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Where is Second Life heading to ?

I have been investigating Second Life as another medium that can be used to interact with my customers or in any case with friends. It surely looks amazing when you begin and I must say that the whole idea is fascinating.

If any of you have not read Otherland: City of Golden Shadow I suggest that you have a go, you do not have to buy it, pop at any library and they should have it. I do not want to spoil the pleasure but I can safely say that this book (and the following) is about virtual reality and it presents a future that could be real quite soon.

Back to Second Life, let me describe why Second Life could become quite soon a huge scam.

What are the main differences with Real Life ?

It is important you understand the differences since many of the things in second life seek to present you with an experience that is similar to real life, and you end up missing the key points.

You do not need to eat

It is not the act of eating that is important, it is the fact that you do not need to "seek food" to live in Second Life. Even more important, you can live in Second Life for free, becoming a "member" of Second Life is free.

I think that this is something that changes deeply all the economics laws that we may assume true in Second Life. There is no need for a huge chunk of economy that is bound to our survival. You will not find in Second Life farmers, food processing, supermarkets and garbage disposal. This removes from Second Life lots of activities that could be performed to "earn money".

Creating a new copy of an artifact costs nothing

Yes, it is true that if I buy an artifact I generally cannot copy it. But if I am the producer it does not cost me anything to make another copy of something.

I did buy a chess table, but there where endless quantities of chess tables available ! all the cost is the cost of producing the first one (in terms of real life cost).

This is deeply unsettling of any economic model. Ask yourself what could be the selling cost of an item of which you have an endless supply, for free. Logically, the selling cost tends to zero as you keep selling them.

Or you can keep the cost fixed and keep earning money doing nothing !

Infact many content producers are aiming exactly at the above, but it does not work unless you artificially cap the number of producers !

Money appears from nowhere

Before any of you jumps on the chair, let me clarify. I mean Linden Dollars money. It is true that you pay real dollars to buy Linden dollars, but you have to ask yourself where the Linden Dollars come from ?

Linden do not have a classic economic system, they just "print" virtual dollars, as many as they want.

Why is Linden dollar valued at 247.5 Linden Dollars per US Dollar (at this moment) ?You can check the Second Life Exchange Market and have a look by yourself. The main question is how does the value of Linden Dollar is computed ? (It is especially intriguing since Linden can "create" as many linden as they wish)

Some of you will surely point out that this is like a country printing money, and in many ways it is, what I am arguing is that the "value" of "something" can be twisted by creating an artificial shortage or abundance of it.

Since Linden Dollars can be gotten anytime, banks in Second Life have no meaning and even if they had meaning one wonders what kind of "value" they would provide.

Transportation costs nothing

You may already have discovered that you can fly and tele transport anywhere in the virtual world, for free.

This is a huge difference with real world, if moving costs nothing and is immediate, why certain places cost more than others ?

If building another mall after I built the first one costs nothing why do places in a mall costs a lot ? (having to pay a real life dollar a week for a poster in a mall seems little, but you have to ask yourself what is the value you are getting from that poster.

What are the similarities with real life ?

There are many similarities, I am going to look at the most relevant, or at least what I find the most relevant.

Owning land costs money

Land costs money since the virtual land is mapped into a real computer that process its information, so, although virtual land is infinite, you need computers to map the virtual reality into something that you can use.

Therefore, you have to pay for land.

Summing all of the above

Here, given the few points above I try to draw conclusions

What kind of Job can you have at Second Life ?

The first one that comes to mind is receptionist, it comes from what I wanted to do and that is basically have a few display of what is my knowledge and let possible users interact with me. It is an experiment and as such there is nothing wrong if it does not work as expected.

I can say that the current cost of keeping a presence on Second Life is far greater that the usual Website or just a normal telephone. Not only you need to pay Second Life, you also have to create content that is different and more complex than a normal HTML page.

Of course I am not comparing extremely expensive web, I am talking of normal web, like the one I have, without too many frills and real down to earth, with content that I wish to share.

Maybe creating and Ecommerce on Second Life would be "easier" than doing it trough the web, but I doubt about it, as far as I can tell (I have been looking at Second Life for a short time) scripts are mainly for user interaction I wonder how you could build up the back end unless you Second Life Ecommerce is just a Jump into a Web.

The second work is entertaining people, although I wonder if this will be transformed into a dummy avatar run by some clever script. After all it is quite difficult to know if you are talking to a machine or a human (this of course for basic conversation) and if you get bored you could switch to another Avatar !

The oldest option is to "build" second Life manufacts. This is the most promising work when second life is young but as it grows old the quantity of manufacts around will slim the chance of new ones being developed. Remember that second life manufacts do not break and can be copied at zero cost.

How much should Virtual Land cost ?

Virtual Land is used to put your manufacts in it, as said before it maps into a physical computer. The real issue is what is the correct cost of Virtual Land ? From a pure economic point of view, it should be like this. The cost of a square Km of land depends on

You then add how much you wish to gain from that (let's say 30%) and you get the cost in real life to the end user of the land.

To put real numbers, we know that an Island of 65535sqm is a computer, how many 512sqm plots do you get ? It is about 127, if each plot pays 10US dollars year you have 1270Us dollars out of that machine each year.

To me it appears that the current Land Price is not calculated like this. Instead:

Let me give an example: It used to be that if you where a resident (meaning that you pay already Linden to be able to Play the game and Own some land) you could bid for the so called "First Land", they where 512sqm plots that where available to residents. The price of such lot was 512 Linden Dollars.

Not anymore: Land is sold in chunks of 65535sqm and auctioned, so, you find that the price is not 1L$ per sqm but it can easily go up to 13L$ per sqm. A ten times difference !

The real problem of this scheme is that it puts too much power into the hands of landlords creating vicious circle that is like this.

You can be Bullied even in Second Life

It happens in many ways

Big landlords bully you since they buy big chunks of Land at auctions and then resell small bits at steep markup.

You may be harassed or vandalized, see this Blog as an example

Second Life is doomed unless...

I firmly believe that any system that tries to scam the user is doomed and as far as I can see the price setting mechanism in Second Life is just a scam (since artificial shortage is created), I cannot find the correlation between real cost of infrastructure and prices paid by the users.

Land price should be fair for first time users

Linden should provide a small plot of land with the yearly subscription. It used to be called First Land and it has been scrapped ! Note that you pay Linden to have the plot with the money of the yearly subscription ! Users that already own land should be banned from this kind of land. It is also important that owners of this land are not bullied away by harrassment, having a few meters of "empty" space between small properties would be beneficial.

Landlords should be banned, land should be sold and bought from Linden. Note that I am just talking about land here, I am not talking about developed places ! If one wants an already built mansion, ok, that is another issue, but land should be out of the hands of landlords.

Second Life residents should pay for what they use in terms of system and this process should be transparent. At the moment I cannot see how real life costs (including the earnings) are mapped into the money that residents pay for the game. I am not advocating a free ride, I am asking for a fair ride. If I use more CPU/Disk I am willing to pay for it. I do not like to be ripped off ! What I am thinking is that the more objects/scripts a user owns the more he should pay, this is fair.


Second Life is a good game that has great possibilities if it is kept fair for all users. If this happens or not depends on both Linden wisdom and on the constructive criticism of all of us.

You can send a comment below (or you can contact me at Engidea,Ling in Second Life), I will then post them in this page.
If you want you can leave an address to be contacted.


Last Update 15/07/2007