Economic woes extend to Second Life
by Kyle Orland 
{ Jan 25th 2008 at 4:00PM }
Everywhere you look, it seems there's news of some real life business jumping into the virtual world of Second Life. Car companies, HR firms, clothing makers; you name it, it was being sold on the virtual frontier. But, as PRI's Marketplace reported earlier this week, many businesses are having trouble turning their virtual storefronts into real money.Despite the relatively low overhead costs of operating a Second Life business, companies like Starwood Hotels, AOL and Wells Fargo have been leaving their digital outposts in recent months. The problem of marketing to avatars was effectively summarized by reporter Janet Babin as "too many 7-foot-tall winged creatures flying around with no need for American Apparel's cotton T-shirts."
Meanwhile, the Wall Street Journal is covering a Second Life banking scandal that could rival the sub-prime mortgage crisis for SL citizens. It seems some questionable banking schemes has led Linden Labs to shut down over a dozen virtual banks, causing a run on funds over the past few weeks. Makes us glad we kept our Linden Dollars under the virtual mattress.
Read - Business exodus on Marketplace
Read - Banking scandal on Wall Street Journal
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Reader Comments (Page 1 of 1)
The Fuzz 53 @ Jan 25th 2008 4:05PM
This is too funny.
GreyFox @ Jan 25th 2008 5:09PM
I think everyone not playing that game is laughing a good laugh right now.
Trickob @ Jan 25th 2008 4:11PM
maybe people could use their tax rebates in second life... maybe the government will give VIRTUAL tax rebates in second life!!!
Jerk Face @ Jan 25th 2008 4:16PM
Second Life is so lame.
paragraph @ Jan 25th 2008 4:29PM
almost as lame as real life
ThornedVenom @ Jan 26th 2008 2:09AM
Silly rabbit, everyone knows that furries don't exist in real life. ;P
NATO_Duke @ Jan 25th 2008 4:17PM
I just dont get the draw to this kinda virtual world. Seems very sad to me.
paragraph @ Jan 25th 2008 4:29PM
It's WoW for people who are too cool for WoW
Norm @ Jan 25th 2008 4:32PM
Is second life some kind of video game or something?
Zootittles @ Jan 25th 2008 4:34PM
Fuck Second Life.
In the ear.
With a stick.
Zorink @ Jan 25th 2008 5:01PM
Can't you do that in game?
playwhutyalike @ Jan 25th 2008 4:36PM
Hey, I just bought a virtual T-shirt with real money!
I've never understood buying virtual shit at all. But hey, spend your money on whatever I guess it is a free country. Until you have to buy something. That isn't real. Ummmmmmm.....
paragraph @ Jan 25th 2008 4:40PM
I agree, it's one thing to add functionality, or even coolness, but would you pay 600 MP for a new tophat for slash in guitar hero three?
playwhutyalike @ Jan 25th 2008 5:13PM
At my old job there were 4 guys that played Diablo and would talk about stuff they bought on eBay for that game. They would get so pissed when I gave them shit about it. "Oh, you bought some new armor huh? Why don't you bring it in so I can see it?"
Once they got pass me being an asshole, and I got passed their purchases, we all became pretty good friends.
Top hat for Slash, eh? *pulls Glock out of drawer puts barrel in mouth*
KirbyMeister @ Jan 25th 2008 5:20PM
I play SL, but I'm not one of those idorts that would buy a virtual t-shirt for any appreciable sum of real-world money. I just build stuff and chat. You could consider it a sandbox MMO, in the same vein as the HL2 Garry's Mod except in an alternate universe where Source has early-launch-title PS2 graphics and was coded by four year olds. Also it crashes twice a day.
But you get to build/make anything you want.
Dustin @ Jan 25th 2008 4:48PM
I totally sent this in to Joystiq's tip line.
Anticrawl @ Jan 25th 2008 6:11PM
Yeah Joystiq is becoming Kotaku. First the post articles about kiddy porn games on the DS that could potentially hurt the public view of gaming if the wrong fox moron drops by and now they're getting comfortable not crediting the little man. I stopped submitting to Kotaku because they would take my exact story with photos I took on MY camera and delete my name and post it as their work. After I had combed through a couple hundred patents and found a great deal of info on the current systems before they were released and recieved no credit I stopped submitting my info to anyone all-together and posted my own blog so I could have proof it was my story or I was the informant.
