a public place, landowners can restrict who comes on their land.

“We need security, of course,” Comeau said. “We don’t want anyone coming in with a weapon, or rival colleges putting up publicity on our walls.”

According to CNN, more than 60 schools in the U.S. have set up courses in Second Life, including Harvard University. The course Cyber One: Law in the Court of Public Opinion is taught in an outdoor amphitheatre on a private island.

“Second Life allows a deeper sense of community among participants that just wasn’t possible in distance learning,” said Gene Koo, a fellow at the Berkman Center for Internet and Society at Harvard Law School.

The artificial world, where everything is created by its residents, was also a perfect metaphor for the course’s content.

“In Second Life, the rules are made by people,” Koo said. “It’s less obvious that the world we live in was also built on human-made rules. This lets the students know they have the power to change the rules.”

Other schools have also jumped on the technology as a way to engage children in the online medium they’re growing up in.

“There’s so much potential for kids to create whatever they want,” said Kelly Czarnecki, the teen librarian in Charlotte, N.C., who helped create a virtual library in a teen version of Second Life.

“We thought it was better to reach out to where they are,” she said.


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eBay Bans Virtual Merchandise

Posted by SIM on January 26, 2007

eBay To Suspend All Virtual Item Auctions
January 26, 2007

A new report from technology news site Slashdot has revealed that online auction house Ebay intends to remove listings for all virtual items, regardless of type or game title, clamping down on third-party sales of gold and accounts from many popular MMOs.

Despite the Slashdot piece further explaining continued in-game item and currency sales through third party firms as IGE, previously profiled on Gamasutra in August, and Sony Online Entertainment’s own internal Station Exchange for its line-up of MMO titles, eBay has decided to close down all virtual item listings due to their inherent ‘legal complexities.’

The policy currently in effect covers virtual items of any type, including in-game currency, items, and entire accounts or characters from MMOs, even up to, the report notes, ‘neopoints’ currency for casual virtual-pet website Neopets.

Speaking to Slashdot, eBay spokesperson Hani Durzy told the site that the decision, rather than a new policy to end auctions, was instead simply a follow-through of existing site policy that sellers must own the intellectual property being sold.

Durzy is quoted as saying the decision is intended to be “for the overall health of the marketplace,” and that item listings would be pulled without punitive action for initial offenders, withholding actual seller removal for repeat offenders.

However, a large amount of virtual currency and objects from games such as World Of Warcraft and Ultima Online were still available on eBay as of press time, raising questions as to how swiftly and comprehensively the massive site could crack down on those posting such items – or, indeed, whether an active removal process was occurring.


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Posted by SIM on January 25, 2007 gets legal nod from Second Life
The Associated Press
Thursday, January 25, 2007

A lawyer for the virtual world Second Life has responded to a parody with something that’s quite different from the usual corporate cease-and-desist letter.

Vancouver-based blogger Darren Barefoot had put up a one-page site,, that imitates the look of but promotes a real-life existence where you can work, reproduce and perish — all for free.

The site purports to answer frequently asked questions such as “Why can’t I build a dirigible with my mind?” That’s a dig at Second Life, where users with sufficient skill in three-dimensional modeling can build almost anything. The site includes a logo that’s a modified version of Second Life’s logo.

With a link, Barefoot invited cease-and-desist letters, the type lawyers often send threatening lawsuits if a site doesn’t pull down objectionable material.

The note from Ginsu Yoon, a lawyer for Second Life, started out with the legalese of a standard nastygram — internet slang for a cease-and-desist letter — but went on to say that “your invitation to submit a cease-and-desist letter is hereby rejected.”

Second Life representative Alex Yenni confirmed the authenticity of the note, which was delivered as a comment on Barefoot’s blog.

“Linden Lab objects to any implication that it would employ lawyers incapable of distinguishing such obvious parody,” Yoon wrote. “Linden Lab is well-known for having strict hiring standards, including a requirement for having a sense of humour, from which our lawyers receive no exception.”

The note even gives Barefoot a “nonexclusive, nontransferable, nonsublicenseable, revocable, limited license” to use the modified logo on T-shirts he sells.

Barefoot, whose day job is promoting software companies, wrote on his blog that the letter was an “enormous credit” to the company. He writes that he doesn’t hate Second Life, but has been amused by the amount of hype and attention the world has attracted.


