If you’re not familiar with the virtual world of SL, and even if you are, you need to keep reading. SL offers the potential (and I stress potential) to make a lot of real world money. Like blogging, the big bucks will go to a select few, though many more can still make a respectable amount of money in SL. I’ll briefly describe what SL is and then describe how some are making significant money in this virtual world.
What is Second Life?
Second Life is an online virtual world that is part game, part elaborate chat room, and part commerce. The initial account with Second Life is free. Once you download some software, you are given an avatar (3-D graphical figure that is a visual representation of you within SL) that you use to explore the SL world and interact and chat with other members of SL. I recently joined SL and named my avatar, Boogonie Bashly (I have a strict “don’t ask don’t tell” policy when it comes to naming conventions).
Now if you’re like me (or my wife), at this point you’re thinking something along these lines: “SL is the dumbest most pathetic thing I’ve ever heard of, and anybody spending any time in this virtual world must lead a very sad existence.” Well, before you pass judgment, consider the following:
- As of the writing of this post, SL has more than 11 million residents
- There are over 800 million square meters of developed virtual land (areas to explore)
- About $7 million (that’s actual U.S. dollars) are exchanged between residents each month (more about this below)
- Reuters has a full-time reporter, covering Second Life. The reporter has his own Avatar and interacts within the virtual world (no, I’m not joking.)
- Real-world companies are developing a presence in Second Life, including General Motors, and IBM.
- Second Life has already produced its first real-world millionaire, Anshe Chung.
Linden dollars–virtual currency
With a Premium Membership Plan ($9.95/month), residents receive a stipend of L$300 per week.SL residents buy and sell goods and services using a currency called Linden Dollars (L$). Linden Labs, the creator of Second Life, implemented L$ to facilitate the exchange of goods and services within the virtual world. Residents can obtain L$ in several ways:
- Residents can buy L$ with real world money at the LindenX, Second Life’s currency exchange. Currently, $1 buys about L$250
- Residents can work for money within Second Life for other residents (more about this below)
- Residents can start their own business selling goods or services (more about this below, too)
So what would you do with all these L$ you earn? You can buy clothes for your Avatar. You can rent or buy land from other Residents and build a home or a store. You can buy virtual cars and boats, furniture and jewelry. You can subscribe to magazines published by other residents. You can hire an architect to help you design your virtual (or “in-world” as Residents say) home. You can partake of in-world entertainment such as amusement parks (yes, some residents have built virtual amusement parks). And you can also sell L$ for real money, which brings us to the focus of this article.
How can Second Life residents earn real money?
Making real money in Second Life is simple, in concept. Simply offer goods or services that Residents want to buy. Accumulate L$ and then exchange them for real money. Before describing how Residents have actually gone about doing this, you should understand two important facts.
First, There is a significant spread in the price for buying versus selling L$. As of the date of this article, buying L$1000 costs about $4.05. Selling L$1000, however, nets just $3.51. The buy/sell prices of L$ do fluctuate depending on supply and demand. Much like a central bank, Linden Labs has several mechanisms with which to control the price of the L$. You can read more about this function The Second Life Economy article posted on Second Life blog.
Second, making money on Second Life is a lot like making money with a blog. While a select few will make significant money, most will not. Linden Labs publishes statistics on the amount of money Residents make, and in October 2007, 157 Residents made in excess of $5,000. Just under 2,000 Residents made between $200 and $500. Here is the chart showing all of the available data through October 2007:
Working for others: You (i.e., your avatar) can work for other Residents in-World. For example, some entrepreneurs will pay you to simply hang out at their business. Why? They want to show a lot of activity around their establishment to build interest and a community. Called camping, wages are miserable at just a few L$ per 20 minutes. I mention this aspect of making money because, if you start a business, you may need to hire campers to generate interest in your new venture.
