Second Life Business Now Worth $1 Million

Unlike the unfortunate Mr. Wang, discussed this past weekend, the million dollars Anshe Chung has minted selling data in Second Life is unlikely to get her in trouble with the law. Terra Nova has an interview with the tag-teamed Avatar, discussing what being the first online world Millionaire means. There's also some fierce debate in the comments about whether it's an accurate count, and what this could mean for other online traders. You may recall Anshe from 'her' BusinessWeek article in May of this year. From the Terra Nova interview: "TN (RR): How long do you think the SL economy can sustain the level of growth that it has achieved thus far? Anshe: I believe the real growth of SL economy will be sustained for very long time. At least until one strong competitor arrives, which I think is not likely soon. However, the 'explosive growth' with 1.5 million accounts is a little bit of a misleading figure. Our own internal estimate of number of active paying users in SL agrees with Raph [Koster]'s estimate of about 100K. It seems the real growth of SL is about 100% every 6 months, which is still amazing. One must understand that people, once they are really immersed in Second Life and join those who are regular users, don't tend to get bored or to drop out, even not after years of use. This is fundamentally different from MMORPGs."

Regulate it.

[sethstorm]

To the chagrin of some, let's get to the point of taxing it. I'm sure there's a condition that would meet that person specifically that could be made generic enough to pass as well.

Taxes suck.

[MikeFM]

If anyone has a right to tax Second Life it's its creators. Nobody else has such a right. I don't see what the purpose would be other than to be annoying though. If they're smart they take the real money they collect and put it into a money fund or some similar safe place where it can collect interest for the company. As it is the number one thing that keeps me from developing more stuff in SL is that they charge a monthly fee which I am not going to pay. They're turning away exprienced programmers that wou

Re:

[kalirion]

If you're making real life money, you should be paying real life taxes. It's as simple as that.

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[QuantumG]

Shutins should get some form of tax reduction though, surely.

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[Mouse42]

I don't see what the issue is. It's an income. Should it not be covered under an income tax?

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[MikeFM]

You assume the government, or anybody, has the right to tax.

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[Peganthyrus]

They only charge a monthly fee if you want to own land. If you have friends who own land, they can let you hang out on it for free. You can build at your friends' place, or in a public sandbox.

Uploading textures/animations/sounds costs L$10 apiece. Free accounts no longer get a monthly stipend, so you'll have to pump money in now and then. A few bucks goes a long way: the current exchange rate is L$272 = US$1.

Of course, there are other reasons to stay off of SL.

Re:Regulate it.

[drinkypoo]

You get taxed when you get money out of second life. You have to report it as income same as any other income. You know, if I hand you $5 on the street, you're legally obligated to report that income, right?

Re:

[Mr. Capris]

You know, if I hand you $5 on the street, you're legally obligated to report that income, right?

Just like Richard Hatch was- you know, the (naked) guy from Survivor who won $1 million, only to not put it on his tax return?

Here's the Wikipedia article for those who forgot: Richard Hatch (directly pointed at relevant section) [wikipedia.org]

He's in jail now, and has another 3 years or so left. (I'm going to avoid the obvious gay + prison joke for an AC.)

Let's just hope Second Lifer's like Ms. Chung don't forget to put things like this on their tax return.

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[Snad]

If you hand me $5 on the street for no other reason than you feel like handing me that money then it is a gift and non-taxable (since it's well below the gift tax limits).

If you hand me $5 on the street in return for me shining your shoes, then it becomes taxable income in my hands.

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[sethstorm]

To the chagrin of some, let's get to the point of taxing it. I'm sure there's a condition that would meet that person specifically that could be made generic enough to pass as well.
Apparently some mods are on crack - one small fee seems to be the only real equivalent to a "tax", which can be absorbed easily by that New Yorker who turns it to an equivalent of a one person Housing Committee of a gated area. In other words, what is wrong with just returning a penalty back?

Yes, taxes might be known to be bad, b

LambdaMOO

[QuantumG]

Second Life, just like LambdaMOO, is all about netsex.

Re:

[notthepainter]

SL is not all about netsex. If you that that is all it is about you are missing out on a lot.

Yes, netsex is undeniably a large part of SL, but there is much, much, more out there.

Sadly it is difficult to find the other parts. I run a review site for SL so clearly I am biased, but I started the review site because when I started on SL netsex was all that I found and I knew that there must be more.