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Second Sundance

Posted by SIM on January 24, 2007

Sundance holds screening in ‘Second Life’ for first time
By Michelle Meyers
January 24, 2007

PARK CITY, Utah–Never before had Sundance Film Festival audience members been part fox, used names like “NeoConD” and “Apparatchik,” or had the power to teleport away.

Marking a first for both Sundance and cyberspace, these viewers were avatars watching a feature-length festival film Monday from a screening room in the virtual world of Second Life.

“This is one for the grandkids,” said Henrik Bennetsen, who helped with the presentation in Second Life as part of the Stanford Humanities Lab.

The avatars were joined by real-life festivalgoers in a wired theater that allowed for a subsequent forum in which questions were fielded from both worlds.

The film, Strange Culture, is director Lynn Hershman Leeson’s unconventional documentary of an ordeal still plaguing Massachusetts artist and professor Steve Kurtz, who was there for the screening and question-and-answer session.

In 2004, as Kurtz was preparing for a Massachusetts Museum of Contemporary Art exhibition that would let audiences test whether food had been genetically modified, his wife, Hope, died suddenly of heart failure. Kurtz called 911, but when medics arrived, they were suspicious of his art supplies–including petri dishes with bacteria ordered online–and called the FBI, according to the film and news accounts.

Later, dozens of agents in hazmat suits arrived, turning his home upside down and then holding Kurtz as a suspected terrorist. Three years later, he still faces related mail and wire fraud counts and up to 20 years in jail, Kurtz said. A trial date has yet to be set.

Because Kurtz can’t talk about the events leading up to his arrest, Leeson enlisted Tilda Swinton, Thomas Jay Ryan and Josh Kornbluth to serve as avatars–in the more traditional sense–to interpret and re-enact the artist’s story. Actor Peter Coyote is also featured in the film.

Beyond the telling of the story itself, Leeson’s powerful film, which is being talked about as a favorite among festivalgoers, is about government practices and risks taken in the pursuit of social criticism. It’s also meant to reach out to those interested in helping Kurtz with his case.

The Second Life screening was invitation-only, Bennetsen said, because of concerns about overloading the system. Avatars were full participants in the Q&A, though at least one teleported away.


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IBM Island

Posted by SIM on January 23, 2007

Meet me in my avatar’s office
By Stefanie Olsen
Jan 23, 2007

PALO ALTO, Calif.–Employees of tomorrow will inhabit virtual worlds like Second Life to hold live weekly meetings with co-workers, catch up over lunch with financial advisers, and join friends on virtual shopping excursions after work.

That’s if IBM’s vision pans out.

“Success (in the future) will depend on how well you play the game, literally,” Doug McDavid, executive research consultant at IBM’s Academy of Technology, said here Monday night at an SDForum event titled “Virtual Worlds: Ready, Fire, Aim.”

“A generation (has) lived in these environments, and they’ll bring that perspective into the workplace. How this plays out is in the integration of work with this playful perspective,” McDavid said. He added: “This is an unstoppable phenomenon.”

IBM’s McDavid and Dave Kamalsky of the IBM Almaden Research Center were the main presenters at the nonprofit SDForum’s first meeting on the business of virtual worlds.

IBM certainly has a growing stake in the future of those online spaces. Evidence of the software giant’s commitment to R&D for virtual worlds came this week when it announced a new social-networking tool for the enterprise. Called Lotus Connections and expected out later this year, it aims to help people find colleagues of similar interests, among other things, in virtual worlds.

Still, audience members at Monday’s event expressed doubts that the corporate world, or the general public for that matter, was ready for a virtual space in which co-workers’ avatars, or digital self-representations, could be naked versions of themselves.

“The only thing that matters is what consumers are ready for,” one audience member said.

To be sure, if corporations widely embrace virtual worlds for business and employee relations, issues like security and privacy will surface. For example, residents of Second Life can represent themselves as dragons, the opposite sex or nudists. “That alone is a very deep issue–does there need to be a code of conduct for employees?” asked IBM’s Kamalsky.

“We’re looking at security and privacy, but obviously we can’t control the servers at Linden Lab,” he added. “But we try to disclose that up front in these service agreements.”

Yet IBM envisions many businesses and nonprofits thriving in virtual worlds. Marketers can use the so-called metaverses to project a cool image of products, and retail outlets can use them to sell real-world goods. Lawyers, accountants and real estate agents could also set up shop in virtual worlds to meet with clients informally.

