Comments on: A Hard Rain’s a-Gonna Fall

By: secondlifeshrink

secondlifeshrink — Wed, 31 Dec 2008 13:16:16 +0000

In response to Sigmund’s points: the article he links to is about the failure rate of RL businesses – run by business people rather than amateurs – when they try to expand into SL, and, as he says, it’s about 90%. Furthermore the 10% who “succeed” do so in terms of achieving marketing or recruitment goals for their offline activities, rather than building an actual profitable business in SL itself.

I’m still not convinced that it is possible for any more than a tiny number of people to make serious money purely from in-world commerce.

By: secondlifeshrink

secondlifeshrink — Mon, 29 Dec 2008 00:19:27 +0000

I guess that I'm coming at this from a psychological viewpoint rather than a strictly economic one. There is a recession, people are worried about losing their jobs, houses and healthcare, and they are cutting back on their discretionary spending. Spending doesn't get much more discretionary than buying virtual products from virtual shops in Second Life, especially when you consider than a resident can get a perfectly adequate SL experience without spending any L$ at all. All the signs are telling me that the SL economy is going to contract rather than expand. It was never that big to start with anyway. The SL economic statistics do show a lot of transactions going on , but the vast majority of them are US$2 or less in value - in November only 304 sales topped US$2000. The quarterly figure of US$100 million in transactions sounds impressive, but Wal-Mart manages that in only 3 hours, and turnover is not the same as profit - just ask the management at Woolworths. Only 181 residents took home more than $5000 last month, out of an active population of close on a million, and out of that five grand they had to pay their Linden Lab charges, so the number of residents actually earning anything close to a comfortable living from Second Life commerce can't be more than a handful. I think that there is a space for Second Life, but as an entertainment service rather than as a place where money can be made.

By: Sigmund Leominster

Sigmund Leominster — Sat, 27 Dec 2008 16:25:40 +0000

In the virtual world, about 90% of businesses fail as a matter of course. Remember, many of the people who join Second Life (or other virtual worlds) are not business people but want to "give it a try" and starting one in SL is pretty low cost. So it is unsurprising that you hear about "businesses closing in droves" because that's to be expected! There will be some effect on the SL economy as a result of Real Life recession, but there will also be opportunities for folks with spare cash (and balls) to take a few risks and snag up bargains, such as virtual land.

By: dshiao

dshiao — Sat, 27 Dec 2008 04:14:49 +0000

I’m closer to virtual tradeshows than Second Life. Hopefully, my rosy forecast re: SL come true. On the virtual tradeshow front, I’m very confident with regard to growth and upside – you can take that to the “bank”