Golden Years

So, despite my scepticism, it turns out that it is possible to make a living by working in a virtual world.

The BBC report sums it up:

• Research by Manchester University shows that the practice, known as gold-farming, is growing rapidly … In many online games virtual cash remains rare and many people turn to suppliers such as gold farmers to get money to outfit avatars with better gear, weapons or a mount.

The full paper is available here.

The opportunity seems to be limited to MMORPG’s like World of Warcraft though – I can’t see how the model would translate to Second Life, since Linden dollars can be purchased directly, without the need to employ anyone to spend time “farming” them.

The returns are hardly stellar by western standards – £77 a month on average. Unsurprisingly, 80% of the trade is based in China, where that represents a decent income. Still, if things keep going the way they are, gold farming might start looking like an attractive prospect here too.

Banking crisis

Reuters have a dedicated Second Life news centre, which is a pretty good way of keeping up with how SL is impacting on the real world. The big story this week is Linden Labs’ ban on unlicensed banking, which came into effect yesterday.

I can’t understand how anyone failed to see the ban coming, especially after LLabs outlawed gambling, since the motivation was exactly the same – LLabs’ desire to avoid falling foul of US law by providing a platform for wire fraud.

I am also struggling to comprehend how anyone could have thought that depositing money in an SL bank was anything other than folly, since a glance at the SL economic statistics reveals that the economy is nowhere near developed enough to support the creation of institutions of finance capital, which means that any “bank” purporting to offer interest on capital was odds-on to be some sort of Ponzi scheme.

Property Speculation

Although I have in theory bought my little patch of heaven outright (for the princely sum of L$3725 or about US$16), what I have in fact purchased is an indefinite leasehold. The landholding system in Second Life is effectively feudal – possession of land is dependent on keeping up payment of tribute to the feudal superior, in my case Linden Labs themselves. It’s true that my monthly membership fee covers the first 512 square metres, but the costs escalate as the amount of land held grows – a 65,536 square meter estate incurs a monthly charge of US$195. I have no idea how close this is to the cost of the hardware and electricity that is required to host that amount of virtual real estate, but I suspect L-Labs are making a healthy profit.

Instead of buying land myself I could have rented a plot from one of the so-called “Land Barons”. This can be rather more expensive than dealing directly with L-Labs, but has one big advantage; regulation. L-Labs impose practically no restrictions on what can be done with land; my neighbours are free to build big ugly buildings right next to my property, or, even more annoyingly, start up a popular business that would suck up all the server resources for the sector. Big landlords can enforce planning regulations, so tenants can feel secure that they won’t wake up one morning to find their quiet beach house overshadowed by a six-storey strip club.

Renting out premium land does seem to be a reliable way of making money, reliable by Second Life standards at least. A big attraction is the fact that it’s not very capital-intensive – US$1675 will buy you a whole island – which makes it easier to get into than real-life property investment. However it also means that you would need to look after an area the size of Antarctica to make any worthwhile return in absolute terms. The associated administration would be a full-time job, and a dull one at that. Not quite the escape from the rat race that Second Life promises.

How to make money on Second Life

It doesn’t surprise me that someone has figured out that the best way to make money out of Second Life is to sell people a book that promises to reveal how to make money on Second Life.

To be fair to the author, Daniel Terdiman, he is upfront about the fact that not many people are getting rich on the grid, but I’m sure his book will sell to a lot of hopeful entrepreneurs. And there’s a chapter on how to profit from a Second Life blog …

The thousand natural shocks

Here’s a picture of me at the Three Lions Pub, a popular virtual hostelry.

Apart from getting a new shirt and trousers I haven’t customised my avatar at all, so my appearance is exactly the same as about a million other guys wandering around the grid. I look nothing like this in real life of course – what would be the point in recreating my current less than perfect physique when I can revert to the svelte frame I last enjoyed 20 years ago? The pose reminds me of those days too – when I was a student I rented a flat across the road from a pub with a beer garden, and spent many a happy summer afternoon passed out on the tables.

Three points to note:

1. The Three Lions seems to be one of the better-known destinations in Second Life. I’ve read about in in several online guides, and I vaguely remember seeing it mentioned in a newspaper article a few months ago too. Despite this it was pretty much deserted when I was there on Friday afternoon. Maybe all the regulars were out at a real bar.
2. That pint of lager on the table is for decoration only. As far as I could tell there was no way to buy alcohol at this establishment, which must be bad for business in a pub. Obviously virtual intoxication isn’t as appealing a concept as the real thing, but even so it must be possible to write a script that would produce some comedy “drunk” effects, like staggering around, increased aggression and other avatars looking strangely attractive. I’d buy that for a dollar.
3. I am wearing no shoes. In keeping with the whole “recreate my youth” theme I’ve been trying to find some footwear that resembles Converse All-Stars, thus far without success, so I’m going around barefoot. This has no adverse effect on my feet at all, whatever type of terrain I traverse.

The last point is the most important, since it illustrates what I think is the fatal flaw in the Second Life economic system: the cost of living is essentially zero. Residents can exist indefinitely without eating, drinking, buying new clothes or paying for somewhere to sleep. All spending is discretionary. The whole layer of productive economic activity supplying the staples of life just doesn’t exist, and without it there is nothing to support the flimsy service economy that passes for commerce on the grid.

What is needed is some sort of tamagotchi-style feeding and nurturing system, where neglecting your avatar has negative consequences. Failing to spend enough money on food would lead to emaciation and eventual death, clothes would wear out and fall apart, and not buying or renting a place to live would get you busted for vagrancy. Avatars would get old and sick, and ultimately die.

Recreating real life to this extent might seem to undermine the whole point of Second Life, which is to get away from the frustrations of this mortal coil. I can’t help thinking though that a life without pain and misery wouldn’t be very interesting at all. Maybe that’s why I’m such a fun guy to be around.