Virtual employee meetings and business teleconferencing could also benefit from the fact that virtual-world avatars can express emotion and gestures, adding life to otherwise remote events. In fact, IBM’s McDavid said virtual worlds could ultimately be more of an affront to the airline business than teleconference services like WebEx. “A lot of this is a change of mindset,” he said.

McDavid compared the rapid evolution of virtual worlds to the early days of the Internet, considering that interactive virtual worlds have come from nowhere to draw interest from celebrity bands such as U2, news agencies like Fox and CNET Networks (publisher of, and academic institutions like Harvard University. “Virtual-world years are to Internet years what the Internet years were to real years. Things are happening so fast,” he said.

Interest from IBM, for example, has morphed from a handful of employees researching the sector in 2006 to the company owning more than 12 islands on “Second Life” and as many as 2,000 employees registered as participants.

Welcome to IBM Island

Last April, the company started buying just a few islands in Second Life, and then developing those internally. In the summer, it launched its Forbidden City and Wimbledon islands, along with a digital community called 3D Jam, where employees could “jam” about ideas with family, partners or co-workers.

In October, IBM unveiled its “Global Connections,” giving IBMers a virtual island where they can interact with company alumni. A month later, it bought 12 islands, including one that’s become a virtual test store for Circuit City. The store gives shoppers a lounge-like experience of the retailer, with displays for the iPod and couches for sitting and gauging the right proportions of a new TV. Shoppers’ avatars can then click to buy products at Circuit City’s real online store.

This month, IBM introduced a prototype store for Sears, as well as its own island, Lotussphere, where clients can interact with IBM employees about Lotus software. And next week, it will take the wraps off its Australian Open island, where onlookers can watch the trajectories of balls hit in the actual sporting event or choose to see the game from the vantage point of an individual player, according to IBM.

Why is IBM so invested in seeing the virtual world succeed? Because, McDavid said, the company wants to attract and keep talented employees.

A generation of kids reared in virtual worlds like Second Life or MTV’s Laguna Beach are eventually bound for a work force that will need to cater to their experiences by creating virtual worlds for the corporate intranet.

Economically, too, the world is migrating to a services economy, McDavid said, and it’s all about people working together in these open, collaborative ways.

“The turning point has to do with the balance between individual and social interests within capitalism,” he said. “It is the swing of the pendulum from the extreme individual…to giving greater attention to collective well-being.”


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Second Job

Posted by SIM on January 22, 2007

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.
By Katie Benner, Fortune reporter
January 22 2007

NEW YORK (Fortune) — There’s been plenty of hubbub about Second Life and the limitless possibilities offered in a virtual reality where a banker can become a virtual filmmaker, a housewife can be a virtual business tycoon and 46-year-old man can be a virtual 23-year-old vixen. The focus has been on people making real money in an online virtual world, but for those who have heard of eBay (Charts), the idea that everyday people can make money on the Internet isn’t so revolutionary.

What Second Life brings to the party that few platforms or games before it have is a chance to blend the boundaries between reality and virtual reality, a possibility that has helped boost the number of registered accounts to 2.6 million. Walking around the virtual landscape, my travels included the fanciful (flying), the more stolidly real (political debate) and something in between (a questionable trip to an island called “Amsterdam”).

And just as the way we surf the web changed, the way that corporate America does business has changed in this middle space. Case in point: the most radical dotcom 2.0 recruitment wave is happening in virtual reality thanks to Second Life. Instead of posting a resume on that will hopefully net a flesh-and-blood job interview, your avatar can be interviewed and hired all within Second Life, often for jobs possible only in virtual reality.

“People who have been in SL since its inception might not be professional content developers, but they have become experts,” says Brandon Berger, senior strategist at OgilvyInteractive’s Digital Innovation unit. Hence, Ogilvy has hired a lot of people directly from Second Life to execute projects for the big name clients who have worked to be in Second Life.

The same goes for Electric Sheep Company, a 27-person operation that brought Starwood (Charts), Reuters, musician Ben Folds and Nissan Motors (Charts) to SL. The core team was plucked from Second Life, not from a pool of PR applicants or professional computer programmers, says Gif Constable, head of business development. “We hired people we had never met in the real world because we’d spent a year looking at the work they produced within Second Life, and the way that they approached the community,” says Constable. “To a certain extent we knew each other… We knew that in Second Life, they were the best.”