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[QuantumG]

Uhh, see, most people I know have played SL for a day or two, found it boring and quit. They then asked me why people continue to play it (like I'd know, I only played it for about a year) and so I tell them all the things they may have missed. Netsex is definitely one of the things people don't see in that first two days. Not that I'm saying that is why new players should play or anything, but it is definitely one of the many things that brings players back to it.

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[notthepainter]

It was what I found first. You click on "Search" then you click on "Popular Places" and there you have it. Two clicks and you are there.

SL's search function is pretty awful and I found it difficult to find good places to visit.

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[QuantumG]

Well there's that. I was more thinking about the covert, "meet a girl at a party" occurances.

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[ad0gg]

Uh... I installed second life a couple days. Open up the map to find people, the first place i go was so animal fetish "club". Everyones toon looked like an animal and the walls were filled with what looked like college mascot porn. Got the hell out of there, next place i found people was a strip a club which had dance prices posted on wall. I haven't figured out what there is to do in SL besides sex. Is there like games or something? Or is just pimp your toon?

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[QuantumG]

There is, but they're insanely lame games. Nothing like buying the best computer you can, stocking it out with ram and getting a fast internet connection so you can play games that are worse than board games. BTW, what you described is not what most people would call "netsex", but yes, that is what some people find entertaining.

Okay?

[Tadrith]

I feel like the only person in the world who has looked at Second Life and had absolutely zero interest in it.

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[donour]

Not quite. It was almost interesting until I found out it ran slow as hell on new macbook.

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[UbuntuDupe]

Speaking of interest, and speaking of SL businesses, I remember that back in '03, for the few months I was active, I started a bank. Just to get the word out, I provided for free the "service" of holding someone's money over the day during which you get your "allowance" so that they would appear poor and get more Linden Dollars from Linden. Does anyone know if they still have that welfare system?

Also, since at the time I was one of the few people who understood how to do tattoos (and with GIMP no less!),

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[CronoCloud]

Stipend is still around, but only for Premium accounts and Basic accounts started before the cut-off date in July. Also Premium accounts started recently get a lower stipend.

Re:Okay?

[brkello]

You would get that impression here, wouldn't you? I really don't understand the constant stream of second life stories that get put up here. Is Zonk getting paid to advertise for them? Is second life somehow involved in a plot to destroy the PS3 launch? There are games vastly more popular (let us use WoW as an example) that don't get nearly the press time (and they get more than enough coverage). Personally, I am sick of Second Life articles which are not news (or even note) worthy. I'd like to make a movement here on Slashdot that refuses to play Second Life until we stop seeing all the useless articles. Of course, none of us would play it anyways...but would just like to see a little sanity in the editing.

Re:Okay?

[Otter]

I really don't understand the constant stream of second life stories that get put up here...There are games vastly more popular (let us use WoW as an example) that don't get nearly the press time (and they get more than enough coverage)

I have zero interest in playing Second Life myself, but the explicit blurring of real-world and virtual economics is fascinating. It certainly strikes me as News For Nerds in a way that whiny demands for gold farming crackdowns are not.

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[dr_strang]

Don't worry. You're not. I had my go at that with MUDs in the 90's. No thanks, I'll take the real thing.

Re:Movies stranger than MUD's

[sethstorm]

Look here [imdb.com] and you'll find them.

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[Anonymous Coward]

I can see why someone blew a mod point on you for being "informative". Yes thank you, we were all VERY curious at to whether or not Tadrith had any interest in Second Life. Thanks for clearing that up for us! I will be sure to pass that informative tidbit on to all my friends.

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[unity100]

no. i even did not went past examining a few screenshots on the web.

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[antis0c]

Probably just means your First Life is just fine. ;)

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[Jesterboy]

First Life is okay, but there's too much grinding for my taste. I spend 40+ hours a week farming money to support my weekend raids of the movie theatre, mall, and beach. Don't get me started on my food / pots / repair costs for just farming! Plus, my '89 Nissan Sentra mount costs me money every week in the form of gas.

Although, I will admit, First Life's, uh, "software" and "wetware"...excellent.

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[dr.badass]

I feel like the only person in the world who has looked at Second Life and had absolutely zero interest in it.

For something you have zero interest in, it's kind of odd for you to take the time to post a comment on a story about it, don't you think?

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[Tadrith]

I wouldn't find it strange if someone who has no interest in cars said "Hey, nice car!". Nor would I find it particularly odd if someone who had no interest in playing, say, World of Warcraft, made a post about the game.

