The virtually real economy in Second Life

If you haven’t come across it already, Second Life will change your view of the Web. Second Life is a virtual world populated by avatars with interesting names and an increasing number of merchants, properties and, more importantly, big brands.

It started off almost as an escape and an alternative reality for people to visit and play out a second life (hence the name) and it has become so popular and so versatile that people like you and me as well as large companies are beginning to see its potential as not just another place to meet and greet but also as a new market for goods and services. One of the developments in Second Life that has perhaps been most conducive to this evolution is the ability to convert the currency used in Second Life, Linden Dollars, into US Dollars. Together with the ability to create items (anything from clothing to properties) of value, this currency exchange means that commerce is not just possible, but thriving.

As an illustration of this economic boom, Om Malik has posted a story about a Second Life avatar that is worth over $1 million. The avatar, Anshe Chung, is operated by a small team of human beings and has been steadily buying up properties on Second Life, sprucing them up, arranging to have the properties rezoned where necessary and then subletting the properties. Her properties apparently comprise roughly 10% of the virtual world’s landmass and have been accumulated with the consent of Second Life’s creators, Linden Lab. Actually confirming Anshe Chung’s virtual wealth (and her owner’s real life wealth) is a little tricky because it turns out that much of the work is being done by other avatars working for her and the property values are based on certain assumptions.

I mentioned that a number of companies have launched themselves into Second Life. Given the obvious value in being in such an innovative market, this shouldn’t come as a surprise. These companies include Reuters, Adidas and Sun Microsystems. Even General Motors recently opened a virtual dealership in Second Life. For a review of many of the companies and people who have made a home for themselves in Second Life, take a look at this review on Coolz0r.

Second Life is a growing economy which you can access using your browser the Second Life client and it has almost limitless potential. There are few of the limitations imposed by a physical world and only economic considerations to guide further growth in this virtual world. Soon the question will be whether you can afford not to have a presence in Second Life (or perhaps, whether you can afford to)?

Tags: second life, anshe chung, linden lab, property, economy, linden dollars