Anshe Chung Studios: Perhaps the best know SL real estate mogul, Anshe Chung is purportedly the first SL Resident to reach real life millionaire status. Anshe Chung Studios now employs 80 people full time and builds entire communities.Develop real estate: Real estate in SL has the potential to generate substantial income. It requires the ability to design and build structures within the SL environment, or you can pay someone to do the design and construction work. You can develop property for resale or for rent. Here are links to some SL real estate developer websites to give you an idea of some are already doing:
- Livingston Properties: Sells prefabricated homes ranging in price from L$400 to L$900.
Become a real estate agent: The SL world can be a bit overwhelming at first. Like moving to a new town, you don’t know the up and coming neighborhoods from all the rest. To find out where the best properties are and whether the asking price is reasonable, some are hiring in-World realtors. Realtors can also help you sell your property. Here are few already providing this service:
- Livingston Properties: They charge the seller 5% of the transaction price.
- SL Real Estate Rentals: This site provides listings of available rental properties.
Publish a newsletter: There are several newsletters in print, but more are sure to follow. Some charge for the newsletter while others generate revenue through advertising.
- Metaverse Messenger: The newsletter is free and comes as a pdf file.
- SLNN: An online SL news site.
- The Avastar: Another pdf formatted magazine geared described as a “professional tabloid newspaper.”
These newsletters may provide an effective avenue to advertise your new business venture, too.
Start a credit card company: Believe it or not, SL already has its first virtual credit card, called the Metacard. Offered by FirstMeta, it allows its card holders to charge in-world purchases. In three flavors, basic, gold and corporate, the Metacard works much like a real world credit card. Interest is charged at 0.13% per day (for the gold card), there is a credit limit, minimum payment requirements and over-limit fees. To qualify, you must have a real world credit card that can be charged in the event you don’t pay your Metacard bill.
Open a boutique: There are countless boutiques throughout SL that cater to every imaginable taste. One aspect of marketing that is important to understand is that many of these stores have a presence in both SL and on the web. Here are a few websites to give you an idea of the competition:
- Giorgio Armani: Yes, you will have to compete with the real world of high fashion. Armani opened its SL store just last month.
- House of Nyla: A real world fashion designer seeks brand awareness through an in-world boutique.
Banking: Several virtual banks have opened in Second Life that accepts L$ deposits and make L$ loans. At the moment, these banks are not regulated like real world banks, and some banks have already collapsed (see below).
- L&L Bank and Trust: As of this writing, L&L banking activity had been halted because its in-world ATMs had been hacked. The latest report suggests that L&L will be back online shortly. This underscores an important point about doing business in a virtual world–treat it like a real world business. The virtual world can make you real money, but it can also create real headaches and real legal issues.
Run a stock exchange: Second Life now has an exchange called the World Stock Exchange. The WSE has listing rules, IPOs, analysts and a trading room. The dollars being traded on a daily basis are relatively small, but the potential for growth is significant. As an aside, I suspect that real world regulation of the exchange (and banking) will become a reality if Second Life continues to grow in popularity. Although it has the feel of a game, real money is at stake, which eventually will attract regulators. One fascinating issue, though, is which regulators. The virtual world of Second Life spans the real world globe.
Wedding planner: Avatars can get married in SL. Never mind if the people behind the avatars are married in real life to real spouses who have real problems with this. And where there’s a wedding, there’s a wedding planner.
Tattooist: Many want tattoos for their avatars. While you can create a tattoo for yourself (here’s a how-to guide), you just may want to hire a professional. One such establishment is Gina F Designs, which can be found in the world at Jernberg (238,90) (main store) and Paradise (155,57), which are coordinates used to travel to specific locations within SL.
The list of money-making ideas could go on forever, but the above list gives you a good idea of the range of opportunities. As I noted at the start, making large amounts of money in SL is, like the real world, unlikely. But it is possible, as is making enough money each month to make it worth your effort.
If you’ve tried to make money in SL, whether successful or not, let us know what business you pursued.