“This is like the first dotcom boom, when the forward-looking companies were all building websites because they understood that people would someday shop and pay bills and interact online. Someday we’ll shop in virtual bookstores…We’ll all have avatars,” says Berger.

Enter the gamers and self-made expert builders who pave the way in a world that, while intriguing, is not easy to navigate. Avatars are also pitching agencies for work, says Joseph Jaffe, founder of Crayon, which he describes as a mash-up of consulting, PR, education and advisory services. The company, which has done virtual work for Coca-Cola (Charts), also hired from within Second Life. Jaffe estimates that about 20 avatars have come knocking on his door, and that nothing pleases him more.

“We are a small community. Someone sent a resume and wanted to meet in SL to discuss job prospects,” Jaffe says. “When we met, I realized that we had met before in Second Life when the senior editor of the Harvard Business Review gave a talk on marketing in Second Life.” As more of real life pushes into Second Life, corporations and even individuals will tap long-time denizens and gamers for their skills, and Berger says more work is coming. “We will start to see the need for maintenance, including virtual shopkeepers who need to man the virtual store.”

If the pontificators are correct, we may all need virtual suits for job interviews.


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Second Income

Posted by SIM on January 21, 2007

A second income on Second Life
Entrepreneurs sell virtual products in the online world – but the money they make is very real.
By James Turner
January 22, 2007

“Blaze Columbia” is, by any measure, doing well with his line of designer clothing. He’s on track to generate more than $100,000 in annual profits, barely a year after launching his business. And that’s in addition to a first career as a professional photographer.

There’s just one big difference between the clothing that this Missouri resident produces and that of any other top-of-the-line dress or business suit: His don’t exist – at least not in the physical world.

“Mr. Columbia” is an in-game name for a player on Second Life (SL), a Massively Multiplayer Online Role-Playing Game (MMORPG).

Columbia, who requested that his real name not be used because he wishes to keep his “real life” and “online life” separate, sells virtual clothing to other players, part of a purely electronic economy that’s redefining how some think about the nature of money.

In a traditional sense, the word “economy” tends to evoke images of huge factories churning out products that are bought by consumers, who spend the money that they’ve earned by their labor – perhaps working at a factory. With the advent of the virtual economy that exists within SL, however, the “product” has been so far removed from a physical entity that it’s unclear what value it holds.

SL claims more than 1 million users, allowing its “citizens” to mold their avatars (online representations) into whatever form they choose – from mundanely human to exotic animal-human hybrids – and interact with other members.

The website has already generated publicity as a place for distance learning and virtual concerts – and notoriety for its “adults only” venues and instability. But there’s also a powerful and thriving economic engine whirring beneath its surface.

The official SL currency used for in-game commerce is the linden. Linden Lab, the privately held company in San Francisco that operates the website, currently sells the currency for about 275 lindens to the dollar.

In virtual reality, virtual realty

One of the most common first purchases involves the massive land boom engulfing this virtual world. Linden Lab offers new users virtual land priced at well below the market rate inside the site. Some savvy real estate brokers have quickly purchased land from new users, still below the going rate, and resold it at a hefty profit. Deals are made using the game’s built-in real estate market. In fact, one broker from Germany, whose real name is Ailin Graef, claims to hold more than 275 million lindens in SL assets, the equivalent of $1 million.

Aside from real estate, an unknown but growing number of SL users have been making a living by delivering products or services to the more than 800,000 accounts active on the system in any two-month period.

According to Columbia, starting an SL business is much like doing so in the physical world. “There are many small differences, but it’s so very like running a real-life business,” he writes in a e-mail. “Marketing, branding, and good business practices are just as important as a good product. One major difference is that things move lightning-fast in SL. And the customer base is always new.”

Doug Bassett (in-game name “Doug Latrell”) also operates a successful SL business. As a senior technical instructor for Thomson NETg, a training company in Scottsdale, Ariz., he teaches courses that involve Cisco and Microsoft technologies. Mr. Bassett has now extended his company’s presence into SL, offering its courses in the game world. Revenue from in-game sales of courses is more than $10,000 a month and growing, he says.