Dustin @ Jan 25th 2008 7:00PM
Well, I'm not upset or anything. I know that a lot of blogs have big problems with exactly what you mentioned, not crediting the little man, etc...
I was more just being sort of a dick and pointing out that I am apparently superior to everyone else since I listen to Public Radio.
Joystiq has its quirks just like any site, but it stands out as being the greatest of the greats, in my honest opinion. I
Dustin @ Jan 25th 2008 7:06PM
O SNAP! I tried to make the heart symbol and got my comment cut off.
Anyways, I also wanted to mention that I wouldn't be surprised if other people sent this in as well.
Also, Anticrawl - if you see this, reply with your blog's URL!
Anticrawl @ Jan 25th 2008 8:00PM
Oh yeah Joystiq is the best of the best, but they are slowly slipping. Then again so is every other gaming website.
Nate @ Jan 25th 2008 5:55PM
Someday, someone will realize that Second Life isn't newsworthy anymore.
Burnt Meatloaf @ Jan 25th 2008 5:55PM
Hey, look! A massively multiplayer... er, game... where people make their own, original content. Let's try to sell them cookie-cutter merchandise!
Sounds like a firm business plan to me!
ThornedVenom @ Jan 26th 2008 2:11AM
Linden Labs earns money through selling virtual currency.
They sell their virtual currency for higher, they reconvert it into real money for lower.
Burnt Meatloaf @ Jan 26th 2008 7:57AM
"Car companies, HR firms, clothing makers"
Avarice @ Jan 25th 2008 5:58PM
B-but... it's a market made up of virtual sex toys for furries! How could it possibly fail?
Anticrawl @ Jan 25th 2008 6:30PM
Don't forget shitloads of shemales or hermaphrodites or whatever they call themselves. I played for a couple of days until I ran into a clan of tribal amazon dickgirls.... that was fucked up. What's worse is I was playing on my laptop while I was on my lunch break in a biomedical research center. Thankfully no one was around to view all the virtual she-cock... god.
Mr.ESC @ Jan 25th 2008 6:03PM
This is just too full of Win.
Rofl
Evan @ Jan 25th 2008 6:16PM
People play Second Life because they want to escape to a fantasy world full of fantasy things. Why would someone buy a Toyota Yaris, when they can ride a two-headed, eight-penised dragon!
playwhutyalike @ Jan 25th 2008 6:37PM
The question is, what side do you ride on?
BananaBoat @ Jan 25th 2008 6:20PM
They've been artificially inflating their numbers ever since the beginning. It's nice to see that the boat is a'rockin, and maybe it's about to come down. Then again, the furries will probably keep it afloat at all costs.
ThornedVenom @ Jan 26th 2008 2:13AM
Second Life is a nice experiment, in my opinion.
But it makes us wonder about the amount of structure an MMO needs: too much is too restrictive, not enough is Second Life.
SGT Grumbles @ Jan 26th 2008 9:08PM
Is it just me, or does that picture look suspiciously like goatse?
Aaron @ Feb 14th 2008 2:32PM
The exodus of businesses from Second Life is overstated. While some companies have departed in highly-publicized ways, others are deepening their involvement in the virtual world. Industry boosters hail SL as a new utopia, while critics are quick to announce its death at the slightest sign of trouble. We need to move beyond the polarized, hype-filled rhetoric to focus on actual substance.
Why do some businesses fail in SL while other businesses do quite well? As the landscape matures, there are enough case studies to actually answer this question with substantive data. Over on the Elastic Collision blog, the white paper "Leave your lifeboat at home: Seven tips for real-world businesses in Second Life," attempts to answer these questions. Check it out at: http://www.elasticcollision.com/whitepapers.html
[Disclaimer: I am the author of the paper and a co-founder of Elastic Collision. Though obviously somewhat biased, I suspect that many Joystiq readers will find the report to be useful or at least provocative. Thanks!]