The phony economics of Second Life | The Register — This essay is outstanding and accuses the business press, in particular, of being suckered by a specific PR agency to boost the Second Life mystique. Perhaps the best actual review ever done on the software.
We can only speculate on why business journalists have inflated Second Life’s importance. Perhaps it fulfills their predictions that commerce will become “weightless” and move beyond government control. Or, it’s simply a great place to have a mid-life crisis – certainly a safer one than the saddle of a Harley or the au pair’s bed. But what is not in doubt is that they haven’t let the facts poop their party.
But, what of those ordinary users drawn to Second Life by the promise of a new economy where new millionaires will be created? They are expected to invest real money and then conduct their “in world” transactions in Linden Dollars.
Linden Lab also has been careless with enforcing property rights, the foundation of a typical capitalist economy, as entrepreneurs have seen their work cloned within seconds. Jennifer Granick, of the Stanford Law School, has written that Second Life users’ rights are unenforceable without the expense of a federal lawsuit.
Finally, after the US’s recent crackdown on internet gambling, in a Linden Lab statement on the legality of Second Life’s many casinos, the status of Linden Dollars was at last explained:
hat tip to Andrew Orlowski
Excellent post. I’m glad I’m not alone in thinking this ‘fad’ is nothing more than a rip-off.
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Did Orlowski write this? It seems too coherent to be Andy’s work :), and the byline is Shaun Rolph.
#1 – James, SL may well be a fad… But virtual environments are not, social networking is not, and things aren’t a “rip off” just because you aren’t interested in them and choose to apply a condescending attitude toward them.
SL isn’t a fad, it’s been online for at least 5 years now, MMOs have been around for the past 10+ year which also had virtual economies than lended it self to real cash. Like in a real economy, the value of Linden$ has declined slowly over those years, but not as quickly as the US dollar has in the past 2 years.
The author is “not wrong” on many points in the article, but he obviously has not been in the game for that long. For example, I am quite sure there are more than 3000 players making a profit in Second Life, either that or I am one of the lucky 3000 mentioned in the article. The majority of players do not play with profit margins in mind anyways.
Some of the things the author got right is the strict limits of event attendance which keeps “launch parties” concerts and presentations from achieving any kind of success. The way advertisers should think of Second Life should be in terms of a 3D website, mixing content between your regular site and your second life territory, like the way Showtime does their L Word site. Corporate interest in Second Life is similar to interest in the WWW back in the early 90’s long before the majority of the population even knew what the web was.
I appreciate articles like this for straightening out the overflowing hype, and putting things in perspective. The truth about Second Life is somewhere in the middle though. Second Life proves that a purely social 3D online “virtual worlds” can succeed with the general public, but the growth potential is still limited by today’s technology. The developers of Second Life made some mistakes early on that they are still paying for, especially now with the serious growing pains.
Shaun Rolph doesn’t have his facts strait. You only need “premium” access to own land, but even then there are ways around that. Everyone has full participation into the economy regardless of what type of user account you have; IF you have the money to do so. You can make money with out “premium” access, with monthly fees.
You can make good money from SL if you know what you’re doing. The problem is out of the 3 million accounts, only 5,000 probably know what they are doing. Everyone else are broke newbies looking for freebies and make friends.
But I do agree about how Linden Labs tends to exaggerate on their raw numbers on all their statistics they have. After all every business wants to spin their numbers to make it look good, when in practicality it’s meaningless and ignore the compromises.
Second Life won’t really be complete until the creation of Third Life, a virtual world inside Second Life. Since Second Life is too scary for me, I’d rather stay inside my SL virtual house, fire up my SL virtual computer and run Third Life on that.
(I wish I could cite the title of the relevant “Star Trek” episode, where a villain creates a holodeck inside the holodeck and fools the real Capt. Picard into giving up his password — the ultimate phishing scam.)
Of course, my First Life might suffer as a result, but I could always finish my dissertation on currency arbitrage between different levels of virtual reality and finally collect my PhD from the University of Phoenix (also now on Second Life).
SL is a grand example of an excellent PR push on something that’s the biggest nothing out there. Unlike others, I’ve actually tried to use SL on a number of occasions.
For one, the graphics are dated. We’re talking pre-Everquest (the first one) looking graphics that are just dead. Plus it looks like the developers were working on the game engine 8 years ago, then just stopped developing it because it always looks half finished.