This is a forum for communication. I may not be interested in "playing" Second Life myself, but that does not necessarily mean I have no interest in why other people do. It's quite possible that somebody might reply to my stated lack of interest with a perspective that I didn't think of. It

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[mgblst]

He is right. The real people who aren't interested moved on from the story, and never clicked the link. Well, the real ones who aren't assholes, and feel the need to rell everybody that they aren't interested.

I have no intention of ever getting a second life account, but I am still interested, partly because work is a bit boring right now, partly because I am interested to see were things go. Someone making a million dollars from it is very interesting to me.

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[QuantumG]

So the fact that people are willing to pay money for things which have no real world value and only have in-game value because of artifical scarcity is of absolutely no interest to you? Second Life is a vision of the future. It's what the world will look like when 3d printers, nanotech, or a matter operating system are the norm. Assuming, of course, we don't grow out of our current obsession with scarcity.

Are you social?

[misleb]

Problem I have with SL and other "social" games is that I am just not a social person. The stereotype of the "geek" is that he (or she) woudl like to be social but is just too shy in person to pull it off.. therefore online games provide an outlet. But at least in my case, it isn't true. I am not shy. I just don't have much to say to people in real life and I don't have much to say to them online (Slashdot and other written forums excluded).

-matthew

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[notthepainter]

I am just not a social person... (Slashdot and other written forums excluded).

Why would you exclude /. and other forums?

You are social in your own way. There is nothing wrong with that. You can be social in your own way is Sl also. Yeah, there are an awful lot of "normal" people in Sl but trust me, your personal preference on how you express your socialability is nothing unusual.

That's the beauty of SL. If you can imagine it (and script it) it can exist.

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[misleb]

Why would you exclude /. and other forums?

Because it is a different format and I generally don't get to know specific people because there are so many of them. I am rarely responding to the same person twice. Rather than having personal conversations, I'm having a public discussion.

-matthew

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[notthepainter]

You know, you don't have to play it. Nobody is forcing you to.

For many it is an enjoyable way to spend some time.

I personally enjoy "sailboat racing" in Second Life. I used to race real boats, I don't have the opportunity anymore. This isn't as good as the real thing but I get some of the same competitive thrill out it as I did racing real boats.

If it doesn't work for you, that's fine.

I happen to enjoy it.

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[notthe9]

I feel like the only person in the world who has looked at Second Life and had absolutely zero interest in it.

If you had RTFA, you would have seen acknowledgement that it's not for many people, Anshe stating that 90% of people don't get it and drop out.

meh whatever

[PriceIke]

I don't see why this is a big deal. The fact that a person is making money providing a service using a MMORPG (or MMORLS if you prefer) is really no different from someone making money with any other kind of internet business. I don't see how this is much different from someone selling custom-made clothes for your Sims. Besides we already have in-game advertising [wikipedia.org], and the SL Reuters "branch office [reuters.com]" .. does it surprise anyone that somebody's found a viable business angle? And will it surprise anyone when the

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[dr.badass]

I don't see how this is much different from someone selling custom-made clothes for your Sims.

Nobody has become a millionaire selling custom-made clothes for your Sims.

Re:Pelosi, release the hounds!

[sethstorm]

And will it surprise anyone when the new Democratic Congress starts pushing legislation through to tax it?

Outside some small percentage of the population, is that really a problem? It sure brings out all the free-trade lobbyists, thinktanks and all the other demons to the table in their true form. Right now, they dont care much how they look in terms of PR- they're trying everything just to stuff in as many measures (APEC for more MFN's in Asia, Colombia MFN status) before they no longer have any meaningful

Edit needed.

[VoltageX]

This article or section reads like an advertisement.
Please discuss this issue on the talk page. Editing help is available.
Blatant advertising can be marked for speedy deletion with {{db-spam}}.

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[Zephida]

This story is the same story I read this morning in my "Free" morning Metro paper - a paper not known hard hitting news stories. My first thought when reading about this.. This whole article is surely a Linden Labs promotional advert?! Sadly, with all the easy copy for newspaper being written by the PR departments of large companies, very little actual journalism required. With the fast facts (1.6m downloads!!!!) lose figues (Millionare!!!), we should expect more from our media, and slashdot itself. And

A thing is worth what somebody will pay for it

[TempeTerra]

A thing is worth what somebody will pay for it, and some people are morons.

Strangely, that's a commentary on the valuation of Second Life businesses, and is also the business model of said businesses.