Second Life’s Conflicted & Challenged Economy

It’s obvious Second Life’s  economy is both conflicted and challenged.  A quick review of Second Life (SL) history and Group Tools reveals the Linden Labs (LL) founders had an egalitarian, quasi-socialist vision for the SL economy.

SL would be a pastoral wonderland of equality, governed by the benign royalty of the Lindens.  The Lindens would provide this “nirvana” of creativity and “commerce” in exchange for “token” tribute, paid in the form of premium memberships and tier.

What happened next was a classic example of free market economics run a muck.  The virtual pimps, sex peddlers, gambling interests, hustlers and crooks moved in and began making/taking money out of the system as fast as it came in.

Linden Labs laissez-faire attitude towards these commercial uses of the platform, along with ZERO zoning regulations, generated rapid short term growth, but sowed the seeds for many of the problems faced by the SL economy today.  Many of those making profits during the SL boom had little/no concern for the long-term stability of the economy, virtual quality of life or the welfare of SL’s citizens.

Without the vigorish profits associated with gambling and faced with a rapidly deteriorating real estate economy, the  glut of freebie products that stifle legitimate sales and the burden of unprofitable (free) accounts, LL faces serious fiscal challenges.  Add to these economic challenges the overall instability of the platform and the capricious behavior of LL regarding land pricing and it makes SL a tough sell for business.

It’s widely believed there are people in SL who have made money in virtual Real Estate.  How many actually did or continue to make money is a matter of pure conjecture.  Like so many other aspects of SL, there is no solid data from which to draw informed conclusions.  The most thorough and some say daming analysis of Second Life’s economy, titled “Second Life: Revolutionary Virtual Market or Ponzi Scheme?,” was written almost two years ago, when hype surrounding SL’s use as a business platform was nearing its peak.

Matthew Beller wrote in “the Coming Second Life Business Cycle,” “If Linden’s goal is to create a setting for a stable, growing economy that will provide the most satisfaction to the most residents, it must avoid the pitfalls of interventionism that plague real-world economies.”

Real business people, as opposed to hobbyists, who want/need to generate a true Return On Investment (ROI), will NOT look at SL as a serious business platform, until it offers the following:

1. A truly “Free-market” economy with L$ tied to negotiable assets and free from artificial manipulation by LL.
2. Timely and accurate statistical data on all facets of the economy, including land holdings & sales, transaction volumes, etc.
3. A system of positive identification and fraud prevention, similar to eBay/PayPal, for all those who wish to sell goods or services within SL.  This must be coupled to a procedural mechanism that allows LL to freeze and/or force the forfeiture of monies associated with illegal activities, including content (IP) theft.
4. A “business-class” infrastructure that provides a stable and reliable platform for conducting business.

Without these elements in place, SL’s future will likely mirror the demise of AOL.  A community filled with a steadily dwindling number of users who have difficulty “letting go,” despite having better options elsewhere.  The rest of us will take our quest for a Virtual World that can be used as a platform for REAL business plans elsewhere.

Live Your Dream

Just as long as you don’t have neighbors, that is.

For 3 years now I have rented land off and on, here and there all willy nilly like because eventually I end up with neighbors I can’t stand.  Some people will blame this on my uncanny ability to seem like a huge bitch without saying a word.  Others may blame this on my ‘opossum stance’ where I do this finishing move.  Its complicated.  See when someone starts talking to me that I don’t want anything to do with – I go silent instantly.  Even if everyone else is talking I just stop and wait for them (the person I don’t want to talk to) to go away. 

Some may call this cowardly and downright stupid – but it works people.  Noobies are great for walking up to anyone and talking, and ya know sometimes I just don’t want to talk.  So I stand there silently waiting for them to go away.  I might even add a bit in my profile that says “sometimes I am AFK so don’t take my silence for being rude” even though I’m totally being rude!  Oh dear I’ve gotten off track.

Neighbors.  Grid love ’em they can make things interesting.  I’m sure everyone has come across nearly every type of neighbor (and if you say “I’ve never had a neighbor because I’ve always had an island I swear I’ll throw dirt at you!”) and if you haven’t let’s assume you have. 

Not everyone that buys/rents land near you is going to plop out the same style house/shop that you have.  No one who starts living next door to you is going to think its very cool when you have about 30 or so people over to yours for a party (or filming session).  But what is someone supposed to do who refuses to buy an island (lets face it: that shit is expensive) and can’t restrict themselves to either having a shop or having a house, but not both!

Crack Shack.  Yes its as simple as those two words.  If you live in a region that doesn’t have this strict ass shit about what your house has to look like – plop down a crack shack.  People will eventually get pissed off and move.  It really works.  I’ve watched it happen!  As a matter of fact its even happened to me and at the time I didn’t recognize how damn brilliant of a tactic it was!

I guess I should really say that I don’t hate everyone in SL even though sometimes it seems that way.  I also don’t hate every neighbor I’ve had in SL.  I’ve only ever hated the ones that fill my speakers with constant gestures and have only been in SL for a month or two and think they know everything.  I’m not prejudice against noobs, I’m really not.  I just wish that some of the noobs I meet would bow down more ya know?  Give me some respect! (I’m kidding ok?!)

My advice?  Oh yes!  Next time you have SlaveMaster AssChowder as your neighbor – turn your nice little villa of a place into a crack shack.  When he comes over without a shirt on with his long, flexi, Fabio-esque mane – whip out a prim baby that cries non stop.  Owning land is war, people!  Are you going to hide in the trenches are will you be victorious?!?