A virtual world that offers its ‘residents’ the opportunity to be whoever and whatever they like, whenever they like
There is nothing new about selling dreams. Products and services that promise to make us more attractive, more powerful, or more wealthy have always been big money spinners. So the success of a virtual world that offers its ‘residents’ the opportunity to be whoever and whatever they like, whenever they like, should come as no surprise. What is unexpected, however, is its capacity to help some of its residents make money. Almost two million people have started lives in the virtual world ‘Second Life’, creating pixel perfect alter-egos (or avatars), meeting people, building dream homes, buying dream cars, entertaining guests, and setting up businesses – and some of them are turning a profit.
According to Linden Lab, the creator of Second Life (SL), around 500 people make over $500 a month, 29 are making over $5,000 a month, and two are making in excess of $25,000 a month. Anshe Chung, a Chinese-born language teacher living in Germany, has built a virtual property business in SL: in 2006 she became the first person to achieve a net worth exceeding $1m from profits earned entirely in SL, and her success has crossed over into real life (or RL, as it is called in the virtual world). Although SL has its own currency, the Linden dollar, this can be bought and exchanged for US dollars; so hard cash does change hands.
SL-related businesses include The Magicians and The Electric Sheep, which specialise in helping others to exploit the virtual world. They create SL simulations to help clients train medical staff, use SL to provide language coaching, or assist large multinationals to establish an SL presence. Although a lot of early entrants are trying to get public relations coverage, SL can also offer unique business opportunities. For example, Adidas has an outlet selling footwear in SL, and because the avatars who wear its a3Microride shoes can actually bounce around a lot more than they can without them, the company can exaggerate its brand values and strengths in a way that is not possible in RL.
Accountants are also making their virtual presence felt. The US accountancy firm KAWG&F is offering accountancy services including bookkeeping, budgeting, and business consulting, and is setting up a Second Life Chamber of Commerce. At the moment, there are very few rules governing business in SL, and a lot of the people starting up there are first-time entrepreneurs, so the firm is keen to help them get set up and grow, establish a dialogue for businesses, and create a directory of members.
The place certainly has a lot of business potential. A basic account in SL is free: Linden Lab makes its money by taking a small cut on the sale and exchange of Linden dollars, and by leasing virtual land at about $20 per month, per acre. At the moment, SL is about 100,000 acres, but it’s expanding at around 8% each month. Its annual gross domestic profit is an estimated $64m, and this is also growing. So student accountants wanting a place to flex their fledgling entrepreneurial muscles may want to give Second Life a second look.