January 23, 2009 3 Comments
Regular readers of SLS will know that we have long been sceptical of the idea that it is possible to make serious money through in-world commerce, but the existence of services like XStreet and OnRez presents a challenge to our doubts, since they provide a route by which cash can be extracted from the grid without showing up on the official Linden Lab statistics. Perhaps sellers in these marketplaces are turning over significant sums, enough to make a living comparable to having a real-life job. Even if this isn’t true, the markets themselves may be handling enough transactions that a commission of even a couple of L$ a time would be enough to make running them a lucrative business.
Does the fact that the Lindens have bought into the action provide any support for the theory that the web-based marketplaces were making money? One might speculate that L-Labs is worried about a fall-off in the subscriber base due to the recession, and is looking to secure other revenue streams. On the other hand, if XStreet and OnRez were profitable it seems strange that their developers would have sold out, unless the offer was irresistible. Throw in the fact that OnRez was owned by virtual world cheerleaders-turned-jeremiahs The Electric Sheep Company, and it begins to look like the picture wasn’t so rosy after all.
Linden Labs may well have taken advantage of the economic crisis to increase their stranglehold over Second Life commerce by snapping up two companies that, had they had time to develop further, may have grown to challenge L-Labs’ dominant position as the people who actually make money from the grid.