Forget about smooth play too, you go to somewhere new and you wait and wait and wait for your connection (and I have a high speed connection here) to load everything in the area. THEN, you go looking for this great social interaction everyone in the PR firm clamors for and it’s like a ghost town. When you finally DO find someone, they’re either AFK sitting at one of these kiosks that earn them money the longer they sit there. Or they’re at the equivalent of prostitution and porn rental areas. All of course, costing money. Now, if you’re looking to rent some porn movie that shows in a virtual world displayed on a low-rez object…then it may be your lucky day.
Oh, also Kendall, that episode was “Ship in a Bottle” with Moriarty.
As a current IBM employee, I was confused by the article on our internal company home page explaining a new ‘virtual presence’ on the second life virtual community.
I’m frequently feeling behind the times, so I thought that I’d heard ‘second life’ before, but didn’t know why. I searched for ‘second life’ and was quickly brought up to speed.
I remember ‘colossal cave’ way back in the Unix days, but even with that in mind, this is lame.
Is IBM spending money on this because they supply the servers for this shite? Do they expect to make virtual money? As a stock holder does this benefit me at all?
If it’s just the extremes of the marketing department, that’s cool. If it’s a strategy, that’s not cool. WTF.
#9 – You don’t know what you’re talking about. The problem you’re experience is just bandwidth issues, and you’re probably using an underpowered OEM PC that uses on-board video.
Maybe he is.
But I’m not. And he’s right. Second Life’s graphics are horribly dated, and bandwidth is only half the story and you know that.
Second Life was never really ready for prime time. The Palace was more fun back in 1997.
Trust me, I’m not on a OEM machine with onboard graphics and it’s cool that you just assume that I am. I’m on 6 Mbit DSL and played on a custom built machine (64bit Athlon dual-core 4800+, 2gigs of RAM, Nvidia 7800GTX etc etc) on the PC side, and tried it also on a Mac Pro with 4 Gigs of RAM and is quad core and blah blah blah (look the specs up on Apple.com). So no, don’t think it’s a hardware issue or a bandwidth issue on this end. It’s a game engine issue.
And thanks for proving my point by saying they use the Havoc engine. The graphics are dated…clunky…ugly and with everything loaded to the client as you move into an area. You start off saying I don’t know what I’m talking about, then you go on to show the opposite.
LOL! Someone is actually willing to admit ‘attending’ the University of Phoenix.
Second Life? Been there, done that. A fully forgettable experience. The sooner this fad is over, the better.
What the graphics in Second Life remind of is the little virtual world that Apple tried to set up for Mac users back in the 1990s. Anyone else remember it?
I tried it. It sucked plain and simple. Nothing there. Slow. Boring. Etc.
#3 – That’s the best you can do, hack?
SL is a rip-off for the reasons JCD states: You’re injecting real money into a virtual economy, yet people are treating this as a real investment.
If I were to go invest in the US Dollar or the Euro (one being a better move than the other these days), I can make either move with the exepectiation that the nations behind each currency aren’t going to fold the next day… making it a logical investment. With SL, there is no garuntee the operation won’t close up shop one day… taking it’s players “investment” with it.
If anything, SL is the right thing to call this game: A Savings & Loan.
Two days ago, I have created an account on SL. Fist it looked to me as an visual chat, slow and boring. So I tried to search for other SL lands and run into IBM’s. The IBM has 10 lands. I started to be suspicios and looked for other companies. I have found: Sun, Mircosoft, Mercedes, Adidas, Reebok, etc.
The question is why do they spend money. Just for fun? Maybe, we will see in 3-5 years.
I tried Second Life recently out of curiosity. I’m not a gamer, and I certainly have a full life outside of the computer (father of two, employeed for over 20 years, etc.). Frankly, I was completely BLOWN AWAY. Analogs to Brave New World or the Enterprise holodeck come close to describing this “game.” Within the first few minutes I was talking with people from Brazill and Germany about the game, but about real world issues and interests, too. The ability to be anyone and do anything, however, is the real promise of this technology. People questioned the ability of eBay or Paypal to do anything for the average person when they were first introduced, too. Do they? Is that really why they’re there? I don’t go on eBay to look for an investment. I go there to clean out the attic or find a Christmas present for my kid. Making money is not the point for most of the people using eBay, and that’s not the point for most of the users on SL either. If you really want to make money on SL, then make a real world investment in Linden. That’s the easy way. As for making money in SL itself.. it can be done, and more possiblities will open up as the law changes. Perhaps on old adage applies here, however. You know, the one about not trying to make money from your hobby. It’s supposed to be fun, not work.