A major factor in opening an SL branch was the “coolness factor and a unique way of meeting people that we wouldn’t normally meet,” he says.

This same “coolness” has led Dell Computers, Nissan, and Pontiac to offer virtual versions of their products for in-game use by players.

For now, only virtual products are sold on SL, but Dell plans to let SL users buy real-world versions of its SL products sometime in the future, perhaps as early as this summer. At the Consumer Electronics Show, held earlier this month in Las Vegas, IBM unveiled online stores for Sears and Circuit City that it developed on SL.

Virtual audits, anyone?

But not everything is sunny in the SL economy. The question of taxes on SL income is becoming a hot topic. The US House Joint Economic Committee has recently undertaken an investigation of the entire question of virtual economies, according to Dan Miller, a senior economist working for the committee. An avid user of virtual worlds (notably the most popular MMORPG, World of Warcraft), Mr. Miller is studying how tax policies might be adjusted to account for this new digital world. He plans to issue a report this spring.

According to Miller, some things are pretty clear. “The income tax already applies to income that is removed from virtual economies,” he writes in an e-mail – as in when an SL user converts lindens back into US dollars. But the subject of taxing assets inside SL is more controversial, he says. “Based on our initial assessment of virtual economies … virtual worlds need greater clarification, not additional taxation,” he writes. “Governments have a hand in regulating many aspects of physical economies to one degree or another, while the government’s presence in virtual worlds is relatively minor.”

Some SL businesses already may be operating outside current law. Casino gambling and sports betting are pervasive in SL. The fact that bets are made in lindens, not dollars, won’t shield gamblers from possible prosecution under federal laws banning Internet gambling, says Jaclyn Lesch, a spokeswoman for the US Justice Department. “Regardless of how one pays for the bet, it is still a bet if it involves something of value. While not a credit card or cash, [virtual currencies] would still be a thing of value” especially considering the fact that they are later redeemed for cash.

As for Linden Lab, the company claims that it is not responsible for illegal acts on the part of users, just as Internet service providers like AOL aren’t responsible for actions committed by their users.

“Second Life is a service, a platform, much like the Internet,” says Catherine Smith, director of marketing for Linden Lab. “As with the Internet, users are responsible for ensuring that their activities fall within the bounds of the law within their local jurisdiction,” She points to a “terms of service” statement that SL residents must accept, which prohibits any action that violates a law or regulation.

Aside from staying on the right side of the law, SL entrepreneurs must also face up to the possibility that their very world could end suddenly. If Linden Lab were to close up shop, the entire SL economy would disappear in an eye-blink. Even if Linden thrives, SL can sometimes be an unstable place to operate a business. Around New Year’s, the system was plagued with numerous technical failures that took the world down for hours at a time. Digital vandals have been running rampant on SL, crashing large regions of the system with self-replicating pests.

Columbia is philosophical about the future. “We are dependent on the success of Linden Lab.” he says. “I really do think we are digital pioneers in this world, and that there are a lot of things to work through. But SL or some form of a 3-D world will keep going because it really is a very unique and enabling place for many people. Whether a business can be maintained throughout the years, or even one platform of a 3-D world, is something I think can be done, but it certainly won’t be easy.”

Second Life economics 101

For those considering life as a virtual entrepreneur on Second Life, the first step is to open an SL account. Basic ones are free, but if you plan to conduct any form of transactions, real money is involved.

One of the major expenses in SL is land. Those who want to buy “mainland” land, must upgrade to a premium account ($9.95 per month) and purchase the land itself, which can be quite pricey.

Currently, one square meter of mainland land can be had for about 12 lindens – the website’s virtual currency. A typical 512-square-meter plot costs about 6,000 lindens, the equivalent of $22, based on the current exchange rate of 275 lindens to the dollar.

There is also a monthly “tier” charge, depending on how much land you own. The fee ranges from $5 for the lowest tier to as much as $195 per month for an entire region.

Users can also lease land on a private island, which doesn’t require a premium account, but does require monthly rent payments to the island owner.

Once a business gets going, a businessperson can use the lindens they earn to fund in-game expenses.

Of course, they can also convert their lindens back into dollars (for a 3 percent service fee paid to site-creator Linden Lab).

Apart from the sale of “manufactured” goods, people also earn lindens by providing services, which can range from serving as staff in stores to working in the thriving escort industry, a polite term for virtual prostitution.


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